TXCO Resources Adjusts Operations, CAPEX Plans
22 Décembre 2008 - 6:38PM
Business Wire
TXCO Resources Inc. (Nasdaq:TXCO) today announced it has reduced
operating levels in certain South Texas project areas and expects
to announce details of its ongoing capital expenditure program in
January 2009, in response to current oil and gas market
uncertainties. �TXCO has outstanding long-term growth
opportunities,� said CEO James E. Sigmon. �However due to the
unstable financial and commodity price environment we currently
face, we have refocused our efforts and are taking proactive steps
designed to improve the Company�s liquidity and financial strength
going forward, including selective asset divestitures and holding
active discussions with our lenders. We believe these are prudent
steps to take, given the current economic environment.� The Company
has undertaken important and systematic cost reductions
necessitated by volatile, lower commodity prices, affecting the
entire oil and gas industry, and its need to comply with existing
bank credit facility covenants. These actions include a previously
announced slowdown in fourth-quarter drilling activity, as well as
operating staff reductions in two wholly owned subsidiary
companies, TXCO Drilling and Charro Energy, the Company�s heavy oil
subsidiary. The combined staff reduction is 20 percent of the total
employee count of TXCO and its subsidiaries. Additionally, two
steam generators and five steam-injection wells have been shut-in
temporarily, suspending steam injection on the fracture-assisted
steamflood technology (FAST) pilot project, one of Charro�s San
Miguel oil sands pilot areas. The separate, steam-assisted gravity
drainage (SAGD) pilot remains in operation and is seeing increases
in initial oil production rates. 2009 CAPEX TXCO will announce its
2009 CAPEX budget in January so it can further evaluate and refine
capital and operating alternatives. As previously announced,
ongoing CAPEX will be aligned with cash flow projections and will
be flexible to adjust to rapidly changing market conditions,
commodity price fluctuations, drilling plan changes by partners,
rig availability, well results and operational developments.
Additionally, TXCO intends to pursue selective asset divestitures
and industry joint-venture opportunities to further enhance
liquidity levels. The budget will remain focused on key projects
with high-impact potential, such as the Pearsall and Eagle Ford
shale gas resource plays, as well as TXCO�s legacy Glen Rose
Porosity oil play. Current Operations Currently, TXCO has two rigs
running on its core Maverick Basin acreage. An annual hunting
season drilling moratorium on the majority of its Maverick Basin
leases began in November, which normally impacts fourth-quarter and
early first-quarter drilling levels and oil and gas sales. This
seasonal moratorium period ends in late January. TXCO is developing
several major projects in the Maverick Basin currently. In the
Pearsall shale play, TXCO plans to perform a high-pressure,
eight-stage fracture stimulation of the San Pedro 2H (50 percent
working interest through completion) before year end. This
state-of-the-art frac treatment was delayed due to tight supplies
of high-strength proppants. The well features a 3,050-foot
horizontal lateral with a cemented liner. It will be the Company�s
first Maverick Basin completion utilizing this innovative
eight-stage approach, which has been highly successful in unlocking
high gas volumes from similar shale gas resource plays, such as the
Eagle Ford, Haynesville and Woodford shales in South Texas and
Louisiana. The Company�s Pearsall shale gas resource project area
consists of 848,300 gross (341,000 net) acres covering 1,325 gross
(533 net) sections, with estimated recoverable gas of 16 to 24 bcf
per section. On the Eagle Ford play, TXCO currently is rigging up
to re-enter and drill a 3,300-foot horizontal lateral on the
Briscoe Catarina West 1H (50% WI through completion). The lateral
will have a cemented liner and will be fractured in 8-10 stages, as
done by other operators developing the Eagle Ford. TXCO�s emerging
Eagle Ford play covers 565,800 gross (312,900 net) acres covering
884 gross (489 net) sections, with estimated recoverable gas of 16
to 22 bcf per section. Recently, Petrohawk Energy Corporation
completed an Eagle Ford well horizontally using a 10-stage frac
that produced 9.1 mmcfde. The well is in LaSalle County, Texas,
east of TXCO�s acreage, and is indicative of the Eagle Ford�s high
potential. On the San Miguel oil sands project, initial oil
recovery is under way as high-temperature steam injection continues
on the SAGD pilot. TXCO hopes to obtain steam-to-oil ratio data on
this project sometime during the first half of 2009. About TXCO
Resources TXCO Resources is an independent oil and gas enterprise
with interests in the Maverick Basin, the onshore Gulf Coast region
and the Marfa Basin of Texas, and the Midcontinent region of
western Oklahoma. It has a consistent record of long-term growth in
its proved oil and gas reserves, leasehold acreage position,
production and cash flow through its established exploration and
development programs. TXCO�s business strategy is to build
shareholder value by acquiring undeveloped mineral interests and
internally developing a multi-year drilling inventory through the
use of advanced technologies, such as 3-D seismic and horizontal
drilling. It accounts for its oil and gas operations under the
successful efforts method of accounting and trades its common stock
on Nasdaq�s Global Select Market under the symbol �TXCO.�
Additional information, including recent regulatory filings and
investor presentations, is available at the Company�s Web site,
www.txco.com. Forward-Looking Statements Statements in this press
release that are not historical, including statements regarding
TXCO�s or management�s intentions, hopes, beliefs, expectations,
representations, projections, estimations, plans or predictions of
the future, are forward-looking statements and are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements include those relating to
estimated financial results, or expected prices, production
volumes, well test results, reserve levels and number of drilling
locations expected, drilling plans, including the timing, category,
number, depth, cost and/or success of wells to be drilled, expected
geological formations or the availability of specific services,
equipment or technologies. It is important to note that actual
results may differ materially from the results predicted in any
such forward-looking statements. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including
without limitation, the costs and accidental risk inherent in
exploring and developing new oil and natural gas reserves, the
price for which such reserves can be sold, environmental concerns
affecting the drilling of oil and natural gas wells, impairment of
oil and gas properties due to depletion or other causes, the
uncertainties inherent in estimating quantities of proved reserves
and cash flows, as well as general market conditions, competition
and pricing. TXCO undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events
or otherwise. More information about potential factors that could
affect TXCO�s operating and financial results is included in TXCO's
annual report on Form 10-K for the year ended December 31, 2007,
and its Form 10-Q for the quarter ended September 30, 2008. These
reports and all previously filed documents are on file at the
Securities and Exchange Commission and can be viewed on TXCO's Web
site at www.txco.com. Copies are available from TXCO without
charge.
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