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Goodrich Raising TMS Spending, Rigs

Goodrich Petroleum Corp. raised its 2013 capital expenditure (capex) budget by $25 million as it committed further to the Tuscaloosa Marine Shale (TMS). Next year is expected to see Goodrich running five rigs in the TMS, an increase from two currently.

This year's capex is now estimated to be $255 million. The additional funds will support the addition of a second rig to the company's horizontal drilling program in the TMS as well as leasehold extension payments in the play during the fourth quarter.

Goodrich also said its preliminary 2014 capital capex budget is $375 million, which will, in part, fund an increase to five horizontal rigs running in the TMS by the end of 2014. Goodrich said it plans to spend about $300 million next year on drilling and completion activity including facilities and infrastructure in the TMS.

Next year Goodrich plans to spend about $30 million on drilling and completion activities in both its Eagle Ford Shale and Angelina River Trend (ART)/Haynesville Shale areas. An additional $15 million is budgeted for leasehold acquisitions and extensions as well as for general corporate purposes, including working capital.

Last August, CEO Gil Goodrich talked about stepping up activity in the TMS following a recent acquisition in the play (see Shale Daily,Aug. 8).

The budget for next year assumes successful completion of an equity offering announced Wednesday. Goodrich priced a public offering of six million shares of common stock at $25.25/share. The offering is expected to settle and close on Monday. Net proceeds are expected to be about $144.2 million and are to fund accelerated TMS activity. Goodrich has more than 300,000 net acres in the TMS.

Last week Goodrich announced the completion of its CMR-Foster Creek 20-7H-1 (99% working interest) TMS well in Wilkinson County, MS. The well was drilled with a 6,200-foot lateral and fracture (frack) stimulated with 23 stages. Completion issues were encountered during the drilling out of frack plugs with coiled tubing, resulting in the loss of a bottom hole assembly and fishing tools in the well.

The company replaced the coiled tubing unit with a workover rig in an attempt to remove the downhole tools, but fishing operations were unsuccessful. The well was subsequently placed on production from the about 2,100 feet of usable and unobstructed lateral. The well has reached a 24-hour peak production rate of 527 boe/d (500 b/d of oil and 174 Mcf/d of gas) on a 16/64 inch choke from the 2,100 feet of lateral.

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