Goodrich Petroleum Corporation GDP (the "Company") today announced its preliminary 2015 capital expenditure
budget and operational update.
2015 CAPITAL EXPENDITURE BUDGET
The Company today announced a preliminary capital expenditure budget for 2015
of $150 – 200 million, with flexibility to accelerate with improvement in oil
prices and the monetization of certain assets described below. Oil-directed
capital is estimated to be in excess of 95% of the total, with the entire
oil-directed allocation to the Tuscaloosa Marine Shale, where costs are coming
down and results have continued to improve. Oil production volumes are
expected to average 6,100 – 6,700 barrels per day for the year, which
represents 30 – 42% year-over-year growth. Natural gas volumes are expected to
decrease by 15 – 20% year-over-year when factoring in the sale of the
Company's East Texas Cotton Valley field for approximately $61 million, which
was previously announced and is scheduled to close on December 22, 2014.
Approximately 5% of the Company's 2015 capital budget will be allocated toward
natural gas development.
LIQUIDITY
The Company entered the fourth quarter with pro forma liquidity of $134.2
million under the Company's $250 million borrowing base. Upon closing of the
sale of its East Texas property referenced above, the borrowing base will be
reduced by $20 million. The Company is expecting a new borrowing base under
its senior credit facility early in 2015, which will include reserve additions
from development activities during the second half of 2014.
The Company has 3,500 barrels of oil per day, or 52 – 55% of estimated oil
volumes for 2015, hedged at $96.11 per barrel. Assuming $65.00 per barrel for
the remainder of the projected volumes, the estimated 2015 blended average oil
price, prior to any basis or transportation costs, would be approximately
$81.00 –$83.00 per barrel.
With a preliminary 2015 capital expenditure budget of $150 – 200 million, the
Company is estimating it has sufficient projected liquidity under current
market conditions, borrowing base and capital structure to execute its 2015
capital plan.
DIVESTITURE
The Board of Directors has authorized management to explore strategic
alternatives for all or a portion of the Company's Eagle Ford Shale asset in
the first half of 2015, which would significantly enhance the Company's
flexibility to further expand its development activities under better market
conditions.
TUSCALOOSA MARINE SHALE ("TMS")
In the TMS, the Company today announced the completion of two additional wells
in its Blades area of Tangipahoa Parish, Louisiana. The Verberne 5H-1 (66.7%
WI) well, which was drilled and completed with an approximate lateral length
of 6,600 feet and was fracked with 21 stages, has been producing on a
restricted choke program and has achieved a peak 24-hour rate to date of 1,375
Boe per day, comprised of 1,335 barrels of oil (96%) and 250 Mcf of natural
gas per day on a 14/64 inch choke. The Williams 46H-1 (68.2% WI) well, which
was drilled with an approximate lateral length of 6,400 feet and was fracked
with 20 stages, is in early flowback and is currently producing approximately
1,000 Boe per day, but has not achieved peak rate. An update on this well will
be provided at a later date. Both of these wells were completed with the
Company's newly optimized frac design, which includes (i) increased frac stage
length with adjusted perforation cluster spacing, resulting in a reduced
number of stages with similar proppant per foot; (ii) decreased fluid volumes,
which reduced pump time per stage; and (iii) savings for plug drill out and
rental equipment due to reduced number of stages. In total, these adjustments
resulted in a savings in excess of $1.1 million per well.
The Company is in completion phase on its Kent 41H-1 (99.8% WI) well, which
was drilled with an approximate 6,000 foot lateral in 27 days at one of the
lowest drilling cost to date. On the Company's initial two-well pad, the
CMR/Foster Creek 8H-1 (78.8% WI) has been drilled and the CMR/Foster Creek
8H-2 (81.8% WI) well is drilling in the lateral.
By achieving drill times of 25 – 30 days, as achieved by several industry-wide
wells including our most recent Kent 41H-1 well, coupled with the recently
modified frac design as utilized on the Verberne 5H-1 and Williams 46H-1
wells, the Company believes it can achieve cost savings in excess of $1.5
million for a single well pad prior to any reduction in service costs or
savings associated with drilling off of multi-well pads. Substantial cost
savings combined with the Company's strong 2015 hedge position, and the
inherent advantages of the TMS, which include premium LLS pricing, lower
average royalty burden and severance tax relief, allow for the continued
economic development of the play in 2015.
OTHER INFORMATION
Certain statements in this news release regarding future expectations and
plans for future activities may be regarded as "forward looking statements"
within the meaning of the Securities Litigation Reform Act. They are subject
to various risks, such as financial market conditions, changes in commodities
prices and costs of drilling and completion, operating hazards, drilling
risks, and the inherent uncertainties in interpreting engineering data
relating to underground accumulations of oil and gas, as well as other risks
discussed in detail in the Company's Annual Report on Form 10-K and other
filings with the Securities and Exchange Commission. Although the Company
believes that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to
be correct.
Initial production rates are subject to decline over time and should not be
regarded as reflective of sustained production levels. In particular,
production from horizontal drilling in shale oil and gas resource plays and
tight oil and gas plays that are stimulated with extensive pressure fracturing
are typically characterized by significant early declines in production rates.
Goodrich Petroleum is an independent oil and gas exploration and production
company listed on the New York Stock Exchange.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/goodrich-petroleum-announces-preliminary-2015-capital-expenditure-budget-and-operational-update-300007471.html
SOURCE Goodrich Petroleum Corporation
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