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Unocal tells analysts production could rise 63 percent by 2007
By Petroleum News • Alaska
Unocal Corp. told analysts Sept. 5 that the company expects its worldwide net oil and gas production could average nearly 800,000 barrels of oil equivalent per day in 2007, up 63 percent from the company's 2000 average production.
“Our legacy assets in North America and Asia continue to perform and grow, while our exploration programs are beginning to deliver new resources for us,” Charles R. Williamson, Unocal's chief executive officer, told Lehman Brothers’ 15th Annual CEO Energy Conference in New York City.
“We expect to achieve this production growth through development of frontier discoveries that we have already made and aggressive development of additional oil and gas resources in our established operating areas,” Williamson said. “Our goal is to maintain a stable capital spending program of $1.8-$2.0 billion per year, with a 45 to 50 percent debt-to-total-capitalization ratio, while reducing finding and development costs to about $5.50 per BOE.”
Natural gas two-thirds of resource Natural gas accounts for about two-thirds of the company's current production and proved reserves. “We're a major gas producer in North America and we have huge discovered, but unbooked, gas resources in Asia,” Williamson said. “By coupling this asset base with our industry-leading drilling capability, we fully expect to meet the production and cost targets that we've outlined.”
Williamson told analysts where Unocal would achieve the additional oil and gas production. “In the U.S., we are looking a new deep gas production on the Gulf of Mexico shelf, GOM deepwater projects and additional oil and gas production in South Alaska,” Williamson said. “We also see steady growth in oil production in Thailand and Azerbaijan, as well our deepwater resources in Indonesia.”
Unocal’s worldwide net production for the year should average between 505,000 to 515,000 BOE. In the Lower 48, dry natural gas production is expected to average 920 million cubic feet per day for the year, up from 764 million cfd in 2000.
“We expect to record reserve replacement this year of between 170 and 220 percent of production at an F&D cost about between $7.30 per BOE and $5.60 per BOE,” Williamson said.
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