E&P Capital Spending Increases to about $465 Million;
CNG Expects 25 Percent Annual Production Increase in 1999
PITTSBURGH, June 17 /PRNewswire/ -- Consolidated Natural Gas Company
announced today that its exploration and production (E&P) subsidiary, CNG
Producing Company, has entered into a definitive purchase agreement to acquire
interests in Lopeno and two adjacent South Texas natural gas fields.
Earlier in the year, CNG Producing purchased about a 50 percent interest
in the Lopeno field, and together with the most recent purchase, CNG Producing
will own nearly a 100 percent interest in Lopeno. On a combined basis, the
company will pay $125 million for the two transactions.
Lopeno and the adjacent fields, located in Zapata County, Texas, contain
50 active wells with current working interest production of 56 million cubic
feet of natural gas a day. The final transaction should be closed by late
summer after completion of due diligence.
"Lopeno is a relatively new field with long-lived reserves that provide a
nice balance to our Gulf of Mexico base," said Pat Riley, president of CNG
Producing Company. "The field has numerous development drilling opportunities
that will help us to sustain our production growth objectives while
maintaining one of the lowest cost structures in the industry."
As a result of the acquisitions, CNG's exploration and production capital
spending in 1999 will increase to about $465 million, up $139 million from the
originally approved budget of $326 million.
"We are using CNG's financial strength to take advantage of opportunities
we see in exploration and production," Riley said. "While many other
companies have curtailed capital investments in 1999, we have increased our
spending to take advantage of the current environment. At $465 million, CNG
will have one of the five largest domestic E&P budgets in the country for an
independent oil and gas company."
CNG is now targeting 1999 production at 250 Bcfe, about a 25 percent
increase over 1998's record production level. The increase is attributable to
new production from the Nautilus/Nemo/Atlantis complex in the Gulf of Mexico,
which came on line during the first quarter; additional production from the
previously announced West Cameron Block 76 field development wells in the Gulf
of Mexico; as well as the South Texas acquisitions.
CNG Producing Company explores for and produces natural gas and oil
throughout the United States and in Canada. It is a subsidiary of Pittsburgh-
based Consolidated Natural Gas Company (NYSE: CNG), one of the nation's
largest producers, transporters, distributors and retail marketers of natural
gas.
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 Consolidated Natural Gas,
412-690-1370
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