Goodrich Petroleum Corp., which saw production more than triple in 4Q2018, said it plans to double production this year and focus on strategic acquisitions to add to its drilling inventory while running a single-rig program on gassy targets in the Haynesville Shale.
Houston-based Goodrich reaffirmed plans to spend $90-100 million on capital expenditures (capex) in 2019, versus almost $107 million in 2018. It also plans to drill and/or complete 9.8 net horizontal wells, with a blended net average length of about 7,000 feet. However, it has dropped plans to add a second rig in 2Q2019. The company plans to complete 2 net wells in 1Q2019, followed by 3.4 net in 2Q2019, 2.7 net in 3Q2019 and 1.7 net in 4Q2019.
Most of this year’s capex, which could be increased if pricing improves, is to focus on drilling and completions in Louisiana’s Bethany-Longstreet field in DeSoto Parish and the Thorn Lake operating area. Production is expected to average 135,000-145,000 Mcfe/d, 98% weighted to gas.
Production more than tripled in the fourth quarter, to average 99,227 Mcfe/d in 4Q2018. The company also saw its full-year production more than double, reaching 70,537 Mcfe/d. Natural gas accounted for 97% of output for the quarter at 8.8 Bcf, and 95% for the year, which averaged 24.4 Bcf. However, oil and condensate production declined 29% year/year in the final quarter to 48,000 bbl and was down 29% for 2018 from 2017 at 217,000 bbl.
Goodrich conducted drilling/completion operations on 19 wells last year, turning to sales 7.5 net wells in the Haynesville, including the Cason-Dickson 14&23 Nos. 3 and 4 wells that were drilled on a common pad in Red River Parish. The Cason-Dickson wells had combined peak production of 62,000 Mcfe/d.
The company also drilled and cased the Loftus 27&22 Nos. 1 and 2 wells in DeSoto Parish with laterals of about 7,500 feet. Hydraulic fracturing operations are expected to begin at the Loftus wells within 30-45 days. Goodrich provided an operational update on both Cason-Dickson wells and the No. 1 Loftus well last August.
Goodrich said it is still looking for bolt-on opportunities in North Louisiana, where it currently holds 20,000 net acres. In total, the company holds about 23,000 net acres in the Haynesville, including 3,000 net acres in the Shelby Trough/Angelina River Trend in East Texas, which is also prospective to the Bossier Shale.
Goodrich reported net income of $8.1 million (58 cents/share) in 4Q2018, compared with a loss of $1.8 million (minus 17 cents) in the year-ago quarter. For 2018, net income was $1.8 million (13 cents/share), versus a 2017 loss of $8 million (minus 80 cents). Oil and gas revenues totaled $34 million in 4Q2018, compared with $10.8 million in the year-ago quarter. Full-year revenues were $87.9 million from $45.3 million in 2017.