HOUSTON, March 15 /PRNewswire/ -- KCS Energy, Inc. (NYSE: KCS) announced
today the results of its 1999 drilling program and its year-end reserves.
For the year ended December 31, 1999, the Company drilled 75 wells,
completing 64 as productive wells for an overall success rate of 85%.
The Company achieved a 77% success rate in drilling 13 exploration wells.
Twenty of the 75 wells were proved undeveloped locations in the December 31,
1998 reserve report.
Total reserves added by the drilling and working interest acquisition
programs for the year were 49.8 billion cubic feet equivalent (Bcfe).
According to William N. Hahne, KCS Senior Vice President and Chief Operating
Officer, KCS replaced 145% of its 1999 working interest production of
34.3 Bcfe (as adjusted for asset sales) at a cost of 96 cents per million
cubic feet equivalent (Mcfe). Total production to be reported for the year
includes an additional 1.8 Bcfe attributable to working interest properties
sold in 1999. Capital investment in working interest properties was
approximately $47.8 million, including $5.0 million of capitalized overhead
and interest. The 1999 drilling program also developed 5.7 Bcfe of proved
undeveloped reserves listed in the December 31, 1998 reserve report.
The Company acquired 6.1 Bcfe of Volumetric Production Payment (VPP)
reserves, replacing 31% of its VPP production (as adjusted by 3.0 Bcfe for
asset sales). Curtailed capital restricted the funds that were available for
investment in the VPP program in 1999.
Year-end reserves reflect downward revisions of 7.9 Bcfe, of which
5.2 Bcfe were associated with the restructuring of two gas sales contracts in
Rocky Mountain fields, which lowered natural gas liquids reserves to be
recovered in third-party gas processing plants. As previously announced and
in keeping with the Company's strategy of divesting non-core assets, KCS sold
9.6 Bcfe of working interest and 12.1 Bcfe of VPP reserves. These sales
during 1999 yielded net proceeds of $27.7 million.
At year-end 1999, KCS' proved reserves, as determined by its independent
reserve engineers, totaled 277.2 Bcfe, 80% which are proved developed
reserves. Working interest reserves represented 94% of the year-end reserves
and 88% of year-end PV10 value.
James W. Christmas, President and Chief Executive Officer of KCS, stated,
"Since March 1999, the Company used a significant portion of cash flow to
repay approximately $43 million of bank debt. Although we were forced to
curtail our VPP program because of limited capital, we had excellent drilling
and acquisition results in 1999. In addition, we have a quality portfolio of
drilling locations for the year 2000."
KCS is an independent energy company engaged in the acquisition,
exploration, development and production of natural gas and crude oil with
operations in the Mid-Continent and Gulf Coast regions. The Company also
purchases reserves (priority rights to future delivery of oil and gas) through
its Volumetric Production Payment (VPP) program. For more information on
KCS Energy, Inc., please visit the Company's web site at
http://www.kcsenergy.com .
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Among the important factors that could
cause actual results to differ materially from those indicated by such
forward-looking statements are delays and difficulties in developing currently
owned properties, the failure of exploratory drilling to result in commercial
wells, delays due to the limited availability of drilling equipment and
personnel, fluctuations in oil and gas prices, general economic conditions and
the risk factors detailed from time to time in the Company's periodic reports
and registration statements filed with the Securities and Exchange Commission.
To receive KCS' latest news and other corporate developments via fax at no
cost, please call 1-800-PRO-INFO. Use company code KCS. See also
http://www.frbinc.com .
SOURCE KCS Energy, Inc.
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Related links:
http://www.kcsenergy.com
CONTACT:
William N. Hahne, Senior VP & Chief Operating
Officer of KCS Energy, Inc., 713-877-8006, or General Info,
Marianne Stewart, 212-661-8030, Analysts, Beth Lewis,
617-342-7003, or Media, David Closs, 212-661-8030, all of The
Financial Relations Board
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