Capital Investment First Quarter 2013
Venoco's first quarter capital expenditures for exploration, development and other spending were $21 million, including $13 million for drilling and rework activities, $1 million for facilities, and the remaining $7 million for land, seismic and capitalized G&A.
In the first quarter of 2013, the company spent $18 million or 86% of its capital expenditures on its Southern California legacy fields, primarily at the South Ellwood field. During the quarter, the company completed one well (3242-4RD), which was a re-drill of a wet well originally completed in 2012. The 3242-4RD was spud in late 2012 and completed in February 2013. The well has produced at an average rate of approximately 1,400 gross BOE per day over the last 30 days. Additionally, during the first quarter, the company continued work on the 3242-19, a probable location which was originally spud in 2012 but was suspended to facilitate the re-drill of the 3242-4RD well. The company returned to drilling operations on the 3242-19 well during the first quarter; however, it has suspended drilling again as a result of a generator failure. The company is currently working to have the generator replaced or repaired. In the interim, the company has begun preparations to drill another location that would bottom near the eastern boundary of the field and expects to initiate drilling activity on this well in the near future. Once the eastern boundary well is completed, the company intends to continue with the 3242-19 later in the year.
In the first quarter of 2013, the company had relatively minimal onshore Monterey capital expenditures of $3 million or 14% of its total first quarter capital expenditures, incurred primarily for facilities.
In March 2013, the company entered into an amendment to the credit agreement governing its revolving credit facility, which resulted in an increase to the borrowing base to $270 million (subject to commitments of $268 million), revisions to the total debt leverage covenant ratio and the addition of a secured debt leverage covenant. On March 29, 2013, the company used proceeds from the amended revolving credit facility to repay the remaining principal outstanding on the second lien term loan.
The following summarizes the company's 2013 guidance:
•Production: 10,000 - 10,500 BOE/d •Capital Budget: $90 - $100 million •Lease Operating Expenses: $20.50 - $21.50 per BOE •General & Administrative Expenses (excluding non-cash charges related to share-based compensation): $11.00 - $11.50 per BOE •Production & Property Taxes: $1.80 - $2.20 per BOE •DD&A: $12.50 - $13.50 per BOE
Earnings Conference Call
Venoco will host a conference call to discuss results Tuesday, May 14, 2013 at 11:00 a.m. Eastern time (9 a.m. Mountain). The conference call will be webcast and those wanting to listen may do so by using a link on the Investor Relations page of the company's website at http://www.venocoinc.com. Those wanting to participate in the Q & A portion can call (866) 202-3048 and use conference code 66593886. International participants can call (617) 213-8843 and use the same conference code.
A replay of the conference call will be available for one week by calling (888) 286-8010 or, for international callers, (617) 801-6888, and using passcode 42870486. The replay will also be available on the Venoco website for 30 days.
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