As Stone Energy reported a net loss of US$8.4 million in Q3 2015, the company’s operations in the Gulf of Mexico are moving full steam ahead, with exception of the decision to shed a minority stake in one non-operated project, in addition to cutting some of its workforce in Q4.
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Image from Stone Energy. |
Stone reported an adjusted net income loss of $8.4 million on oil and natural gas revenues of $128.4 million.
With Stone’s salaries, general, and administration expenses taking a jump in Q3 to more than 20%, compared to Q3 2014, the company revealed that Q3’s severance costs and one-time charges came in at a total of $3.9 million, with the expectation to decrease staffing, compensation, and spending reductions in Q4.
“We have taken steps to reduce our overhead and operating costs, and expect to curtail capital spending in 2016 to more closely align with our cash flow projection,” David Welch, Stone chairman, president, and CEO said.
Daily production was recorded at 40,000 boe/d this period, an 18% drop from last quarter’s 49,000 boe/d.
Deepwater operations in the Gulf of Mexico include several positive notes including more production, completions, and new wells online. However, Stone has decided to sell its 10% non-operated interest in the Crown & Anchor prospect to an undisclosed third party, which encountered commercial hydrocarbons earlier this year.
"We are pleased with our third quarter progress as we brought the Cardona #6 well online and have increased production at the Cardona field to over 15,000 b/d. In late September, we began our completion operations at our Amethyst discovery and expect to have first production by the first quarter of 2016. We will next move the rig to our Cardona #7 development well and would expect to see production by the second quarter of 2016,” Welch said.
Cardona
The Cardona #6 well, located in Mississippi Canyon 29, has been tied into the existing Cardona subsea infrastructure, which flows into Stone's Pompano platform.
The field’s gross production, including #4, #5 and #6 wells, is currently flowing at approximately 15,000 boe/d. The company will begin drilling operations at the Cardona well #7 with the ENSCO 8503, once completion of the Amethyst prospect is finished. Drilling and completion are expected to take about two months, and will be followed by the connection and testing of the well.
The Cardona #7 well is an offset well to the existing TB-9 well in Mississippi Canyon Block 29 and the fourth well to be drilled in the Cardona development program. Production is expected to begin in Q2 2016.
Stone operates Cardona with a 65% interest. Partner Hunt Petroleum holds the remaining 35%.
Vernaccia
Stone Energy sold a portion of its interest in the Eni-operated Vernaccia exploration well, and now holds 4%working interest in the drilling cost of the well and will have an approximate 22% working interest ownership thereafter.
The well was spudded in September 2015, and is targeting the Miocene interval. The well is estimated to take three months to drill.
Amethyst
Stone’s 100% owned Amethyst, located in Mississippi Canyon 26, is undergoing completion operations using the ENSCO 8503.
The well wasmoored on location at the end of September 2015, and will be prepared for an initial production test prior to final flowline and umbilical hook up. Stone expects first production by Q1 2016 to its Pompano platform, located less than 5mi from the discovery.
Lamprey
The company’s 100% owned and operated Lamprey, located in Alaminos Canyon 943, is expected to spud in Q2 2016.
If the initial exploration well is successful, Stone says it plans to immediately drill an appraisal well. The initial exploration well is estimated to take two to three months to drill.
Pompano Platform
Stone’s Pompano platform rig development drilling programhas been secured and the company is mobilizing a platform rig, which is expected to commence late Q4 2015. The program is expected to consist of three to four development wells.
“Our Gulf of Mexico development projects are expected to give us year-over-year production growth as we continue navigating through this difficult pricing environment,” Welch said.
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