October 28, 2005
RICHMOND, Va. – Dominion (NYSE: D) updated today, as a result of recent comments by Murphy Oil Corp. (NYSE: MUR), activities at its Front Runner field in the deep water Gulf of Mexico. Gross production is currently approximately 33,000 barrels of oil equivalent per day from five wells. Completion operations are underway on a sixth well after which two risers will be run and the final two well completions made. These operations are scheduled to be finalized during the second quarter of 2006.
Duane Radtke, president and CEO of Dominion Exploration and Production, said:
“We are very enthusiastic about our Front Runner properties. While three of the wells have performed below our initial models, our reserve estimates are appropriate and we will recover the full volumes albeit over a longer period of time. Front Runner remains among our key assets and will yield significant cash flow to Dominion over the next 15 years.”
The update in Dominion’s outlook for Front Runner will not result in a revision to the company’s forecast of 5 to 6 percent average annual growth over the original estimate of its 2005 natural gas and oil production.
Dominion also does not expect a revision to the company’s proved reserves as a result of this update. Dominion has replaced approximately 179 percent of its production during the nine months ended September 30, 2005.
Dominion owns a 37.5 percent interest in Front Runner, with its partners Murphy Oil Corp. owning 37.5 percent and Spinnaker Exploration Co. (NYSE: SKE) owning 25 percent. Murphy is the operator of Front Runner.
Dominion is one of the nation's largest producers of energy, with an energy portfolio of about 28,100 megawatts of generation, about 6 trillion cubic feet equivalent of proved natural gas reserves and 7,900 miles of natural gas transmission pipeline. Dominion also operates the nation's largest underground natural gas storage system, with more than 965 billion cubic feet of storage capacity and serves retail energy customers in nine states. For more information about Dominion, visit the company's Web site at www.dom.com.
This release contains forward-looking statements including our expectations for 2005 financial results that are subject to various risks and uncertainties. Discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely, such as the timing of the closing dates of acquisitions, realization of and timing of the receipt of expected business interruption insurance proceeds, estimates of future market conditions, estimates of proved and unproved reserves, the company’s ability to meet its production forecasts, the behavior of other market participants, and the effects of hurricanes on our operations, oil and gas production and commodity prices. Other factors include, but are not limited to, weather conditions, governmental regulations, economic conditions in the company's service area, fluctuations in energy-related commodity prices, including changes in the cost of fuel for our regulated electric business, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated gas and electric rates recoverable by Dominion, the transfer of control over electric transmission facilities to a regional transmission organization, changes to rating agency requirements and ratings, changing financial accounting standards, trading counter-party credit risks, risks related to energy trading and marketing, and other uncertainties. Other risk factors are detailed from time to time in Dominion’s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission.