Stone Energy Corporation Secures Deep Water Drilling Rig and Provides
LAFAYETTE, La., April 8, 2013
LAFAYETTE, La., April 8, 2013 /PRNewswire/ -- Stone Energy Corporation (NYSE:
SGY) announced today that it has contracted an ENSCO 8500 series dynamically
positioned deep water drilling rig for Stone's Cardona oil development program
at Mississippi Canyon 29. Drilling on the first Cardona well is expected to
commence during the second half of 2013 followed by the drilling of the
Cardona South well. Stone plans to tie back both wells to the 100% owned
Pompano platform with production projected for late 2014. Stone holds a 65%
working interest in the Cardona wells and will be the operator.
Chairman, President and CEO David Welch stated, "The signing of the Ensco
contract allows us to move forward to more fully develop the reserves around
the Pompano platform. These Stone-operated deep water wells allow us to be in
control of the planning and timing of the Cardona project. After years of
preparation, we look forward to progressing our deep water development and
Separately, the ENSCO 81 jack-up rig is expected to begin drilling on a three
to four well conventional shelf/deep gas drilling program in May 2013. Stone
expects to drill the Hammerlock oil prospect located on South Timbalier 100,
followed by the Taildancer oil prospect located on Ship Shoal 113. The
remaining one or two wells will follow Taildancer. Also in May 2103, the
Parker 50B inland barge rig is expected to spud an infield oil well prospect
in the Stone-operated Clovelly field. Stone holds a 94% working interest in
Hammerlock and a 100% working interest in Taildancer and Clovelly.
At the La Cantera liquids-rich deep gas field, the third well was successfully
drilled to 18,000 ft and is currently in completion operations with first
production expected in June 2013. Combined with the first two wells, gross
production from this field is projected at over 100 MMcfe per day (over 25
MMcfe per day net) when the third well commences production. Stone holds a
34.6% non-operated working interest in the field.
Drilling operations at the deep water Malachite prospect located on
Mississippi Canyon 258 are complete. The well has been logged and marginal
hydrocarbons were found in several sands. The partners have decided not to
proceed with the project and the well is currently being plugged and
abandoned. Stone holds a 40% non-operated working interest in the prospect and
the net well cost is estimated at approximately $22 million.
In Appalachia, production has been impacted by three third party pipeline
failures since late December 2012 and an unscheduled gas processing plant
outage. During the first quarter of 2013, net volumes were impacted by
approximately 20 MMcfe per day. The most recent pipeline failure occurred in
late March 2013 on a 24-inch Williams pipeline in Marshall County West
Virginia and continues to curtail production in the Mary field. The two
previous pipeline interruptions on the Williams 12-inch line have been
repaired. Stone is currently producing approximately 45 MMcfe per day (net)
from Appalachia. Stone estimates approximately 20 MMcfe per day (net) will
remain curtailed until the 24-inch line is repaired. Stone is scheduled to
bring 10 new wells on production in its unaffected Heather field (50% working
interest) by late April 2013, which Stone projects will increase net daily
production by approximately 15 MMcfe per day. Stone continues to execute its
operational plans of drilling and completing 26 to 30 horizontal wells in
Appalachia in 2013.
Despite the curtailments in Appalachia, production guidance for the first
quarter of 2013 remains within the 38-40 thousand barrels of oil equivalent
(MBoe) per day (230-240 MMcfe per day) guidance range. Because a majority of
the curtailment was natural gas, Stone expects liquids to represent
approximately 50% of overall volumes in the first quarter of 2013.
Forward Looking Statement
Certain statements in this press release are forward-looking and are based
upon Stone's current belief as to the outcome and timing of future events.
All statements, other than statements of historical facts, that address
activities that Stone plans, expects, believes, projects, estimates or
anticipates will, should or may occur in the future, including future
production of oil and gas, future capital expenditures and drilling of wells
and future financial or operating results are forward-looking statements.
Important factors that could cause actual results to differ materially from
those in the forward-looking statements herein include the timing and extent
of changes in commodity prices for oil and gas, operating risks, liquidity
risks, political and regulatory developments and legislation, including
developments and legislation relating to our operations in the Gulf of Mexico
and Appalachia, and other risk factors and known trends and uncertainties as
described in Stone's Annual Report on Form 10-K and Quarterly Reports on Form
10-Q as filed with the SEC. Should one or more of these risks or uncertainties
occur, or should underlying assumptions prove incorrect, Stone's actual
results and plans could differ materially from those expressed in the
Estimates for Stone's future production volumes are based on assumptions of
capital expenditure levels and the assumption that market demand and prices
for oil and gas will continue at levels that allow for economic production of
these products. The production, transportation and marketing of oil and gas
are subject to disruption due to transportation and processing availability,
mechanical failure, human error, hurricanes and numerous other factors.
Stone's estimates are based on certain other assumptions, such as well
performance, which may vary significantly from those assumed. Delays
experienced in well permitting could affect the timing of drilling and
production. Therefore, we can give no assurance that our future production
volumes will be as estimated.
Stone Energy is an independent oil and natural gas exploration and production
company headquartered in Lafayette, Louisiana with additional offices in New
Orleans, Houston and Morgantown, West Virginia. Our business strategy is to
leverage cash flow generated from existing assets to maintain relatively
stable GOM shelf oil production, profitably grow gas reserves and production
in price-advantaged basins such as Appalachia and the Gulf Coast Basin, and
profitably grow oil reserves and production in material impact areas such as
the deep water GOM and onshore oil. For additional information, contact
Kenneth H. Beer, Chief Financial Officer, at 337-521-2210 phone, 337-521-2072
fax or via e-mail at CFO@StoneEnergy.com.
SOURCE Stone Energy Corporation
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