Denver-based Bill Barrett Corp. said Monday the company has a "definitive" agreement to sell certain noncore assets in the Uinta Basin for $27 million, and in the Denver-Julesburg (DJ) Basin, where it has placed its major focus, it will drop its rig count from two to one.
While reaffirming $375 million in so-far untapped credit, CEO Scot Woodall said the Uinta proceeds will help with the company's liquidity and the DJ Basin rig reduction reflects "improvements in drilling and completion operations."
Woodall also said this year's capital expenditures have been cut from the $325-350 million range to $315-325 million. At the same time, the range for production is being increased to 6.3-6.5 million boe from 6.1-6.5 million boe.
The Uinta sale is expected to close before the end of November with an effective date of Sept. 1, 2015. The properties involved produced about 470 boe/d in August, with estimated proved reserves of 11 million boe. There are 17,632 acres in the Uinta involved in the sale.
"We are pleased with the support of our lender group and believe that the reaffirmation of our borrowing base in the current commodity price environment is a testament to the high-quality nature of our XRL [extended reach lateral] assets," Woodall said.
On a 2Q2015 earnings conference that reported considerable red ink for the company, Woodall and other senior executives attributed the continuing production growth in the DJ to the deployment of its XRL drilling program and increasingly efficient completion techniques (see Shale Daily, Aug. 12).
At mid-year Bill Barrett management said it would increase its capital expenditures for the second half of 2015, deploying a second drilling rig to the DJ as it expanded its stable of wells drilled with longer laterals (see Shale Daily, June 12). That all has changed.
"Reflecting much improved drilling efficiencies, the company will accomplish its planned activities in the northeast Wattenberg area for the remainder of the year with a one-rig drilling program," a Bill Barrett spokesperson said on Monday.
Woodall said the company's focus has been on cost-cutting and efficiency, adding that time to drill an XRL well has been dropped by 40%, including "a recent best-in-class well that was drilled in 7.5 days."