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| Seven Seas Provides Financial and Operations Update |
HOUSTON, Oct. 10 /PRNewswire-FirstCall/ -- Seven Seas Petroleum Inc. (Amex: SEV) announced today that the Company did not make the $1.1 million monthly escrow payment required under its Note Purchase and Loan Agreement with Chesapeake Energy Corporation ("Chesapeake"). Under this agreement, the Company is required to make monthly escrow payments equal to one-sixth of the semiannual $6.9 million interest payment on the 12 1/2% $110 Million Senior Subordinated Notes. Seven Seas has 20 days from October 10, 2002 to cure the default. The Company and Chesapeake are in discussions concerning the escrow payment and other matters relating to the Company's current financial circumstances. As previously reported, there continues to be uncertainty over whether the Company will make the $6.9 million semiannual interest payment on November 15, 2002. Escuela 2 Update The Escuela 2 reached a total depth of 20,250 feet on September 19, 2002. All electric logs and formation pressure tests have been completed. The Company believes the well should produce hydrocarbons from the lower Cretaceous Utica formation. Independent analyses by industry experts agree that the well should be tested. Management believes that hydrocarbon shows encountered during drilling operations, log analyses, and formation pressure tests all support the conclusion that the well should be production tested. To date, Seven Seas has incurred approximately $23 million in costs on the Escuela 2 and is presently performing remedial operations to repair a leak in the 9 5/8 inch casing. An estimated $1.2 million in additional costs will be required to safely restore the Escuela 2 well bore to a condition that allows for production testing or temporary abandonment. After restoring the integrity of the well bore, the Company may suspend operations in order to secure additional financing or to find a partner to participate in the completion and testing and any future operations on the Deep Dindal prospect. Guaduas Oil Field Update Production from the Guaduas Oil Field averaged approximately 5,800 barrels of oil per day, (2,680 net to Seven Seas) during the month of September compared to 6,100 barrels of oil per day (2,800 net to Seven Seas) during the month of August. The reduction resulted from the loss of production while workover operations were conducted on certain wells. During the first 10 days of October, with all producing wells online, production has averaged approximately 6,200 barrels of oil per day (2,860 net to Seven Seas). The Company plans to continue with its operations to maximize production from existing wells. Seven Seas Petroleum Inc. is an independent oil and gas exploration and production company operating in Colombia, South America. Statements regarding anticipated oil and gas production and other oil and gas operating activities, including the costs and timing of those activities, are "forward looking statements" within the meaning of the Securities Litigation Reform Act. The statements involve risks that could significantly impact Seven Seas Petroleum Inc. These risks include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services and government regulation and foreign political risks, as well as other risks discussed in detail in the Seven Seas Petroleum Inc.'s filings with the U.S. Securities and Exchange Commission.SOURCE Seven Seas Petroleum Inc.
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Daniel Drum, Investor Relations of Seven Seas
Petroleum Inc., +1-713-622-8218
