Meridian Resources Updates Operational Activity
Meridian Resources has placed its Biloxi Marshlands 6-1 well on production in mid-March and is currently producing at a gross rate of approximately 10,000 Mcf per day, which singularly represents an increase of 10% of current daily production. This well, located in the St. Bernard Parish area of Louisiana was drilled during the fourth quarter of 2002. The well reached a total depth of 10,800' measured depth (9,000' TVD) and encountered over 180' of net pay in the targeted Cris "I" sand.
Also during March 2003, the Company participated in the State of Louisiana oil and gas lease sale, and successfully bid on five additional tracts in the area covering approximately 740 acres. The Company's working interest in the Biloxi Marshlands No. 6-1 well is 93%.
Several additional development and exploratory wells are planned in the area during 2003. Following the drilling of the Biloxi Marshlands 6-1 well, the Company constructed a barge based production facility and installed approximately five miles of 8" pipeline capable of processing and transporting the production from the current well and future wells on the Biloxi Marshland acreage.
Meridian expects to begin the second phase of its 3-D seismic program on the Biloxi Marshlands acreage during April 2003. The survey will encompass at least 105 square miles and is expected to be complete during the third quarter of 2003.
The Hughes No. 2 well in Jefferson Davis Parish, Louisiana has been drilled to a total depth of 17,850' measured depth and a completion in the Bol Mex 5 sand series is currently underway. The well is a replacement for the Hughes No. 1 that experienced cementing problems during the completion phase and was subsequently abandoned. During February 2003, the Company completed the construction of production facilities for the Hughes No.2 and is currently conducting final completion operations on the well. Meridian is the operator of the well and owns an approximate 94% working interest and a 70% net revenue interest in the well.
Also in Jefferson Davis Parish, Louisiana, in the Company's Thornwell field, Meridian participated in the drilling of the Blank Living Trust well, which encountered 20' of pay at a depth of 11,960'. The well was placed on production flowing at a rate of 9,000 Mcf of gas per day and 183 barrels of oil per day during the fourth quarter of 2002. The Company owns an approximate 26% working interest and a 17% net revenue interest in the well.
Recompletion operations are underway on the Thibodaux No. 1 well in the Company's Ramos Field. Once recompleted to the Operc 3 interval, the Company expects the well to produce at rates of 10,000 Mcfe per day or more. Meridian is operator of the Ramos Field and owns a 65% working interest and a 44% net revenue interest in the well. In the Lakeside Field located in Cameron Parish, Louisiana, Meridian completed its Lacassane No. 1 well in the Alliance sand at a depth of approximately 10,750'. The well initially tested at rates of 1,425 Mcfe of gas per day from the lower part of the sand and additional perforations are now being added to include the upper member of the sand. The Company owns a 73% working interest in the well.
The capital expenditure budget for 2003 is currently forecast between $35 million and $40 million for seismic and drilling activity, primarily focused in the Biloxi Marshlands project area. The first development well is the Biloxi Marshlands 6-2 well, which is scheduled for April 2003. Other operations will include a 12,500' well in Ship Shoal Block 320, and certain other shallow, lower risk opportunities including additional wells in the Biloxi Marshlands project area. As previously announced, the Company has changed its exploration focus to concentrate on multiple shallower, low risk projects with broad exploitation/development potential interspersed with one or more of the Company's traditional higher risk, but much higher potential, projects.
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