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El Paso Corporation Reports $1.57 per Mcfe Domestic Reserve Replacement Costs before Price-Related Revisions; Proved Reserves Increase to 2.75 Tcfe El Paso Corporation reported in January that its domestic reserve replacement costs, before reserve revisions due to price, improved to $1.57 per Mcfe. In addition, its proved natural gas and oil reserves at December 31, 2009 totaled 2.75 Tcfe, including 201 Bcfe related to its 48.8 percent interest in Four Star.
“El Paso’s improved reserve replacement metrics and growth in proved reserves reflect the repositioning of our portfolio, and the increased capital efficiency of our drilling programs,” said Doug Foshee, chairman, president and chief executive officer of El Paso Corporation. “I want to congratulate our E&P team. We are now seeing the fruits of a multi-year continuous improvement effort.”
Below is a reconciliation of proved reserves from December 31, 2008 to December 31, 2009.
Proved Reserves (Bcfe)* ---------------------------------- Proved Reserves at Dec. 31, 2008: 2,547 Production: (279) Sales of Reserves in Place: (59) Extensions and Discoveries: 573 Purchases of Reserves in Place: 63 Revisions Due to Price: (93) Revisions Other than Price: (2) Proved Reserves at Dec. 31, 2009: 2,750
* Year end reserve estimates are based on first day 12-month average prices of $3.87 per MMBtu of natural gas (Henry Hub) and $61.18 per barrel of oil (WTI) and include El Paso's interest in Four Star.
Approximately 31 percent of the December 31, 2009 proved reserves are proved undeveloped, and 84 percent are natural gas. While the SEC’s rules for booking proved reserves changed for 2009, the impact to El Paso was minimal, beyond the change to a new standard using 12-month average pricing.
El Paso E&P’s 2009 capital expenditures were approximately $1.1 billion, which includes approximately $92 million for the acquisition of producing properties completed in late December and approximately $240 million for international expenditures.
2009 Production Update ---------------------------------- El Paso also reported that its 2009 production, including its proportional interest in Four Star, averaged 763 MMcfe/D, which is at the high end of its previous guidance of 745-765 MMcfe/D. The company’s year-end exit rate was approximately 750 MMcfe/D, driven primarily by strong production growth in the Haynesville Shale program, which had a year-end exit rate of approximately 150 MMcfe/D, gross and 110 MMcfe/D, net. |
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