Tulsa-based Midstates Petroleum Co. Inc., whose focus is on the Mississippian Lime in Oklahoma, said Tuesday it does not intend to operate any drilling rigs in the first half of 2019 and would continue to evaluate its future activity levels and capital expenditures on an ongoing basis.
“Given the current macroeconomic conditions and the fact that we have over 90% of our core acreage held by production, we have decided to take a pause on our drilling program as we enter 2019,” CEO David Sambrooks said.
“While we monitor the pricing environment during this pause, we will take this opportunity to further evaluate our new drilling and completions techniques, explore additional ways to reduce costs and continue to generate considerable free cash flow.”
The management team and board “continue to believe” in the value of the Mississippian Lime, he said.
The Miss Lime, as it is commonly known, has never garnered the activity of other plays since the beginning of the unconventional drilling revolution in the mid-2000s.
However, BCE-Mach LLC, formed earlier this year by the ousted founder of SandRidge Energy Inc., Tom L. Ward, has been building an arsenal in the Miss Lime. Last August, BCE-Mach agreed to buy a bundle of properties that were primarily operated by Ward’s former company. It also scooped up Chesapeake Energy Corp.’s Miss Lime assets this year; Ward co-founded Chesapeake.
Midstates also said its board has approved a share repurchase program to purchase up to $50 million of common stock “in a single transaction or from time to time” on the open market or via other transactions. Midstates had about 25.3 million shares of common stock outstanding at the end of November.