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EXHIBIT 99.1
October 24, 2000
Denver, Colorado
FOR IMMEDIATE RELEASE
PRIMA ENERGY CORPORATION ISSUES OPERATIONS UPDATE
Prima Energy Corporation ("Prima" or "the Company"), an independent oil
and gas company based in Denver, Colorado, today released the following update
on its operating activities.
DENVER BASIN
Prima continues to develop its core property in the Wattenberg Field
area of the Denver Basin, where the Company operates 360 wells. After drilling
and completing ten Codell wells in the first half of 2000, Prima drilled nine
Codell wells during the third quarter, of which eight are currently producing.
The pay zone was faulted out in the ninth well, which has been temporarily
abandoned. Two additional Codell wells have been drilled to date in the fourth
quarter of 2000, with another ten wells planned by year-end. Prima estimates
each Codell well to develop average net reserves of 300 MMcfe at a cost of
$270,000. The Company has over 200 potential Codell drilling locations in
inventory.
Prima has also continued its successful fracture re-stimulation
("refrac") program in the Wattenberg area. After refrac'ing 34 Codell wells in
the first half of 2000, Prima refrac'd 12 Codell wells in the third quarter of
2000, all of which are currently producing. Three additional Codell wells have
been refrac'd to date in the fourth quarter, with another 12 planned by
year-end. Prima estimates each Codell refrac to develop average net reserves of
150 MMcfe at a cost of $115,000. The Company estimates a remaining inventory of
approximately 125 Codell refrac opportunities. In addition to the refrac
program, Prima recompleted new producing intervals in five wells during the
first three quarters of 2000, with another three recompletions planned through
year-end.
Mike Kennedy, Prima's Executive Vice President and Wattenberg Team
Leader, stated "We continue to be pleased with the results of our drilling,
refrac and recompletion programs in the Wattenberg Field area. The results are
meeting our expectations and with current favorable commodity prices, the
returns are outstanding."
POWDER RIVER BASIN
Prima reported that it has now drilled 156 shallow coalbed methane
("CBM") wells in the Powder River Basin of northeast Wyoming, with 138 having
been drilled this year. Of this total, 109 wells have been drilled at the
Company's Stone's Throw Prospect, located approximately 30 miles north of
Gillette, Wyoming. The first phase of the gathering system, which is owned and
operated by Arete Gathering Company (a wholly owned subsidiary of Prima), has
been completed. Nine CBM wells were placed on production October 9, 2000 and are
currently producing approximately 390 Mcf of natural gas per day through
temporary compression facilities into the sales line. Several additional wells
will begin pumping in the next few days as downhole pumps are installed and well
stimulations are completed. The Company expects production to increase as
flowing pressures are reduced at the well heads, compression facilities are
optimized, and the wells continue to dewater. The Company expects to take
delivery and install three additional screw compressors and a 7,000 Mcf per day
reciprocating compressor over the next several weeks. Concurrently, the Company
is installing production and gathering facilities to hook-up approximately sixty
additional wells at Stone's Throw. Mike McGuire, Prima's Executive Vice
President and CBM Team Leader
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stated, "Our objective is to have all the permanent facilities installed with
approximately eighty wells tied in by the end of December. Although we expect
early gas production from many of the wells, the overall project is likely to
take several months to dewater." Arete's system in this area is designed to
include a second 7,000 Mcf per day reciprocating compressor so that when all
facilities are installed and operational, the Company will have a system capable
of handling 14,000 Mcf per day at Stone's Throw.
John Carpenter, Prima's Vice-President of Marketing stated, "We have
agreements in place that provide for the sale of all of our Stone's Throw gas at
the inlet of Arete's compressors. The purchaser has contracted with Arete for
gathering and compression and owns transport on the high-pressure header systems
to the Rockport Hub near Cheyenne, Wyoming. Prima's wellhead price will be
approximately 80(cent) under the Rockport Index, with Arete receiving a 38(cent)
per Mcf fee for gathering and compression."
Prima further stated that it has now drilled 28 CBM wells at its
Kingsbury project in the Powder River Basin. Planning and negotiations are
underway for gathering, compressing, and marketing gas from this project area.
The Company stated that it does not expect the wells to be pumping and tied into
a sales line until the first quarter of 2001.
Finally, Prima stated that it expects to drill three Muddy Formation
wells in the Powder River Basin by year-end. Prima will have a 50% working
interest in these wells, with average projected depths of approximately 9,500
feet. The Company's share of the costs for drilling and completing these three
wells, assuming all three are completed, is approximately $1,300,000. The first
of these wells, the Cedar Draw Federal #2-31, was spud on October 21, 2000. This
well is an extension of Prima's successful Muddy Field development at Cedar
Draw, located in Campbell County, Wyoming.
EARNINGS RELEASE AND CONFERENCE CALL
Prima reported that it would release third quarter results on November
9, 2000. A conference call is scheduled for Monday, November 13, 2000, at 9:00
am Mountain Standard Time. Interested parties may access the call by dialing
1-800-210-9006, pass code number 626862. The playback of the call may be
accessed by dialing 1-888-203-1112, pass code number 626862 by noon on November
13th and will be available through midnight on November 17, 2000.
This press release contains "forward-looking statements" which are made pursuant
to the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These statements include, without limitation, statements relating to
capital expenditures, continued volatility of oil and natural gas prices, future
drilling plans and other such matters. The words "estimate," "plan" or "expect"
and similar expressions identify forward-looking statements. Such statements are
based on certain assumptions and analyses made by the Company in light of its
experience and its perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate in the
circumstances. Prima does not undertake to update, revise or correct any of the
forward-looking information. Factors that could cause actual results to differ
materially from the Company's expectations expressed in the forward-looking
statements include, but are not limited to, the following: industry conditions;
volatility of oil and natural gas prices; hedging activities; operational risks
(such as blowouts, fires and loss of production); insurance coverage
limitations; potential liability imposed by government regulation (including
environmental regulation); the need to develop and replace its oil and natural
gas reserves; the substantial capital expenditures required to fund its
operations; risks related to exploration and developmental drilling; and
uncertainties about oil and natural gas reserve estimates. For a more complete
explanation of these factors, see "Cautionary Statement for the Purposes of the
'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of
1995" included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999, beginning on page 17.
NASDAQ SYMBOL: PENG
Contacts: Richard H. Lewis, President
Michael J. McGuire, Executive Vice President, Exploration
Michael R. Kennedy, Executive Vice President, Corporate Development
Telephone Number: (303) 297-2100
Website: www.primaenergy.com
