Magnum Hunter hikes capital budget 11% to $245 million

Ray Tyson

Exploration and production independent Magnum Hunter said Dec. 20 that it increased its 2004 capital budget by $25 million to $245 million, an 11 percent increase.

Most of the increase will be used for drilling activities on the Gulf of Mexico’s outer continental shelf, Magnum Hunter said, adding that it wanted to boost drilling largely to take advantage of the high commodity price environment and the company’s large prospect inventory.

Of the $245 million budget, $150 million will be spent in the Gulf of Mexico, $37 million in southeast New Mexico, $28 million in West Texas, $14 million in the U.S. Midcontinent, and $16 million onshore Gulf Coast.

Magnum Hunter’s 2004 capital budget is being financed entirely from the company’s record high levels of cash flows from operating activities, the company said.

The company plans to drill about 170 new wells this year, including 25 wells in shallow waters of the U.S. Gulf and 145 onshore wells, with a large percentage located in New Mexico, West Texas and the Texas Panhandle.