Ocean Energy Sets 2003 Capital Budget
Ocean Energy Inc. reports that its board of directors has approved a capital investment program of approximately $1 billion for the year 2003. The figure represents an estimated 30 percent increase over 2002 spending and will be funded from discretionary cash flow based on anticipated commodity prices and forecasted production growth. The amount is subject to change if market conditions shift or new opportunities are identified.
"A significant portion of our capital program is dedicated to development of our exploration successes in West Africa and the deepwater Gulf of Mexico," said James T. Hackett, Ocean Energy chairman, president and chief executive officer. "However, we continue to balance the demand for capital from our exploration and development programs with the need to retain a strong balance sheet."
On a geographic basis, about half of the projected 2003 capital spending budget will be directed toward Gulf of Mexico activities, with 75 percent of that amount focused on deepwater activities. Approximately 30 to 40 percent will be targeted to international assets with the remainder funding domestic onshore exploration and exploitation.
Gulf of Mexico
In the Gulf of Mexico, Ocean plans to spend between $500 and $550 million. In addition to ongoing activities on the shelf, the majority of these funds will be used to develop recent deepwater discoveries and grow the company's reserve base through additional deepwater exploration. Some $275 million will fund development drilling, completions and construction activities at Red Hawk, Magnolia and Zia deepwater discoveries and further development activities in the Nansen and Boomvang deepwater fields. The 2003 exploratory program will be highlighted by the anticipated drilling of at least six deepwater prospects, three of which will be Ocean-operated. These include Yorktown in Mississippi Canyon Block 841, Shiner in Garden Banks Block 656, and Tuscany in Desoto Canyon Block 179.
Ocean has allocated between $300 and $400 million to international operations with nearly half of that amount committed to activities in Equatorial Guinea, including a planned full-year, three-rig drilling and completion program on Block B in preparation for the start of production in fourth quarter 2003 from the Serpentina FPSO. In Angola, the company plans to drill the first exploratory well on the Ocean-operated Block 10 while two exploratory wells are budgeted on Block 24. Offshore Egypt, the company will install a new platform and drill a development well on its East Zeit concession in the Gulf of Suez.
Ocean plans to spend approximately $100 to $150 million on its domestic onshore properties. In the Rockies, the company has scheduled the drilling of 100 development wells in its Bear Paw field in north central Montana. The remaining onshore budget will focus on activities to develop gas production in the Anadarko, East Texas, South Texas and Permian Basin regions.