EXHIBIT 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
BRIGHAM
EXPLORATION COMPANY
BRIGHAM EXPLORATION REPORTS SUCCESS IN SOUTH TEXAS DRILLING PROGRAM AND
REAFFIRMS GUIDANCE FOR THIRD QUARTER 2001
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Austin, TX -- (Business Wire) - October 19, 2001 -- Brigham Exploration
Company (NASDAQ:BEXP) today announced its fifth successful development well at
Home Run Field and the spud of its first development well at Triple Crown Field.
The Company also announced its fifth Frio discovery this year, in Brazoria
County, Texas. Brigham also provided an update on completion operations for
wells drilled late in the second quarter and reaffirmed its original guidance
for third quarter financial results.
HOME RUN FIELD, BROOKS COUNTY, TEXAS
Brigham is currently completing its fifth successive well since the
discovery of the Home Run Field in late 1999. The Sullivan C-27 (34% working
interest, 25% net revenue interest) encountered pay comparable to the previously
drilled Sullivan C-25 well, which began producing to sales in March 2001 at an
initial rate of 12.1 MMcfe per day. Completion operations on the Sullivan C-27
are underway, with an initial test of 4.6 MMcfe per day with flowing tubing
pressure of 7,160 psi following fracture stimulation. Brigham plans to
perforate and fracture stimulate four additional Lower Vicksburg zones, all of
which should subsequently be commingled and producing to sales by November 2001.
Also in the Home Run Field, and as previously announced, Brigham retained a
34% working interest and 25% net revenue interest in the successful drilling of
the Palmer State #5. This well, like Brigham's new Sullivan C-27 well,
encountered pay intervals comparable to the Sullivan C-25 well. Subsequent to
fracture stimulation, Brigham's initial completion tested at an estimated 1.6
MMcf of natural gas per day with flowing tubing pressure of 5,400 psi. However,
surface production facilities subsequently plugged with large pieces of
formation and steel casing fragments. Repeated attempts to restore the well to
production have been unsuccessful. Brigham believes that the well's problems
were created by a poor cement job caused by a casing failure during cementing
operations. As a result, Brigham is currently pursuing compensation for losses,
and is considering its options for developing the associated reserves, including
the possible drilling of a replacement well some time in the near future. In
addition, Brigham expects to spud its sixth development in Home Run Field in the
fourth quarter.
TRIPLE CROWN FIELD, BROOKS COUNTY, TEXAS
As disclosed in Brigham's press release of August 7, the Company has
retained a 50% working and 37.5% net revenue interest in the Dawson #1 field
discovery well, which encountered approximately 174 feet of net pay in seven
sand intervals. Given the volume of apparent pay in the well, completion plans
for the discovery were similar to the procedures utilized to date in completing
Lower Vicksburg sand intervals in the Company's Home Run Field. The Company's
plans included the sequential perforation and fracture stimulation of each of
the seven intervals, all of which were to be subsequently commingled. Completion
operations began in early August in the Lower Vicksburg. Production tests from
three Lower Vicksburg intervals ranged from 300 Mcf of natural gas per day with
flowing tubing pressure of 1,000 psi to 3.6 MMcf of natural gas and 54 barrels
of condensate per day with flowing tubing pressure of 5,800 psi.
Subsequent to temporary abandonment of perforations in the Lower Vicksburg,
Brigham continued its testing of the Dawson #1 in the "Loma Blanca" section of
the Upper Vicksburg formation. The "Loma Blanca" initially tested 2.3 MMcf of
natural gas per day with flowing tubing pressure of 7,320 psi. Brigham's
interpretation of wireline logs and drilling shows indicates that the highest
production rates in the Dawson #1 well should be achieved by producing three
Upper Vicksburg "9800" sand lobes (the "A", "B" and "C"). However, subsequent to
fracture stimulation of both the "B" and "C" zones, the well tested both natural
gas and significant quantities of formation sand. The Company currently plans
to abandon all existing perforations and then perforate and stimulate the 9800
"A" zone, utilizing a fracture stimulation and completion technique designed to
limit production of formation sand. If successful, Brigham believes this
procedure should enable recovery of reserves associated with the deeper "B" and
"C" reservoirs.
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Brigham is currently operating the drilling of its first development well
offsetting the Dawson #1 discovery. The Sullivan #1 well is currently drilling
at a depth of approximately 10,700 feet, and is planned for a total depth of
13,250 feet. Brigham has retained a 50% working interest and 37.5% net revenue
interest in this well, which is located approximately 2,400 feet from the Dawson
#1 discovery well. If successful, the Sullivan #1 should begin contributing
production volumes late in the fourth quarter 2001.
FRIO EXPLORATION, BRAZORIA & MATAGORDA COUNTIES, TEXAS
During the third quarter, Brigham operated the drilling of its fifth recent
successful 3-D delineated Frio discovery, in Brazoria County, Texas. The
Sebesta Cloud #1 (31% working interest, 24% net revenue interest) logged an
apparent 58 feet of net pay in multiple Frio sands. Other participants in this
well include Royale Energy (NASDAQ: ROYL) with a 50% working interest. Brigham
has perforated and is currently testing the well at approximately 2.0 MMcf of
natural gas and 75 barrels of condensate per day with 2,000 psi flowing tubing
pressure. Additional sands remain untested which could be added to the current
completion at a later date. The Company expects to begin producing this well to
sales later this month.
As previously announced, during the second quarter Brigham successfully
drilled its fourth consecutive Frio discovery in Matagorda County, Texas. The
Company retained a 20% working and 15% net revenue interest in the well, which
began producing to sales in late August. The well is currently producing
approximately 6.5 MMcfe per day, with flowing tubing pressure of 7,000 psi.
Depending upon performance, production rates could be increased substantially
over the next sixty days.
Later this month, Brigham plans to spud a Frio bright spot test targeting a
large structure with multiple potential pay sands and reserve potential of over
50 Bcfe. Brigham will retain a 41% working and 31% net revenue interest in the
well, which if successful, could be producing to sales late in the fourth
quarter. The Company continues to generate high quality Frio opportunities,
several of which should be drilled in 2002.
SPRINGER EXPLORATION, BLAINE COUNTY, OKLAHOMA
Brigham has successfully completed two of three recent Springer wells in
the Anadarko Basin. Both completions are offsets to a Brigham first quarter
2001 discovery, which has produced approximately 1.4 Bcfe to date and is
currently producing 7.1 MMcfe per day. The first offset began producing to
sales in mid September, and is currently producing 3.3 MMcfe per day. The second
offset began producing to sales in late September, and is currently producing
2.1 MMcfe per day. The Company plans to fracture stimulate one or both
producers some time in the fourth quarter.
MANAGEMENT COMMENTS
Bud Brigham, the Company's Chairman, CEO and President, stated, "We
continue to be very excited about the success of our 2001 drilling program.
Thus far in 2001, we've made a major field discovery and have generated
substantial reserve additions for our Company. However, we've been frustrated
by recent delays in bringing several of our more significant discoveries to
sales. This frustration is due, in part, to delays related to service
providers, but also due to the unanticipated mechanical and formation problems
we've encountered in completing the Palmer #5 and Dawson #1 wells. As a result,
these two wells have yet to materially impact our Company's production volumes."
Bud Brigham further stated, "Given the trend towards lower service and
supply costs, our Company will focus intensely on continuing to optimize our
procedures for cost effectively drilling and completing the prolific Triple
Crown and Home Run Field reservoirs. Given the reserve potential of these
fields, and the comparable untested fault blocks that are adjacent to these
fields, we believe that our efforts in this area will provide substantial value
added growth in production volumes and cash flow for several years to come."
THIRD QUARTER GUIDANCE, THIRD QUARTER 2001 EARNINGS RELEASE AND CONFERENCE CALL
INFORMATION
The following forecasts and estimates of Brigham's third quarter 2001
results are forward looking statements subject to the risks and uncertainties
identified in the "Forward Looking Statements Disclosure" at the end of this
release.
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In Brigham's press release of August 8, guidance was provided for third
quarter financial results. In that statement, revenue was forecasted between
$8.5 and $9.0 million and EBITDA between $6.2 to $6.7 million. Based upon
information currently available, revenue for the quarter is expected to equal
$8.6 million while EBITDA is forecasted to be approximately $6.4 million, both
within the range of original estimates. Brigham currently expects third quarter
2001 production volumes to average 29 MMcfe per day (70% natural gas), or
roughly 42% greater than production levels recorded in the third quarter of
2000. For the third quarter 2001, lease operating expenses are projected to be
$0.32 per Mcfe, production taxes are projected to be 4.5% of pre-hedge oil and
gas revenues, and net general and administrative expenses are projected to be
$930,000 ($0.36 per Mcfe).
Guidance for the fourth quarter 2001 will accompany Brigham's press release
regarding its third quarter 2001 financial results planned for after the close
of market trading on Tuesday, November 6th. Brigham's management will host a
conference call to discuss Brigham's operational and financial results for the
third quarter ended September 30, 2001 with investors, analysts and other
interested parties on Wednesday, November 7th at 9:00 am Central time. To
participate in the call, please dial 800-355-7995 and ask for the Brigham
Exploration conference call (conference reservation number 19885151). A
telephone recording of the conference call will be available to interested
parties approximately one hour after the call is completed through 5:00 p.m.
Central time on November 13, 2001. To access the recording, please dial
800-633-8284. In addition, a live and archived web cast of the conference call
will be available over the Internet at either www.bexp3d.com or
www.streetevents.com.
ABOUT BRIGHAM EXPLORATION
Brigham Exploration Company is a leading independent exploration and
production company that applies 3-D seismic imaging and other advanced
technologies to systematically explore and develop onshore domestic natural gas
and oil provinces. For more information about Brigham Exploration, please visit
our website at www.bexp3d.com or contact Investor Relations at 512-427-3444.
FORWARD LOOKING STATEMENTS DISCLOSURE
Except for the historical information contained herein, the matters
discussed in this news release are forward looking statements that are based
upon current expectations. Important factors that could cause actual results to
differ materially from those in the forward looking statements include risks
inherent in exploratory drilling activities, the timing and extent of changes in
commodity prices, unforeseen engineering and mechanical or technological
difficulties in drilling wells, availability of drilling rigs, land issues,
federal and state regulatory developments and other risks more fully described
in the company's filings with the Securities and Exchange Commission.
Contact: John Turner, Manager of Finance and Investor Relations
(512) 427-3300 / investor@bexp3d.com
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