During an update on its operations, Stone Energy Corp. (SGY) said Sept. 24 it has shut-in a field in the Appalachia Basin.
Stone, based in Lafayette, La., shut-in its Mary Field on Sept. 1. The shut-in curtails about 100-110 million cubic feet equivalent per day (MMcfe/d) of production. This leaves about 25 MMcfe/d producing from the Heather and Buddy fields in Appalachia.
Low commodity pricing, including negative differentials in the region, combined with fees for transportation, processing and gathering, reduced the operating margins to an unacceptable level, the release said.
As a result, despite being above production guidance for the first two months of the third quarter, production for the quarter is now expected to be below the previously stated guidance range of 39-41 thousand barrels of oil equivalent per day (Mboe/d), or 234-246 MMcfe/d.
The company said it is revising its production guidance to 37.5-38.5 Mboe/d, or 225-231 MMcfe/d. If the Mary Field remains shut-in, the annual guidance of 42-44 Mboe/d, or 252-264 MMcfe/d, will need to be adjusted to account for these curtailed volumes.
Given the low margins in Appalachia, the cash flow impact from the curtailed volumes is not expected to be material for the third quarter. Higher margin Gulf of Mexico volumes experienced minimal downtime in the third quarter.
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