Westport Resources Corp., Denver, engages in oil and natural gas exploitation, acquisition and exploration in the Gulf of Mexico, Rocky Mountains, West Texas, Gulf Coast, and US Midcontinent.
Its portfolio is balanced with lower-risk onshore reserves and higher-margin offshore reserves. Westport maintains offices in Dallas and Houston.
Having gone public in October 2000, Westport allocates about 70% of its capital budget to exploitation activities and 30% to exploration projects. The company budgeted $170 million for the 2002 capital program, with half of the money allocated to the Gulf of Mexico division.
"Last year was a significant year for Westport. In our first full year as a public company, we completed a major merger, recapitalized the combined company, and gained critical scale to continue building on our growth record," CEO and Chairman Donald D. Wolf said in a letter to shareholders.
He referred to the merger with Belco Oil & Gas Corp., which doubled Westport's reserves, increased production by 81%, and allowed Westport to organize its operations into three independent, regional divisions.
Mergers
The Belco merger gave Westport "greater balance and flexibility in our corporate strategy of acquisition and exploitation complemented by targeted exploration," Wolf said.
"We concentrate on carefully allocating our capital through the cycles and believe now is the time to compete for acquisition opportunities focused in our core producing areas," Wolf said.
Westport's strategy is adding to reserves, diversifying its risk profile, and expanding investment opportunities through lower-risk exploitation projects and acquisitions. Westport also believes in drilling potentially higher-impact prospects to maintain significant growth potential.
As of June 30, Westport had 980 bcfe of proved reserves, of which 50% was gas. Its second quarter 2002 production was 364 MMcfed, of which 62% was gas.
Westport invested $1.2 billion during 1995-2001 on both property and corporate transactions. The company has a drilling inventory of 1,000 exploitation drilling opportunities and 400 bcfe of probable reserves. It operates 70% of the net present value of its reserves.
Divisions
Westport concentrates its activity on the northern, southern, and Gulf of Mexico divisions.
The northern division includes properties in the Rocky Mountains, principally in North Dakota and Wyoming. It has 270 proven undeveloped, possible, and probable locations of which 185 are in the Greater Green River basin-Moxa arch area and 50 are in the Williston basin.
Westport's strategy in the northern division is to develop lower-risk opportunities; exploit infill, horizontal, and secondary and tertiary recovery opportunities on existing properties; and make tactical acquisitions to enhance existing operations.
On Mar. 1, Westport bought producing oil and gas properties in the Williston basin in North Dakota and Montana for $38 million. Net production from the properties is expected to average 13.9 MMcfed in 2002.
The southern division includes properties in Oklahoma, Texas, and Louisiana. The division has 700 proven undeveloped, possible, and probable locations. These include 190 locations in the Hosston-Cotton Valley area, 250 waterflood infill locations, and 100 locations in the Austin chalk trend in the Gulf Coast region.
The Gulf of Mexico division includes Westport's properties off Texas and Louisiana. The division has 20 proven undeveloped, possible, and probable locations. Westport has under license 3D seismic data covering 18,000 sq miles and 2D seismic data covering 150,000 line-miles. In 2001, it had discoveries on 11 blocks and drilled 9 development wells in the Gulf of Mexico with a drilling success rate of 56%.
"We seek exploration plays with geological and geophysical characteristics similar to producing properties in our core areas in order to leverage our technical and operational expertise," Westport said.
"Last year was a significant year for Westport. In our first full year as a public company, we completed a major merger, recapitalized the combined company, and gained critical scale to continue building on our growth record." —Westport Resources Corp. Chairman and CEO Donald D. Wolf
