Evergreen projects 37% jump in production

Ray Tyson

Petroleum News Houston correspondent

Coalbed methane producer Evergreen Resources is now projecting a 37 percent increase in production in 2004 versus last year, despite a slow start because of extreme cold weather in Colorado, Utah and Canada.

“We have had a slower than normal start in 2004, partly due to operations delays resulting from our using non-Evergreen contractors on our exploration projects,” Mark Sexton, Evergreen’s chief executive officer, said Feb. 18. This year’s anticipated large increase in production is partly due to Evergreen’s recent acquisition of Carbon Energy, completed in late October 2003. Last year was a record for Evergreen with production of 46.3 billion cubic feet of gas equivalent, proven reserves of 1.495 trillion cubic feet of equivalent, oil and gas revenues of $21.5 million, and net income of $72.6 million.

Evergreen’s profit surged in the 2003 fourth quarter to $17.6 million or 40 cents per share, which included an after-tax charge of $2 million, compared to net income of $1 million or 3 cents per share for the same period a year earlier.

Evergreen said it plans to spend $220 million on projects in 2004, about $110 million of which earmarked for coalbed methane operations in the Raton basin. Of the total, $34 million will be spent in the Piceance/Uintah basins, $34 million in Canada, about $33 million on Forest City basin exploration, and $2 million in Alaska.

In Alaska, Evergreen is currently in the process of drilling five stratigraphic core holes on various parts of its acreage to obtain additional data, including information on coal quality and gas content. Based on the results, the company said it will determine potential locations for additional core holes or multi-well pilots.