USA: El Paso Announces New Resource Estimates

El Paso Corporation announced today the following forecasts for its exploration & production business unit:

--  Proved oil and natural gas reserves of approximately 4.0 trillion
    cubic feet equivalent (Tcfe) at December 31, 2011 -- an increase of
    approximately 18 percent from the 3.4 Tcfe reported as of December 31,
    2010
--  Year-end risked future drilling inventory of approximately 9.7 Tcfe,
    up from 8.0 Tcfe at December 31, 2010, with the majority of the
    increase coming from oil shale programs in the Eagle Ford and
    Wolfcamp. The 9.7 Tcfe risked future drilling inventory estimate
    includes approximately 2.0 Tcfe of proved undeveloped reserves and 7.7
    Tcfe of risked unproved resources. Approximately 60 percent the 9.7
    Tcfe of risked future drilling inventory is from oil and liquids,
    measured on a 6:1 equivalent basis
--  Full-year 2011 production of 830 to 840 million cubic feet equivalent
    per day (MMcfe/d), consistent with existing guidance. At the midpoint,
    this represents an approximate 7 percent increase from 782 MMcfe/d in
    2010. The increase is after asset sales that were expected to
    contribute an additional 15 MMcfe/d to full-year 2011 volumes
--  Year-end 2011 exit rate of more than 900 MMcfe/d, which includes
    23,000 to 24,000 barrels per day of oil production
--  2011 capital expected to come in as planned at approximately $1.6
    billion

El Paso is disclosing these forecasts as it engages with potential buyers for its exploration & production assets. On October 16, 2011, Kinder Morgan, Inc. announced that it had entered into an agreement to acquire El Paso, and that in connection with the purchase, it planned to sell El Paso’s exploration & production assets.

“Our E&P business is completing a terrific year, and our results reflect the significant evolution of our asset base,” said Brent Smolik, president of El Paso Exploration & Production Company. “We now have more than 20 years of future drilling inventory that is low-risk, oily and offers significant production and reserve growth potential. Our business has excellent momentum as we enter 2012.”

[mappress]

LNG World News Staff, December 19, 2011; Image: El Paso