In the second quarter of 2013, the company spent $21 million or 95% of its capital expenditures on its Southern California legacy fields, primarily at the South Ellwood field. During the quarter, the company drilled the 3242-15RD well in the South Ellwood field, which bottoms near the eastern boundary of the lease. The well was completed in early July and is still in the process of de-watering. During this process, the well has averaged more than 1,000 gross BOE/d over the last 10 days. The first two wells that were drilled to the same general location were the 3242-12RD (completed in June 2012) and the 3242-4RD (completed in February 2013). The combined gross production from these two wells during July was more than 3,200 BOE/d. After drilling the 3242-15RD well, Venoco returned to drilling the 3242-19 well, which was suspended earlier in the year. This well targets a probable location in a new fault block north of the existing South Ellwood field. Drilling of the well was finished in July and the well is expected to be completed by mid-August. In addition to the completion costs for the 3242-19 well, the company will incur capital expenditures in the second half of 2013 to upgrade the power cable to Platform Holly, which will be completed in the fourth quarter.
Additionally, during the quarter, the company spud its first well for the year at the West Montalvo field, with the well expected to be completed in early August. The drilling program at the field was delayed by about two months due to the unavailability of the drilling rig. As a result of the delay to the drilling program, the company now expects to spud a total of four wells and complete three wells at West Montalvo during 2013.
In the second quarter of 2013, the company had relatively minimal onshore Monterey capital expenditures of $1 million or 5% of its total second quarter capital expenditures.
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 Friday, August 2, 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 (877) 474-9506 and use conference code 60258542. International participants can call (857) 244-7559 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 50233910. The replay will also be available on the Venoco website for 30 days.
About the Company
Venoco is an independent energy company primarily engaged in the acquisition, exploitation and development of oil and natural gas properties primarily in California. Venoco operates three offshore platforms in the Santa Barbara Channel, has non-operated interests in three other platforms and operates several onshore properties in Southern California.
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