Total Reserve Additions of 413 Bcfe Exceed Record of 368 Set in 1985
Reserve Additions 204 Percent of Production, 5th Straight Year Exceeding 150
Percent
202 Bcfe Produced in 1998, 20 Percent Increase Expected in 1999
PITTSBURGH, Feb. 8 /PRNewswire/ -- Consolidated Natural Gas Company
(NYSE: CNG) today announced company records for both reserve additions and
production for 1998. Reserve additions in its exploration and production
segment totaled 413 billion cubic feet equivalent through additions,
revisions, and purchases, topping the company record of 368 set in 1985.
Included are 39 billion cubic feet of reserves purchased from The Peoples
Natural Gas Company, a CNG distribution company, late in 1998.
The reserve additions were 204 percent of production, the fifth straight
year additions surpassed 150 percent of production. CNG now has 1.7 trillion
cubic feet equivalent of reserves, an increase of about 58 percent since the
end of 1993. CNG produced 202 billion cubic feet equivalent of natural gas in
1998, topping the company record of 199 Bcfe set in 1997.
The breakdown was 154.9 billion cubic feet of natural gas and 7.9 million
barrels of oil. Production has increased 67 percent the last three years and
CNG expects a 20 percent increase in 1999 as new projects come on line.
"Our record reserve additions and record production came primarily from
our superb operations in the Gulf of Mexico," said George A. Davidson, Jr.,
chairman and chief executive officer. "We've used the latest technology and
our expertise to find energy and produce it economically in what some call a
difficult area to succeed."
Production has begun at a new complex in the Gulf's Main Pass area, the
Nautilus-Atlantis-Nemo complex, with full production expected by the end of
February. The complex has three platforms, eight wells and facilities
designed to handle initial deliverability of 240 million cubic feet of natural
gas and 20,000 barrels of condensate a day. CNG owns 68.5 percent of
Nautilus, 75 percent of Atlantis, 100 percent of Nemo and is the operator of
the complex.
CNG's finding and development costs of 83 cents per thousand cubic feet
equivalent (Mcfe) for 1998 were lower than the 88 cents per Mcfe in 1997. The
five-year average finding and development costs for the years 1994 through
1998 is 80 cents per Mcfe.
The company's depreciation, depletion and amortization (DD&A) rate was 89
cents per Mcfe. The DD&A rate has declined from $1.19 in 1992, including a
13-cent drop due to a write-down of producing properties in 1995. CNG's
average lifting costs were 31 cents per Mcfe in 1998, as the company continues
to have one of the lowest rates in the industry.
"We have put together an efficient E&P operation that can succeed even
when prices are low," said Pat Riley, president of CNG Producing Company. "We
have a quality E&P staff, a growing program both onshore and offshore, and we
believe that the U.S. oil and natural gas business presents very attractive,
long-term opportunities."
CNG Producing Company purchased the reserves from Peoples Natural Gas for
$18.5 million. The reserves were formerly cost-of-service reserves in CNG's
regulated distribution segment. CNG now has no cost-of-service reserves.
Consolidated Natural Gas Company (CNG) is one of the nation's largest
producers, transporters, distributors and retail marketers of natural gas.
The company's natural gas transmission and distribution operations serve
customers in Ohio, Pennsylvania, Virginia, West Virginia, New York and other
states in the Northeast and Mid-Atlantic regions. CNG explores for and
produces oil and natural gas in the United States and Canada, and makes
selective investments abroad.
This press release contains forward-looking statements. The company
wishes to caution readers that the assumptions which form the basis for
forward-looking statements with respect to or that may impact earnings for
fiscal 1999, and thereafter, include many factors that are beyond the
company's ability to control or estimate precisely, such as estimates of
future market conditions and the behavior of other market participants. Other
factors include, but are not limited to, weather conditions, economic
conditions in the company's service territory, fluctuations in energy-related
commodity prices, conversion activity, other marketing efforts and other
uncertainties.
CNG's recent news releases are available 24 hours a day on the Internet,
by fax machine, or by voice recording. On the Internet, use CNG's Web site:
http://www.cng.com For faxing, call 1-800-758-5804 on a touch-tone phone and enter
CNG's company extension, which is 203456. From a menu, you will then be able
to select releases that will be faxed to you immediately without charge. For
voice recordings, call 1-888-CNG-NEWS. This line is toll-free.
SOURCE Consolidated Natural Gas Company
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Related links:
http://www.cng.com
CONTACT:
Dan Donovan of CNG, 412-690-1370
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