HOUSTON, Feb. 12, 2013 /PRNewswire/ -- W&T Offshore, Inc. (NYSE: WTI) announced that its Board of Directors has approved a 2013 capital budget of $450 million. The Company also announced production guidance for the first quarter of 2013 in a range of 4.3 MMBoe to 4.8 MMBoe and for the full year of 2013 in a range of 17.0 MMBoe to 18.7 MMBoe. In addition, the Company provided details about its capital expenditure programs and an operational update, which includes positive results in both its horizontal drilling and 40-acre spacing pilot programs, adding value to its Yellow Rose project.
2013 Capital Budget
Approximately 63% of the $450 million capital budget for 2013 is identified as exploratory drilling to drive organic growth of both reserves and production, with the remaining 37% of the budget directed to oil-focused development activities. We anticipate allocating 63% of the 2013 budget to projects in the Gulf of Mexico, both on the shelf and in the deepwater, and 37% to projects onshore in Texas.
Tracy W. Krohn, Chairman and Chief Executive Officer, stated, "In the past few years we have added new exploration projects to support our goal of achieving growth organically through the drill bit, as well as through acquisitions. In 2013 we are increasing our focus on exploration and building on recent successes. We have great news with our Yellow Rose project as we are pleased to report positive results in our horizontal drilling program in the Wolfberry; positive results in our 40-acre spacing pilot program; and production from the field is up 100% over last year at this time."
"Our 2013 capital budget of $450 million is designed with a balance of offshore shelf, deepwater and onshore exploration drilling activity to drive organic growth, plus a number of development projects focused on expanding our oil production. As usual, our budget does not include acquisitions, but we will continue to pursue acquisitions in this very active market to supplement our expected organic growth. As in the past, we expect to continue to drill within our cash flow.
We began 2013 with a high level of activity that was heavily weighted toward exploration projects and currently have four rigs working in the Gulf of Mexico. We believe our offshore exploration program offers solid opportunities for organic reserve and production growth, as well as builds on our recent successes.
At our highly successful "Mahogany" field, our fifth well in our multi-well drilling program, the Ship Shoal ("SS") 349 A-9 development well was brought on production in mid-January at an initial rate of approximately 2,700 Boe per day from the P-sand, which has traditionally been the field's principal productive reservoir. The A-9 well exceeded pre-drill expectations in our main target. Additionally, it discovered another upside reservoir which was also completed and will be retained as a future zone change, increasing total proved reserves for the field.
Current average daily gross production from the Mahogany field is approximately 9,150 Boe (approximately 75% crude oil) which is up from about 1,300 Boe per day gross in late 2011, an increase of approximately 700% over the last 15 months.
On January 15, 2013, we spud the SS 349 A-14 well, the sixth well in our multi-well drilling program at our Mahogany field, which is an exploration well designed to test the T-sand, a deep play located beneath our main reservoir. If successful, it will expand our proved reserves and possibly create additional development opportunities in the field. The A-14 well also holds proved reserves in the P-sand level, serving as a robust back-up to the exploratory T-sand test. Following the SS 349 A-14 well, we plan to drill the SS 349 A-15 well which is planned to target multiple stacked amplitudes in the sub-salt section. The A-15 also has additional field expansion potential in the P-sand and if successful will further expand the P-sand reservoir limits. We continue to have excellent drilling results to date in this high impact oil field and in the reserve and production expansion potential this field has for the Company.
Source: W&T Offshore, Inc.
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