LAFAYETTE, La., Feb. 3 /PRNewswire-FirstCall/ -- PetroQuest Energy,
Inc. (Nasdaq: PQUE
- News) announced
today that it produced a Company-record 14.2 Bcfe during the year
ended December 31, 2004. This represents a 47% increase over the 9.6
Bcfe produced in 2003. Since its merger in 1998, production for PetroQuest
has risen 43% on a compounded annual rate. Approximately 65% of 2004's
production was natural gas.
The Company ended 2004 with 101.4 Bcfe of proved oil and gas reserves,
a new Company record. Approximately 78% of the proved reserves were
natural gas, and 45% was located in long-lived basins. This represents
a 22% increase year-to-year for proved reserves and a 40% compound
annual growth rate since the 1998 merger.
Based on the higher 2004 production rate, PetroQuest expects to post
company-record revenues, cash flows and net income for 2004. A conference
call with investors and analysts is scheduled for February 17, 2005.
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 six
MMcf per MBbl):
Natural Gas
Oil and NGL
(MBbls) (MMcfe) (MMcfe)
Proved reserves as of December 31,
2003 4,245 57,793 83,263
Revisions of previous estimates (396) 3,463 1,087
Extensions, discoveries and other
additions 559 14,574 17,928
Purchase of producing properties 124 12,544 13,288
Sale of producing properties --- --- ---
Production (818) (9,305) (14,213)
Proved reserves as of December 31,
2004 3,714 79,069 101,353
At December 31, 2004, the Company's independent petroleum engineers
estimated the net present value, excluding income taxes, of these
reserves was $326 million, using prices ($5.82 per Mcfe and $43.85
per barrel) in effect as of year-end 2004 and discounted 10%. This
compares to $214 million at December 31, 2003 using prices in effect
($5.59 per Mcfe and $32.24 per barrel) as of year-end 2003 and discounted
10%. These amounts include a reduction for estimated plugging and
abandonment costs that are also reflected as a liability on PetroQuest's
balance sheet at December 31, 2004 and 2003, in accordance with Statement
of Financial Accounting Standards No. 143.
Drilling Update
The Company had a 97% drilling success rate during 2004 with 17 exploration
and 15 development wells.
Drilling activity during the fourth quarter of 2004 included successful
discoveries at the Company's Jambalaya and Bisque Prospects in the
Gulf Coast region, two wells in East Texas and six horizontal coalbed
methane wells in the Arkoma Basin.
PetroQuest drilled its Jambalaya Prospect to a total depth of 13,500
feet, logging 43 feet total vertical depth (TVD) of net productive
sands. The well is expected to begin producing in mid-February at
a gross rate of approximately 6,000 Mcfe per day. PetroQuest has an
approximate 30% net revenue interest (NRI) in the well.
The Company's Bisque Prospect was drilled to a total depth of 14,800
feet encountering approximately 153 feet TVD of net productive sands.
This well is also expected to begin producing in mid-February at a
gross rate of approximately 15,000 Mcfe per day. As of year-end, PetroQuest
had not encountered the primary objective of the Bisque Prospect;
therefore approximately 74 feet TVD of net productive sands were not
included in the 2004 year-end reserve amounts. PetroQuest owns an
approximate 35% NRI in the well.
PetroQuest operated the drilling and completion of its first two
100% working interest (82% NRI) wells in its Southeast Carthage Field
encountering productive sands in the Cotton Valley and Travis Peak
formations. These wells are in the early stages of production and
are expected to average approximately 1,000 Mcfe per day each. Subsequent
to year-end, PetroQuest drilled and is completing its third well in
the Southeast Carthage Field, and also encountered productive sands
in the Cotton Valley and Travis Peak formations.
The drilling program in the Arkoma Basin continued in the fourth
quarter with six additional horizontal coalbed methane wells drilled
and completed. A total of 16 wells were drilled and completed by PetroQuest
in the basin during 2004 -- all of which were successful. Once the
wells are completed, a dewatering period begins which is estimated
to take approximately 12 weeks. The Company will capture gas sales
throughout the dewatering phase. PetroQuest estimates production will
average approximately 150 Mcf to 200 Mcf per day per well once fully
dewatered. PetroQuest owns an average approximate 60% NRI in these
wells.
The Company is currently drilling its Cracklin Prospect (48% working
interest) in South Louisiana. Drilling continues in the Company's
10 to 12 well 2005 program in Southeast Carthage Field and the 40+
2005 well program in the Arkoma Basin. Current plans are to spud the
File Prospect (operated, 50% working interest) in South Louisiana
within the next two weeks.
The Company's drilling capital budget for 2005 is approximately $70
to $80 million depending on commodity prices, drilling success and
related completion and facility costs.
Management's Comment
"The successful operating results coupled with higher product prices
of 2004 have positioned PetroQuest to significantly increase its drilling
and development activities to a record level. In 2005, we anticipate
drilling 74 gross (42 net) wells from our existing project inventory
utilizing our cash flows and existing credit facilities. This compares
to 33 gross (19 net) wells during 2004, or a 125% increase in the
number of wells budgeted to drill during 2005," said Charles T. Goodson,
Chairman, Chief Executive Officer and President. "Consistent with
our business plan to diversify the Company into longer-lived basins,
we plan to drill more wells during 2005 than during the previous four
years combined."
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 Nasdaq National Market under the ticker PQUE.
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 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 and in projecting future rates of production,
the timing of development expenditures and drilling of wells, 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.
