EXHIBIT 99.1
(PETROQUEST ENERGY, INC. LOGO)
NEWS RELEASE
For further information, contact: W. Todd Zehnder, Director - Corporate
Communications & Marketing
(337) 232-7028, www.petroquest.com
PETROQUEST ENERGY ANNOUNCES RECORD ANNUAL PRODUCTION; POSTS RECORD
PROVED OIL AND GAS RESERVES; EXPECTS SETTING ADDITIONAL 2004 RECORDS
FOR REVENUES, CASH FLOW AND EARNINGS
LAFAYETTE, LA - February 3, 2005 - PetroQuest Energy, Inc. (NASDAQ: PQUE)
announced today that it produced a Company-record 14.2 Bcfe during the year
ended December 31, 2004. This represents a 47% increase over the 9.6 Bcfe
produced in 2003. Since its merger in 1998, production for PetroQuest has risen
43% on a compounded annual rate. Approximately 65% of 2004's production was
natural gas.
The Company ended 2004 with 101.4 Bcfe of proved oil and gas reserves, a new
Company record. Approximately 78% of the proved reserves were natural gas, and
45% was located in long-lived basins. This represents a 22% increase
year-to-year for proved reserves and a 40% compound annual growth rate since the
1998 merger.
Based on the higher 2004 production rate, PetroQuest expects to post
company-record revenues, cash flows and net income for 2004. A conference call
with investors and analysts is scheduled for February 17, 2005.
RESERVES
The following sets forth an analysis of the Company's estimated quantities of
net proved oil and gas reserves (oil converted to MMcfe at six MMcf per MBbl):
<Table>
<Caption>
Natural Gas
Oil and NGL
(MBbls) (MMcfe) (MMcfe)
------------- ------------- -------------
Proved reserves as of December 31, 2003 4,245 57,793 83,263
Revisions of previous estimates (396) 3,463 1,087
Extensions, discoveries and other additions 559 14,574 17,928
Purchase of producing properties 124 12,544 13,288
Sale of producing properties -- -- --
Production (818) (9,305) (14,213)
------------- ------------- -------------
Proved reserves as of December 31, 2004 3,714 79,069 101,353
============= ============= =============
</Table>
At December 31, 2004, the Company's independent petroleum engineers estimated
the net present value, excluding income taxes, of these reserves was $326
million, using prices ($5.82 per Mcfe and $43.85 per barrel) in effect as of
year-end 2004 and discounted 10%. This compares to $214 million at December 31,
2003 using prices in effect ($5.59 per Mcfe and $32.24 per barrel) as of
year-end 2003 and discounted 10%. These amounts include a reduction for
estimated plugging and abandonment costs that are also reflected as a liability
on PetroQuest's balance sheet at December 31, 2004 and 2003, in accordance with
Statement of Financial Accounting Standards No. 143.
DRILLING UPDATE
The Company had a 97% drilling success rate during 2004 with 17 exploration and
15 development wells.
Drilling activity during the fourth quarter of 2004 included successful
discoveries at the Company's Jambalaya and Bisque Prospects in the Gulf Coast
region, two wells in East Texas and six horizontal coalbed methane wells in the
Arkoma Basin.
PetroQuest drilled its Jambalaya Prospect to a total depth of 13,500 feet,
logging 43 feet total vertical depth (TVD) of net productive sands. The well is
expected to begin producing in mid-February at a gross rate of approximately
6,000 Mcfe per day. PetroQuest has an approximate 30% net revenue interest (NRI)
in the well.
The Company's Bisque Prospect was drilled to a total depth of 14,800 feet
encountering approximately 153 feet TVD of net productive sands. This well is
also expected to begin producing in mid-February at a gross rate of
approximately 15,000 Mcfe per day. As of year-end, PetroQuest had not
encountered the primary objective of the Bisque Prospect; therefore
approximately 74 feet TVD of net productive sands were not included in the 2004
year-end reserve amounts. PetroQuest owns an approximate 35% NRI in the well.
PetroQuest operated the drilling and completion of its first two 100% working
interest (82% NRI) wells in its Southeast Carthage Field encountering productive
sands in the Cotton Valley and Travis Peak formations. These wells are in the
early stages of production and are expected to average approximately 1,000 Mcfe
per day each. Subsequent to year-end, PetroQuest drilled and is completing its
third well in the Southeast Carthage Field, and also encountered productive
sands in the Cotton Valley and Travis Peak formations.
The drilling program in the Arkoma Basin continued in the fourth quarter with
six additional horizontal coalbed methane wells drilled and completed. A total
of 16 wells were drilled and completed by PetroQuest in the basin during 2004 -
all of which were successful. Once the wells are completed, a dewatering period
begins which is estimated to take approximately 12 weeks. The Company will
capture gas sales throughout the dewatering phase. PetroQuest estimates
production will average approximately 150 Mcf to 200 Mcf per day per well once
fully dewatered. PetroQuest owns an average approximate 60% NRI in these wells.
The Company is currently drilling its Cracklin Prospect (48% working interest)
in South Louisiana. Drilling continues in the Company's 10 to 12 well 2005
program in Southeast Carthage Field and the 40+ 2005 well program in the Arkoma
Basin. Current plans are to spud the File Prospect (operated, 50% working
interest) in South Louisiana within the next two weeks.
The Company's drilling capital budget for 2005 is approximately $70 to $80
million depending on commodity prices, drilling success and related completion
and facility costs.
MANAGEMENT'S COMMENT
"The successful operating results coupled with higher product prices of 2004
have positioned PetroQuest to significantly increase its drilling and
development activities to a record level. In 2005, we anticipate drilling 74
gross (42 net) wells from our existing project inventory utilizing our cash
flows and existing credit facilities. This compares to 33 gross (19 net) wells
during 2004, or a 125% increase in the number of wells budgeted to drill during
2005," said Charles T. Goodson, Chairman, Chief Executive Officer and President.
"Consistent with our business plan to diversify the Company into longer-lived
basins, we plan to drill more wells during 2005 than during the previous four
years combined."
ABOUT THE COMPANY
PetroQuest Energy, Inc. is an independent energy company engaged in the
exploration, development, acquisition and production of oil and natural gas
reserves in the Arkoma Basin, East Texas, South Louisiana and the shallow waters
of the Gulf of Mexico. PetroQuest trades on the NASDAQ National Market under the
ticker PQUE.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
are subject to certain risks, trends and uncertainties that could cause actual
results to differ materially from those projected. Among those risks, trends and
uncertainties are our estimate of the sufficiency of our existing capital
sources, our ability to raise additional capital to fund cash requirements for
future operations, the uncertainties involved in estimating quantities of proved
oil and natural gas reserves, in prospect development and property acquisitions
and in projecting future rates of production, the timing of development
expenditures and drilling of wells, and the operating hazards attendant to the
oil and gas business. In particular, careful consideration should be given to
cautionary statements made in the various reports PetroQuest has filed with the
Securities and Exchange Commission. PetroQuest undertakes no duty to update or
revise these forward-looking statements.