LAFAYETTE, La., Jan. 31 /PRNewswire-FirstCall/ -- PetroQuest Energy,
Inc. (NYSE: PQ - News) announced today that the Company is updating
its fourth quarter production guidance to approximately 69.3 Mmcfe
per day from its previously issued guidance of 69-73 Mmcfe per
day.
The Company ended 2006 with 135 Bcfe of proved oil and gas reserves,
a new Company record. Approximately 88% of the proved reserves
were natural gas, and approximately 52% were located in long-lived
basins.
Based primarily on the Company's anticipated record 2006 production
rate, PetroQuest expects to post Company-record revenues, cash
flows and net income for 2006. A news release announcing complete
fourth quarter and year-end results and a conference call with
investors and analysts is scheduled for February 14, 2007.
Reserves
The following sets forth an analysis of the Company's estimated quantities
of net proved oil and gas reserves (oil converted to MMcfe at the rate of six
MMcf per MBbl):
Natural Gas
Oil and NGL
(MBbls) (MMcfe) (MMcfe)
Estimated Net Proved reserves as of
December 31, 2005 3,642 109,117 130,969
Revisions of previous estimates 81 700 1,186
Extensions, discoveries and other
additions 590 35,933 39,473
Sale of reserves (887) (6,068) (11,390)
Production (695) (21,527) (25,697)
Estimated Net Proved reserves as of
December 31, 2006 2,731 118,155 134,541
At December 31, 2006, the Company's independent petroleum engineers
estimated the net present value, excluding income taxes ("PV-10"),
of these reserves was $384 million, using prices ($5.28 per Mcfe
and $59.85 per barrel) in effect as of year-end 2006 and discounted
10%. This amount includes a reduction for estimated plugging and
abandonment costs that is also reflected as a liability on PetroQuest's
balance sheet at December 31, 2006, in accordance with Statement
of Financial Accounting Standards No. 143.
Operations Update
Drilling activity during the fourth quarter of 2006 included 10
successful horizontal coalbed methane wells in the Arkoma Basin,
2 successful Woodford Shale wells in the Arkoma Basin and 5 successful
wells in East Texas. The Company's Grey Plantation prospect was
determined to be not commercially productive.
A total of 12 successful wells were drilled in the Arkoma Basin
during the fourth quarter of 2006 resulting in a 92% success rate.
Drilling continues in the Arkoma Basin with one rig drilling three
consecutive wells testing deep horizons, including the Woodford
Shale. One of the three wells was a vertical well testing both
the Caney and Woodford Shales, and two are horizontal wells in
the Woodford Shale. The vertical well has been completed and had
an initial production rate of approximately 300 Mcfe per day in
November. The first horizontal well has been successfully fractured
in seven stages and has tested at an initial rate of approximately
3.5 MMcfe per day. The well is still cleaning up and currently
has recovered approximately 25% of its fracture load water. Current
plans are to run production tubing in the well in approximately
one week, and an updated production rate will be forthcoming. The
Company is currently working on production facilities and pipelines
for this well. The second horizontal well is currently in the completion
phase and will be fractured in approximately four weeks.
PetroQuest participated in the drilling and completion of 5 wells
in the East Texas Basin during the fourth quarter of 2006. The
Company drilled its first well at its Jones prospect during the
fourth quarter and is currently in the testing phase. Additionally,
the Company's Palmer prospect is currently being connected to pipelines
and should begin producing during the second quarter.
In the Gulf Coast Basin, the Company's Pelican Point #2 prospect
is currently drilling and should reach total depth in approximately
six weeks. The Company has a 25% working interest in the well.
The Company's Grayhawk prospect in the Gulf of Mexico is expected
to begin producing today and stabilize at gross rate of approximately
25 MMcfe per day. The Company has an approximate 18% net revenue
interest ("NRI") in this well.
The Company's Poppy Hills prospect in the Gulf of Mexico is expected
to begin producing during the second quarter at a gross rate of
15 MMcfe per day. The Company has an approximate 18% NRI in this
well.
Production Guidance
The Company is projecting its 2007 net production to average approximately
79-85 MMcfe per day. Additionally, the Company is projecting its
first quarter 2007 net production to average approximately 79-84
MMcfe per day.
Capital Expenditures Guidance
The Company's drilling capital budget for 2007 is approximately
$160 to $175 million depending on commodity prices, drilling success
and related completion and facility costs.
Hedging Update
The Company initiated a commodity hedging transaction in the form
of a costless collar during January 2007. The following sets forth
the transaction details:
Instrument
Production Period Type Daily Volumes Price
Natural Gas:
February - December 2007 Costless Collar 5,000 Mmbtu $6.50 - 8.65
After executing the above transaction, the Company has approximately
8.6 Bcfe of hedges for 2007.
About the Company
PetroQuest Energy, Inc. is an independent energy company engaged
in the exploration, development, acquisition and production of
oil and natural gas reserves in the Arkoma Basin, East Texas, South
Louisiana and the shallow waters of the Gulf of Mexico. PetroQuest
trades on the New York Stock Exchange under the ticker PQ.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements are subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those projected. Among those risks,
trends and uncertainties are our ability to find oil and natural gas reserves
that are economically recoverable, the volatility of oil and natural gas prices,
declines in the values of our properties resulting in ceiling test write-downs,
our ability to replace reserves and sustain production, our estimate of the sufficiency
of our existing capital sources, our ability to raise additional capital to fund
cash requirements for future operations, the uncertainties involved in estimating
quantities of proved oil and natural gas reserves, in prospect development and
property acquisitions or dispositions and in projecting future rates of production,
the timing of development expenditures and drilling of wells, hurricanes and
other natural disasters, and the operating hazards attendant to the oil and gas
business. In particular, careful consideration should be given to cautionary
statements made in the various reports PetroQuest has filed with the Securities
and Exchange Commission. PetroQuest undertakes no duty to update or revise these
forward-looking statements.
