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Stone Energy Corporation Announces 2013 Capital Expenditure Budget And Production Guidance

Stocks in this article: SGY

LAFAYETTE, La., Dec. 19, 2012 /PRNewswire/ -- STONE ENERGY CORPORATION (NYSE: SGY) today announced that its Board of Directors has authorized a 2013 capital expenditure budget of $650 million, which excludes acquisitions and capitalized SG&A and interest.  The budget is spread across Stone's major areas of investment with approximately 29% allocated to Deep Water, 8% allocated to Deep Gas projects, 27% allocated to the GOM conventional shelf, 33% allocated to the Marcellus shale and 3% allocated to Onshore Exploration projects.  The allocation of capital across the various areas is subject to change based on several factors including permitting times, rig availability, non-operator decisions, farm-in opportunities and commodity pricing.

The Deep Water capital budget is focused on exploration drilling, preparation work to accommodate a rig at the Pompano platform, long lead-time items for future operated drill wells, template work for sub-sea tie backs to the Pompano platform and lease acquisition.  Stone expects to participate in 2-4 non-operated exploration wells for the year. Approximately $80 million is projected to be spent on long lead-time items for operated deep water drilling and template tie-back expenditures for the Pompano platform.

The Deep Gas capital budget incorporates a third well at the La Cantera field and possibly 1-3 exploration wells.  These exploration projects might include the onshore La Montana prospect and the offshore Tom Cat prospect. 

The GOM conventional shelf capital budget provides for development drilling, recompletions, facilities and plugging and abandonment operations. Stone plans to drill 3-5 development wells primarily around the Ship Shoal 113 field, the Main Pass area and onshore south Louisiana. In addition, Stone has budgeted approximately $35 million for recompletions and facilities improvement to the existing infrastructure and approximately $65-$70 million for P&A operations.

The Marcellus Shale capital budget provides for development drilling, infrastructure investments and acquisition of additional lease-hold interests.  The budget includes funds for a one horizontal rig program and the drilling and fracturing of 26-32 wells. This increase from 2012 is driven by operational efficiencies realized this past year.  These Marcellus wells will be drilled in the liquids rich Mary and Heather areas as well as potentially performing a well test on the Upper Devonian formation.

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