Houston-based Goodrich Petroleum Corp. said Monday its preliminary 2011 capital expenditure budget is $225 million, a $30 million reduction from 2010 spending; however, production is expected to grow.
Goodrich said 2011 production is expected to grow on an Mcfe basis by 15-25%. Natural gas production, after a pending asset sale, is expected to grow by 7.5-12.5%. Oil production is expected to grow by 300-350% to 10-15% of estimated production volume on an Mcfe basis.
Spending is to be funded by cash flow from operations and proceeds of about $70 million from a previously announced divestiture.
The company is targeting about $100 million to the oil window of the Eagle Ford Shale in South Texas, $60 million 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.
In the oil window of the Eagle Ford the company has completed its second Eagle Ford well, the Burns Ranch A 1H (67% WI) in LaSalle County, TX, at a 24-hour production rate of 1,010 boe/d, comprised of 930 bbl 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.
Goodrich has also completed fracture stimulation operations and started initial flow back on its third Eagle Ford well, the Pan Am C-1H (79% WI) in Frio County, TX, and expects initial production information will be provided with its fourth quarter operational update. The company's fourth Eagle Ford well, the Burns Ranch 4H (67% working interest) 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 moving a second rig to the area and anticipates running two rigs in the trend throughout 2011.