Stone has been Focusing On Deepwater/ Gas to Seek Long Term Growth

Monday 12 March 2012, Amsterdam

Stone has been Focusing On Deepwater/ Gas to Seek Long Term Growth

Stone Energy has relied upon the GOM and deepwater shelf regions to boost its reserve base and support its overall long-term growth strategy. The company has 442,545 gross developed acres and 725,939 undeveloped acres in these regions, and Stone Energy aims to enhance its geographical footprint in these areas. The company is following an aggressive strategy of acquisition, exploration, and development of oil and gas assets, and is planning to utilize cash flow from producing GOM shelf assets in order to fund deep-water and deep gas projects. Aside from the cash produced from its GOM assets, the company has allocated subtotal capital expenditure for the development of deepwater and deep gas GOM projects. Stone Energy allocated around 44% of its capital expenditure in 2011 on its GOM shelf assets, including GOM Shelf P&A/facilities, GOM shelf recompilations /WO, and GOM shelf exploitation. A further 18% is allocated to deep gas and deepwater projects.

With the increase in capital allocation for deepwater and deep gas projects from 2010 to 2011, it is evident that Stone Energy has been supplementing GOM operations through an increased focus on deep gas and deepwater projects. The figure below shows the composition of the company’s capital expenditure during 2011.

See figure: Figure 1: Stone Energy Corporation, Capital Expenditure Allocation, 2011