ARCO Replaces Production, Plans Capital Program for 2000

ARCO announced it replaced 129 percent of its consolidated worldwide oil and gas production in 1999, increasing its proved reserve base to 4.6 billion barrels of oil equivalent (BOE) at the end of 1999. At the same time, ARCO said its budget for 2000 anticipates about $2.6 billion in capital spending, down from $2.7 billion spent in 1999. "Our goal for the past four years has been to replace, on average, 120 percent of annual production, and the 1999 reserves replacement is right in line with that target. It also reflects that our focus has been ? and continues to be ? on operating ARCO as ARCO until we complete our planned merger with BP Amoco," Bowlin said. "As reported last month, we exceeded our cost reduction targets and made significant progress during 1999 in our portfolio realignment. All of that makes our reserves replacement even more significant." Starting 1999 with 4.5 billion BOE, the company produced and consumed 388 million barrels and sold 103 million barrels. ARCO more than offset those reductions by adding more than 600 million barrels through revisions, extensions and discoveries, improved recovery and purchases. ARCO plans to spend approximately $2.6 billion on additions to fixed assets in 2000, down from 1999 spending of $2.7 billion. Of the total $2.6 billion capital budget for 2000, ARCO plans to spend $2.15 billion on upstream investments and the remainder on the downstream. "This capital program again reflects ARCO's narrowing focus in international upstream operations," Bowlin said. Accordingly, $800 million of the upstream capital will be spent internationally while $1.4 billion will be spent on domestic upstream operations. The U.S. investments include $900 million for the Lower 48 program (including $850 million for Vastar), and $475 million in Alaska. Downstream investments include $425 million for refining and marketing and $25 million for other operations.