Kerr-McGee raises production outlook

Independent producer Kerr-McGee, for the second time since October, has raised it 2003 daily production guidance to 171,000 barrels of oil equivalent from an average daily range of 242,000 to 269,000 barrels of equivalent last month.

Rick Buterbaugh, Kerr-McGee’s vice president of investor relations, said in a Nov. 25 conference call with analysts that the company has raised the lower end of previous guidance for the 2004 fourth quarter for both oil and gas to 133,000 to 142,500 barrels of oil per day and 685 million to 785 million cubic feet per day of natural gas.

However, Kerr-McGee reiterated earlier guidance that property divestitures in China and the United States are expected to reduce 2004 average daily production to about 260,000 barrels of oil equivalent, nearly a 7 percent decrease from the anticipated 2003 level.

Kerr-McGee’s daily production in the 2003 third quarter fell to 141,000 barrels of oil from nearly 193,000 barrels for the same period in 2002 and daily natural gas dropped to 699 million cubic feet from 789 million cubic feet, due largely to the sale of $1 billion of high-cost, non-core assets.

The company also has said in 2004 it plans to spend about $915 million on projects, plus $300 million for exploration expense, down from 2003 spending levels. The company said it plans to operate within cash flow and to reduce debt.

In September, Kerr-McGee announced that it would reduce its non-union workforce by 200-250 jobs or 7 to 9 percent of its total workforce, as part of a $45 million cost-saving plan.