El Paso trims proven reserves 41 pct

El Paso, which had warned investors earlier this month it would trim its estimates, cut its end-2003 estimates of proven reserves by 1.824 trillion cubic feet (tcf) of natural gas equivalent to 2.635 tcf equivalent. Proven reserves are quantities of oil or gas that a company expects to be commercially recoverable from known fields from a given date. The company, which is the largest U.S. natural gas pipeline operator, also warned investors it expected more write-down charges in 2004 as natural gas prices weakened.

KEEPS OUTPUT GOALS

El Paso said its January production averaged about 960 million cubic feet equivalent (MMcfe) per day, and it expected to meet its goal for average 2004 production of 850 MMcfe to 950 MMcfe production range based on its capital expenditure plans.

The company would not trim its $850 million capital expenditure program for 2004, Foshee said, although it was reviewing its spending and reducing investments in areas such as south Texas. That was the region where reserves were trimmed the sharpest, followed by its coal bed methane operations and Gulf of Mexico production sites. El Paso's energy production is focused on natural gas, which generated about five times the revenue of the company's oil output for the first nine months of 2003.Production levels declined by 32 percent during that period, with drilling successes in about only one in five deep shelf wells