Forecast - Production | Contract Awarded | Incidents / Accidents

Stone's Q2 Production Exceeds Guidance at 29 MBOE/d

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   |    Tuesday,July 26,2016

Stone Energy Corporation announced estimated production for the quarter ended June 30, 2016 of approximately 29 MBoe (174 MMcfe) per day, consisting of approximately 59% oil, 9% natural gas liquids and 32% natural gas.

This rate is slightly above the upper end of guidance for the quarter. These production volumes included approximately 23 MBoe (138 MMcfe) per day from the Gulf of Mexico and 6 MBoe (36 MMcfe) per day from Appalachia. Appalachian volumes included 21 MMcfe per day from the Heather and Buddy fields, 11 MMcfe per day of intermittent production from the Mary field and 4 MMcfe per day attributed to a one-time adjustment of previous working interest.

As reported on June 29, 2016, Stone entered into an interim gas gathering and processing agreement with Williams at the Mary field in Appalachia. Production from the Mary field has been substantially shut in since September 2015, except for intermittent production. The initial term of the interim agreement runs through August 31, 2016, and it continues on a month to month basis thereafter unless terminated by either party. Production from the Mary field resumed in late June and has averaged over 75 MMcfe per day in July. We expect production rates from the Mary field to reach over 125 MMcfe per day in August. Currently, 57 wells representing over 60 MMcfe per day in potential volume remain shut in due to downstream liquids-handling capacity constraints. We expect most of this production to come online in late July and August.

On June 28, 2016, the Enterprise Products Partners LP gas processing plant in Pascagoula, Mississippi experienced an explosion that shut down the facility, which is not expected to be back in operation for months. Although Stone has no direct interest in the plant, it processed approximately 20-25 MMcf per day (gross) of gas produced from the Pompano platform. This gas has been either shut in or re-injected since the incident, and the gas curtailment has restricted oil flow from the Pompano platform to approximately 70% of previous production rates. Prior to this curtailment, second quarter 2016 net production from the Pompano platform averaged approximately 11 MBbls of oil per day and approximately 21 MMcfe of gas and NGLs per day. On July 21, 2016, we negotiated an agreement to flow gas to an alternate market and are currently producing oil and gas from the Pompano platform at volumes similar to second quarter production rates. Our arrangement does not guarantee available capacity, so gas re-injection remains a fallback option if needed. As previously reported, production from our Amethyst well was shut in during late April to allow for a technical evaluation. We have delayed intervention activities at Amethyst until we can secure a reliable gas sales market for the Pompano facility.