Oklahoma City-based Chaparral Energy Inc., which works the STACK, aka the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties, expects to increase production by 45-59% this year using fewer rigs and less capital.

The independent, in production and capital expenditure guidance issued on Tuesday, forecast 2019 total output of 25,000-27,000 boe/d, which would be 22-32% higher year/year. STACK production is expected to climb by 45-59% at 21,000-23,000 boe/d.

“From achieving record STACK production to lowering our overall cost structure and enhancing our liquidity through our bond offering, Chaparral continues to set itself apart as a premier STACK operator,” said CEO Earl Reynolds.

“Our favorable service contracts and agile operating structure, coupled with the STACK’s numerous economic benefits, allow us to quickly and effectively respond to changes within the market and optimize our financial flexibility.”

Once Chaparral completes drilling its Merge prospect in Canadian County and is done with spacing tests in Kingfisher, “we will reduce our rig count from four to three in the second quarter. This strategic reduction will allow us to lower our capital budget, while still competitively growing production.”

Full-year production is expected to show significant growth, but during the first quarter, output has been impacted by the timing of first sales associated with spacing tests and remaining drilling joint venture wells, management noted.

The company expects first sales from only 10% of its total 2019 operated net wells in the first quarter. First sales from its 11-well Merge spacing test, which it began drilling late last year, are expected during the second quarter.

Planned capex is $275-300 million, mostly for drilling and completion (D&C) costs of $210-225 million. Lease operating expense is slated to average $3.75-4.25/boe.

Nearly 60% of operated D&C is earmarked for Canadian County, with 20% in Kingfisher County and 20% in Garfield County. Additionally, the company plans to complete the remaining eight wells in its drilling joint venture program with Bayou City Energy.

This year’s acquisition budget of $12.5-17.5 million, lower than in 2018, primarily would go to acreage poolings associated with the operated D&C program. Lease operating costs overall this year are expected to be $5.00-5.50/boe, with STACK costs estimated at $3.75-4.25.

Operational results are scheduled to be issued on March 14.