Natural gas production more than doubled for Goodrich Petroleum Corp. in the third quarter as the Houston-based company continued its focus on the Haynesville Shale and considers how fast it wants to grow in the upcoming year.

Production averaged 84,663 Mcfe/d in 3Q2018, up 112.8% from the year-ago quarter (39,793 Mcfe/d) and 39.7% sequentially (60,582 Mcfe/d). Natural gas accounted for 96% of total production in 3Q2018 (7.48 Bcf), compared to 88% in the year-ago quarter (3.24 Bcf).

The company spent $38.3 million on capital expenditures (capex) during 3Q2018, most of which ($37.5 million) was spent on drilling and completion costs in the Haynesville Shale Trend. By comparison, Goodrich spent $5.38 million on capex in the year-ago quarter. Capex is expected to range from $8-10 million in 4Q2018.

Goodrich expects to exit 2018 with production averaging 65,000-75,000 Mcfe/d. To reach that goal, the company said it expects 4Q2018 production to average 95,000-105,000 Mcfe/d. It plans to exit the year having completed 7.3 net wells with an average lateral length of 8,000 feet, using a capital budget of $85-95 million, of which 70% was spent in the Bethany-Longstreet field in DeSoto Parish and the remainder allocated to its Thorn Lake operating area in northwest Louisiana.

The company deferred completion of 0.94 net wells until 1Q2019 “in order to take advantage of synergies from batch completing multiple wells.”

During an earnings call Thursday to discuss 3Q2019, COO Robert Turnham said the company expects a higher capex allocation to Bethany-Longstreet in 2019, as well as a higher operated percentage. He said the company plans a preliminary capex budget of $125-150 million, which would be fine tuned after a board meeting in December.

CEO Gil Goodrich added that the company, based on internal modeling, could add two net wells next year to keep production flat.

“We could wait to keep production flat with very little [capital], call it $20-25 million of net capital,” Goodrich said. “So the lever on the growth is just purely a question of how fast you want to grow. We could grow and do it within cash flow in 2019 very comfortably without any question.

“We’re really looking at what our trailing EBITDA [earnings before interest, tax, depreciation and amortization] metrics are — where are we comfortable, where is our board comfortable from a debt perspective. And given the relatively low leverage on the balance sheet today and the tremendous growth opportunities, we think the right answer is to outspend a little bit, and we’re very comfortable that the borrowing base will actually be expanding faster than any incremental borrowings as liquidity actually improves during the course of next year.”

Turnham concurred, adding “we think there is a certain critical mass that is beneficial to have, and certainly consensus EBITDA of $100 million next year for us gets us up to a size that makes some sense and should be a real value creator for the company and for our shareholders.”

The company holds 19,100 net acres in the North Louisiana portion of the Haynesville, and 3,300 net acres in the Shelby Trough/Angelina River Trend in East Texas, which is also prospective to the Bossier Shale. It also holds 39,300 net acres in the Tuscaloosa Marine Shale and 12,300 net acres in the Eagle Ford Shale.

Goodrich reported net income of $1.67 million (14 cents/basic share) in 3Q2018, compared to net income of $720,000 (seven cents) in the year-ago quarter. Revenues totaled $24.4 million in 3Q2018, compared to $13.2 million in 3Q2017.