Goodrich Petroleum Corp., citing commodity prices, lowered its capital expenditures (capex) for 2019 by about $40 million, but said it expects to maintain its previous production guidance for the upcoming year because its wells are outperforming type curves.
The Houston-based producer said it now expects full-year capex to range from $90-100 million, down from a preliminary range of $125-150 million that CEO Gil Goodrich mentioned during an earnings call in November. Still, the company expects to grow production 90-105% compared to 2018, to a range of about 49.3-52.9 Bcfe (135,000-145,000 Mcfe/d) in 2019. Natural gas is expected to comprise about 98% of production.
Goodrich said it plans to drill and/or complete 9.8 net horizontal wells in 2019, with a blended net average length of about 7,000 feet. Management said the budget contemplates operating 100% of its net wells for the year, adding that spending "is subject to quarterly review and approval by the company's board of directors, with the flexibility to accelerate in the second half of the year depending on commodity prices."
During the third quarter, Goodrich spent most of its capex on drilling and completion costs in the Haynesville Shale Trend in Louisiana. On Thursday, the company signaled it would do likewise into 2019, devoting "the vast majority of the budget to drilling and completing core Haynesville Shale wells" in the Bethany-Longstreet field in DeSoto Parish and its Thorn Lake operating area in northwest Louisiana.
In an operational update, Goodrich said it expects to begin hydraulic fracturing operations at two Cason-Dickson wells in the Thorn Lake area in early January, followed by two Loftus wells in the Bethany-Longstreet field. Goodrich holds a 98% working interest (WI) in the Cason-Dickson wells and about a 90% WI in the Loftus wells, which were drilled with 9,300- and 7,500-foot laterals, respectively.
Goodrich plans to start 2019 with a one-rig drilling program focused on its core North Louisiana Haynesville acreage, and will add a second rig in 2Q2019.