NEWS

Stone Energy Corporation said it was the highest bidder for 11 offshore US Gulf of Mexico blocks, in the Outer Continental Shelf Lease Sale 227. The sale was carried out by the Bureau of Ocean Energy Management in New Orleans on 20-Mar-2013.

The lease acquisitions, with total expenditure of about $38 million, are expected to add ~62,732 acres (gross) and 46,796 acres (net) to Stone's lease-hold inventory.

Stone Energy Profit Dips 21% in 2013 on Higher Expenses

Stone Energy reported a 21% YoY fall in 2013 net profit to $118 million. The lower profit was caused by higher operating expenses, especially transportation, processing and gathering costs.

2013 highlights

• Revenue of $974 million, marginally higher than a year prior
• Gas revenue of $191 million, up 41% YoY; offset by lower oil revenue of $715 million, down 6% YoY
• Operating expenses of $732 million, up 6% YoY
• Transportation, processing and gathering expenses costs of $42 million, nearly double the value in 2012
• Total production of 46 MBOE (50% liquids), up 10% YoY; attributed to an 18% YoY increase in gas production, especially from the Marcellus play

Stone CEO David H. Welch stated: “We look forward to building on these accomplishments with a continuing deep water and deep gas program in the Gulf of Mexico.  We will also continue our low risk Marcellus shale drilling program and expect to augment the program with a test of the prospective Utica shale, which substantially underlies our existing acreage position in Appalachia.”

View Stone press release

Stone Energy announced pricing of its underwritten public offering of 5 million shares of its common stock at $41 per share. The offering is expected to close on or about 14-May-2014.

The underwriters will have a 30-day option to purchase 750,000 additional shares of its common stock. 

The net proceeds from the offering will be used for general corporate purposes, including development of the Amethyst discovery, drilling of a second well at Cardona South, development of the Utica shale acreage and acquisition of additional Appalachian acreage.

View Stone Energy press release  

Source: Stone Energy Johnson Rice Energy Conference

Stone Energy posted Q3-2013 profit of $36.1 million, up 53% YoY, due to increased gas production from its Marcellus shale assets.

Q3-2013 Highlights

• Total production of 49.4 MBOE/d (49% liquids), up 18% YoY, on strong gas production
• Gas production of 151 MMcf/d, up 31% YoY, with Marcellus supplying 82 MMcf/d
• Revenue of $256 million, up 13% YoY, boosted by gas revenue of $53 million, up 55% YoY
• Capex of $162 million, including $24 million spent on well plugging and abandonment

Outlook

• Marcellus Shale: 11 additional wells planned in Mary field for Q4-2013; Upper Devonian horizontal well, drilled in Q2, to be tested in Q4
• Conventional Shelf: Taildancer prospect well, at Ship Shoal 113, to be online in Q4-2013
• Mississippi Canyon (MC): Diamond Ocean Victory rig being mobilized to drill wholly-owned and operated Amethyst exploration well (MC26); Cardona prospect well (MC29) and Mica Deep exploration well (MC211) to spud in Q1-2014

View Stone press release

View Stone presentation

Stone Energy announced that its estimated year-end 2012 proved reserves grew 28% YoY to 129 MMBOE or 773 Bcfe (49% liquids):

• Proved developed reserves of 73 MMBOE (52% liquids) and proved undeveloped reserves of 56 MMBOE (45% liquids)
• Changes over 2011 came from production of 15 MMBOE, drilling additions/extensions of 30 MMBOE, net upward revisions of 7 MMBOE and net acquisitions of 6 MMBOE
• Estimated 2P reserves: 59 MMBOE; 3P reserves: 167 MMBOE
• 1P reserves addition replaced ~288% of production in 2012

David Welch, Chairman, President and CEO at Stone, said, "Our reserves mix is now 44% Appalachia, 34% Deep Water, and 22% Conventional Shelf/Deep Gas, ...  Our reserve life has grown from 5.2 years in 2009 to approximately 8.5 years currently."