Newspaper article THE JOURNAL RECORD

ARCO Replaces 164 Percent of Its `97 Worldwide Production

Newspaper article THE JOURNAL RECORD

ARCO Replaces 164 Percent of Its `97 Worldwide Production

Article excerpt

LOS ANGELES (JR) -- Arco announced Thursday that it replaced 164 percent of its 1997 worldwide oil and gas production with new reserves, adding 600 million barrels of oil equivalent at an average cost of $4.45 per barrel.

Arco replaced 133 percent of its reserves in 1996.

"This reserve replacement illustrates the outstanding performance of our upstream businesses," said Arco Chairman and Chief Executive Officer Mike R. Bowlin. "It is even more exciting because all of our major oil and gas operations contributed to the total, ranging from 318 percent replacement in our international growth business to 100 percent replacement from our current major producing area in Alaska. And we have significant projects in the pipeline which will provide reserves in the future. "I am also pleased that exploration discoveries and extensions added 253 million barrels of oil equivalent reserves, or 69 percent of 1997 production. This 1997 performance is very good compared to our peer group's results over the past five years." Arco has a goal of average annual reserve replacement of over 120 percent along with 4 percent to 5 percent average yearly production growth in the future. Not included in the 1997 reserve replacement is one of the largest discoveries in Arco's history -- Tangguh in Irian Jaya, Indonesia -- which contains certified proved and probable reserves of 13 trillion cubic feet (TCF) and 6.5 TCF of possible gas reserves, or 3.3 billion barrels of oil equivalent. Also not included are reserves of 450 million to 500 million barrels of oil expected to be added over the next few years from previously disclosed resources in Venezuela. Internationally, Arco added 264 million barrels of oil equivalent to its reserves for a 318 percent reserves replacement, in line with the goal to substantially increase its overseas oil and gas business. The largest addition, 100 million barrels, came from Arco's 27.5 percent interest in the Shearwater gas condensate field plus small interests in the adjacent Elgin and Franklin fields in the United Kingdom North Sea. …

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