Venoco (VQ) Raises FY09 Production, Lowers OpEx Guidance
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Venoco, Inc. (NYSE: VQ) today raised its FY09 production guidance from 19,000 BOE/day to 20,250 BOE/day. The company also lowered its lease operating expenses guidance from $15 per BOE to $13.50 per BOE.
"The solid production and operating expense results we had in the first quarter are continuing so far this quarter," said Tim Marquez, Chairman and CEO, "so we believe it is an appropriate time to revise our annual guidance."
"We've had very good results from our workover program in the Sacramento Basin and we've also seen oil production continue to rise at our West Montalvo field," Mr. Marquez continued. "Our operating teams continue to focus on identifying and implementing opportunities to lower field-level expenses."
Guidance remains unchanged on G&A and DD&A expenses. The company also clarified that production and property taxes are expected to average $1.90 per BOE in 2009, regardless of commodity prices.
Second quarter production volumes are expected to be slightly lower than first quarter pro forma for the sale of the Hastings Complex. In the Sacramento Basin, Venoco had to shut-in a portion of its production for nearly six weeks in April and May due to a PG&E pipeline repair. The company has been able to return 100% of its wells to production and daily production rates in the Basin have returned to first quarter levels. The company estimates that the effect of the shut-in will be to reduce average daily production by approximately 500 BOE/d in the second quarter.
Venoco's acquisition of Aspen Exploration's assets in the Sacramento Basin was recently approved by Aspen shareholders. As a result, the acquisition is expected to close by the end of the second quarter. The Aspen assets will increase Venoco's leasehold primarily in the Greater Grimes area. Production volumes related to the acquisition are factored into the revised 2009 production guidance and are expected to contribute approximately 250 BOE/d for the full year.
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