Oklahoma City-based Roan Resources Inc. said it plans to cut capital expenditures (capex) by at least one-quarter and will focus on growing production by about 30% in 2019 under a revised development plan that projects positive free cash flow (FCF) by the end the year, rather than 2020.

The Oklahoma pure play released a capex budget of $520-570 million for 2019, with more money devoted to the first half of the year. Roan said the budget was front-loaded to accommodate increased completion activity that resulted from the company developing its inventory of drilled but uncompleted wells in 2018.

By comparison, Roan reported spending $558 million on capex through the first three quarters of 2018 and expects 4Q2018 spending will be about $217 million, within guidance, for a total spend of $775 million. The new 2019 capex budget would represent a cut of at least 26.4% at the high point of guidance and a 29.7% cut at the midpoint.

“Capital discipline remains at the forefront of our strategy as we plan for 2019, and as such, we are adjusting our development activity to limit outspend and allow for free cash generation by the end of the year, while still materially growing production year over year,” said CEO Tony Maranto. He said the company “will modulate its activity levels to balance aggregate outspend,” allowing for FCF generation by the end of the year.

In a nod to declining commodity prices, Roan also reduced completion activity to allow for a reset of oilfield service pricing. It expects to spud 57-62 gross operated wells and have 70-75 gross operated completions in 2019. The company’s projections assume commodity prices of $55/bbl for oil and $2.75/Mcf for natural gas.

Roan issued full-year production guidance of 56,000-59,000 boe/d for 2019, with production increasing to 64,000-66,000 boe/d in 4Q2019. Oil is projected to account for 26-28% of full-year production, while liquids would account for 58-60%. The company expects production to be flat in 1Q2019 as a result of a slowdown in completions activity during late 4Q2018 and early 1Q2019.

Production in 4Q2018 is expected to be in-line with the midpoint of guidance for the quarter at 54,100 boe/d, including 27% oil and 58% liquids. Roan said the figure would mark a 110% increase in production from the year-ago quarter and a 17% increase sequentially. Full-year production for 2018 is expected to average 43,700 boe/d, which was within guidance of 43,000-44,000 boe/d.

“The fourth quarter results are a continued demonstration of the quality of our Merge acreage and the type of results we have been working towards all year,” Maranto said.

Roan holds 170,000 net acres in central Oklahoma, including 26,700 net acres in the South Central Oklahoma Oil Province, aka the SCOOP, and 7,500 net acres in the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties, aka the STACK. Sandwiched between them, the company holds 118,500 net acres as the Merge prospect, a legacy area with several zones Roan intends to target.

Roan was formed last year by Linn Energy Inc., Roan Holdings LLC and Roan LLC following a reorganization. The company plans to issue its quarterly results on March 18.