ST 41 Cap Rock Exploratory Well to Drill Deeper with 5 Discovery
Sands Encountered to Date
Successful Test in Deeper Pay Section in the 100% EPL Owned ST 46
CORRECTION...by Energy Partners, Ltd.
NEW ORLEANS--(BUSINESS WIRE)--August 01, 2007
In the third paragraph, fourth sentence of the release dated July
31, 2007 the reference to the ST 46 field's first producing well
should read "the ST 46 #4 (A-2)" (instead of "the ST41 #4 (A-2)").
The corrected release reads:
EPL PROVIDES AN UPDATE ON DRILLING OPERATIONS
ST 41 CAP ROCK EXPLORATORY WELL TO DRILL DEEPER WITH 5 DISCOVERY
SANDS ENCOUNTERED TO DATE
SUCCESSFUL TEST IN DEEPER PAY SECTION IN THE 100% EPL OWNED ST 46
Energy Partners, Ltd. (NYSE: EPL)("EPL" or the "Company") today
provided an update on exploratory activity, including results on a
number of decisioned exploratory wells, the progress of exploratory
wells currently drilling including the South Timbalier ("ST") 41 #B-3
Cap Rock well, and the successful testing of a deeper pay sand at ST
The Company currently has an exploratory well, the #B-3 Cap Rock
prospect, underway on the Shelf in the ST 41 field. This moderate
risk, high potential well has reached 16,374 feet and has encountered
the upper-portion of the intended objectives, discovering 70 feet of
high quality oil and natural gas pay in five sands. The well is
currently being sidetracked to take points updip to the sands
discovered for optimal reserve recovery. Encouraged by the well
results to date, sidetrack plans include taking the well deeper to
test additional prospective sands below the lowest pay sand
encountered to date. EPL is the operator with a 60% working interest,
and W&T Offshore Inc (NYSE:WTI) holds the remaining 40% working
The Company also announced it has successfully production tested
the first of four deeper pay sands encountered earlier this year in
the ST 46 #3 (A-1) well. Based on this preliminary test information,
the Company is evaluating an additional well to test even deeper
objective sands below the productive sands encountered in this well.
The #3 (A-1) well is currently flowing to sales at a gross rate of
approximately 7 million cubic feet per day (Mmcf/d) with 120 barrels
of associated liquids. As previously announced, the Company initiated
production in the ST 46 field area mid-May, and has ramped up the
gross initial rate of the field's first producing well, the ST 46 #4
(A-2), from 25 Mmcf/d with associated liquids to approximately 37
Mmcf/d and 530 barrels of associated liquids. Total combined gross
production coming from this 100% EPL interest area is approximately 44
Mmcf/d and 650 barrels of associated liquids.
Richard A. Bachmann, EPL's Chairman and Chief Executive Officer,
said, "Today's announcements regarding our ST 41 and 46 fields further
validate our excitement over this area where our employees have done a
great job of continuing to unlock its potential. We plan to optimize
the discoveries made to date and further evaluate other 100% EPL owned
acreage in the area."
The Company announced a second gas discovery at Eugene Island
("EI") 312. This moderate risk, moderate potential #D-2 well was
drilled to a total depth of 8,380 feet and encountered a total of 50
feet of high quality natural gas pay in a single sand interval. This
is the second discovery in this block, with the first discovery, the
EI 312 #D-1 well, made late last year. A third exploratory well, the
moderate risk, moderate potential EI 311 #D-3 well, is currently
drilling. First production in this exploratory area was established
with the EI 312 #D-1 well late last week, and the EI 312 #D-2 well is
expected on line in the third quarter of this year. Hunt Petroleum is
the operator with a 60% working interest, and EPL holds the remaining
40% working interest.
The Company further announced today that the moderate risk, high
potential onshore south Louisiana well, Longhorn, located in
Terrebonne Parish, reached its intended depth of 19,000 feet and was a
dry hole in the objective section. While this well encountered
substantial sand accumulation throughout the objective section, the
sands were water bearing and the Company elected not to participate in
the proposed completion of sands uphole from the objective section.
The Company has also decisioned two additional moderate risk, moderate
potential wells on the Shelf, one located in ST 26, called the Chimney
Rock prospect, and one located in West Cameron 312. Both of these 100%
EPL interest wells reached their intended objectives, and were dry
holes. The Company will recognize total dry hole expense of $29
million in the second quarter of 2007 in connection with these three
wells. As a result of this higher than anticipated dry hole expense,
the Company has increased its exploration expense guidance, which
includes dry hole costs as well as other charges, for the second
quarter from $15 to $25 million to $37 to $40 million.
The Company is currently drilling four exploratory wells,
including the high potential ST 41 #B-3 Cap Rock well, and three
moderate potential wells, the EI 312 #D-3, the South Marsh Island 247
#1, and an onshore South Louisiana well called Tiger Bait in
Terrebonne Parish. The Company plans to spud an additional four wells
before year-end, including two moderate risk, high potential wells on
the Shelf at EI 21 and ST 214, and one high risk, high potential
onshore South Louisiana well called La Posada in Vermilion Parish.
Founded in 1998, EPL is an independent oil and natural gas
exploration and production company based in New Orleans, Louisiana.
The Company's operations are focused along the U. S. Gulf Coast, both
onshore in south Louisiana and offshore in the Gulf of Mexico.
This press release may contain forward-looking information and
statements regarding EPL. Any statements included in this press
release that address activities, events or developments that EPL
expects, believes or anticipates will or may occur in the future are
forward-looking statements. These include statements regarding:
-- reserve and production estimates;
-- oil and natural gas prices;
-- the impact of derivative positions;
-- production expense estimates;
-- cash flow estimates;
-- future financial performance;
-- planned capital expenditures; and
-- other matters that are discussed in EPL's filings with the
Securities and Exchange Commission.
These statements are based on current expectations and projections
about future events and involve known and unknown risks,
uncertainties, and other factors that may cause actual results and
performance to be materially different from any future results or
performance expressed or implied by these forward-looking statements.
Please refer to EPL's filings with the SEC, including Form 10-K for
the year ended December 31, 2006 and Form 10-Q for the quarter ended
March 31, 2007, for a discussion of these risks.
Additional Information and Where to Find It. Security holders may
obtain information regarding the Company from EPL's website at
www.eplweb.com, from the Securities and Exchange Commission's website
at www.sec.gov, or by directing a request to: Energy Partners, Ltd.
201 St. Charles Avenue, Suite 3400, New Orleans, Louisiana 70170,
Attn: Secretary, (504) 569-1875.
Energy Partners, Ltd.
T.J. Thom, 504-799-4830
Al Petrie, 504-799-1953
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