Stone Energy Corp. (NYSE: SGY) detailed its 2015 capex budget, initial production and cost guidance, and operational updates.
The board of directors authorized a $450 million capex budget. Of the total, only 8% will go to Stone’s Marcellus operations in Appalachia, while the bulk—75% will go to deepwater/Gulf Coast operations—with 13% going to abandonment and 4% going to business development, the company said.
The 8% Appalachia budget will support acquisition of additional core leasehold interests and the drilling of several Marcellus wells in the first quarter before releasing the Marcellus drilling rig. No further Marcellus drilling is projected for the rest of the year, the company said. Late in fourth-quarter 2015, Stone expects to receive a dual-purpose Utica/Marcellus rig for a 2016 drilling program.
In 2015, Appalachian production is expected to increase more than 15% “despite the decision not to drill and complete any wells during the year.”
Lease operating expense should range between $115 million and $$125 million, down 35% from 2014 partly because of cost-cutting efforts, Stone said. Transportation, processing and gathering expense should be between $69 million and $75 million “up slightly vs. 2014 as annual Appalachian volumes are projected to increase, the company said.
Regarding operations, the Utica well with a 3,605-foot lateral, producing since Dec. 1, has averaged about 15 MMcf/d, the company said.
Regarding liquidity, as of Dec. 31, there was about $250 in cash and restricted cash. The $500 million credit facility remained undrawn. The bank group affirmed the $500 million borrowing base in October.
Lafayette, La.-based Stone Energy Corp. develops and produces onshore and offshore domestic oil and natural gas.
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