Bill Barrett Cites 30% Increase in Proved Reserves
Bill Barrett Corporation reported certain unaudited operating results for year-end 2007 and certain operating and financial guidance for 2008.
Chairman and Chief Executive Officer, Fred Barrett, commented: "Our successful 2007 development and exploration activities generated year-end estimated proved reserves of 558 billion cubic feet equivalent (Bcfe), which were up 30% from year-end 2006 and up 44% as adjusted for 2007 property sales. The reserve increase was achieved with total estimated capital expenditures of $438 million, or $1.88 per Mcfe added. 2007 production of 61.2 Bcfe was up 17% from 2006, despite shut-in production during the third and fourth quarters of 2007 totaling approximately 3 Bcfe due to lower than acceptable pricing and infrastructure constraints. Over the past three years we have delivered compound average reserve growth of 24% and production growth of 25%, demonstrating both our ability to execute and our commitment to growth.
"For 2008, our board has approved a capital budget that ranges between $550 million and $600 million. Expenditures will focus on our three primary development projects in the Uinta, Piceance and Powder River Basins. As a result, we expect to deliver approximately 20% production growth in 2008. Our production guidance of 70 to 77 Bcfe is based solely on our development programs. Beyond our development activities, we are excited to move forward with additional drilling based on the positive 2007 preliminary results at the Yellow Jacket and Blacktail Ridge prospects, as well as continued drilling assessment in Circus. We also look forward to drilling several new prospects during 2008 in the Paradox, Uinta, Wind River and Big Horn Basins. We are very pleased with our 2007 achievements, and we anticipate continued success with our 2008 programs."
Year-end estimated proved reserves of 558 Bcfe were 97% natural gas and 3% oil. Further, proved reserves were 59% developed and 41% undeveloped. The present value of proved reserves was estimated at $1.2 billion, before the effect of income taxes, based on the December 31, 2007 natural gas price of $6.04 per MMBtu (Colorado Interstate Gas, or CIG, price), WTI oil price of $92.50 per barrel and a 10% per annum discount rate.
In addition to proved reserves, the Company estimates it has probable and possible resources of 1.4 Tcfe (see Disclosure Statements section below) for total proved, probable and possible resources of approximately 2.0 Tcfe.
Estimated production for 2007 was 61.2 Bcfe and included 94% natural gas and 6% oil. Total production included 1.2 Bcfe from the Williston Basin and other properties sold during 2007. Fourth quarter 2007 production was a Company record at 17.2 Bcfe, up 21% from 14.2 Bcfe in the fourth quarter 2006 and up 17% sequentially.
2008 Capital expenditures are expected to be allocated approximately 80% for development, 10% for delineation and 10% for exploration and other and include drilling up to 500 wells. The Company is currently focusing on three core areas that provide significant lower risk, higher return development opportunities, four key exploration projects that are entering the delineation phase and several high potential exploration projects.
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