Goodrich Updates Operations, 2011 Budget and Production
Goodrich Petroleum Corporation today announced the following:
EAGLE FORD SHALE TREND
In the oil window of the Eagle Ford Shale, the Company has completed its second Eagle Ford Shale well, the Burns Ranch A 1H (67% WI) in LaSalle County, Texas, at a 24-hour production rate of 1,010 barrels of oil equivalent ("BOE") per day, comprised of 930 barrels of oil and 480 Mcf of gas per day, on a 20/64 inch choke with 1,100 psi. The well was drilled and completed with an approximate 5,900 foot lateral and 20 frac stages. The Company has also completed fracture stimulation operations and started initial flow back on its third Eagle Ford Shale well, the Pan Am C-1H (79% WI) in Frio County, and expects initial production information will be provided with its fourth quarter operational update. Additionally, the Company's fourth Eagle Ford Shale well, the Burns Ranch 4H (67% WI) in LaSalle County, has been drilled, with fracture stimulation planned within the next two weeks.
Goodrich is the operator and owns approximately 40,000 net acres in LaSalle and Frio Counties. The Company is currently moving a second rig to the area and anticipates running 2 rigs in the trend throughout 2011.
SOUTH HENDERSON FIELD, RUSK COUNTY, TEXAS
The Company has completed a horizontal Cotton Valley Taylor sand well, its Travis Crow 1H (100% WI), at a 24-hour production rate of 12,180 Mcfe per day, comprised of 9,900 Mcf and 380 barrels of oil per day, on a 42/64 inch choke with 1,750 psi. The well was drilled and completed with an approximate 4,000 foot lateral and 12 frac stages.
Goodrich is the operator and owns approximately 8,100 net acres in the field.
2011 CAPITAL EXPENDITURE BUDGET
The Company has established a 2011 preliminary capital expenditure budget of $225 million, which is a reduction of $30 million from its 2010 budget, with approximately $100 million allocated to the oil window of the Eagle Ford Shale, $60 million allocated to Haynesville Shale development in the Shelby Trough, $30 million to core Haynesville Shale development in North Louisiana, $13 million to the Cotton Valley Taylor horizontal development at South Henderson and $22 million to miscellaneous expenses including leasehold acquisitions and infrastructure. The Company expects to fund the 2011 capital expenditure budget with a combination of cash flow from operations and proceeds from the previously announced divestiture of non-core properties of approximately $70 million, which is scheduled to close by year-end.
2011 PRODUCTION GUIDANCE
The Company has issued production guidance for 2011, whereby production is expected to grow on an Mcfe basis by approximately 15 – 25%. Oil production is expected to grow by 300 – 350% to 10 – 15% of estimated volumes on an Mcfe basis. Natural gas production, after taking into effect the Company's previously announced non-core asset sale, is expected to grow by 7.5 – 12.5% in 2011.
The Company has entered into an agreement to swap 800 barrels of oil per day for 2011 at $100 per barrel. The counterparty to the agreement has an option to extend the swap agreement for two successive one year terms covering 2012 and 2013 under the same terms and conditions, with the counterparty's election due the last business day of December in each of the preceding years.