Goodrich Petroleum Corp. plans to spend between $65 million and $75 million on capital expenditures (capex) in 2018, all devoted to its holdings in the gassy core area of the Haynesville Shale in North Louisiana.

Under a preliminary capex budget plan unveiled last week, the Houston-based independent said it anticipates drilling 16 gross (6.5 net) horizontal wells in 2018, with a blended net average lateral length of 9,000 feet. The budget, still subject to quarterly review and approval by the board, envisions Goodrich operating about 85% of its net wells for the year.

According to an investor presentation issued this month, Goodrich holds 37,500 gross (18,500 net) acres in the core area of the Haynesville. Its three operating areas in North Louisiana, all prospective to the Haynesville core, are Bethany-Longstreet (12,500 net acres); Greenwood-Waskom (4,700 net acres); and Swan Lake-Thorn Lake (1,300 net acres).

Under the capex plan, Goodrich plans to focus on the Bethany-Longstreet and Thorn Lake areas, which include Louisiana’s Caddo, DeSoto and Red River parishes. The company said it expects to grow production by 130-145% above 2017 levels, to a new range of about 28.3-30.3 Bcfe (77,000-83,000 Mcfe/d). Natural gas is expected to make up 95% of production.

Goodrich expects its cash margin to expand in 2018, as unit costs decline and production volumes increase. The company issued a cash cost guidance range of 12-15 cents/Mcfe for natural gas based on Henry Hub pricing, and $2-2.25/bbl for crude oil based on Louisiana Light Sweet crude oil pricing. Lease operating expenses are forecast to be 30-40 cents/Mcfe in 2018. Other expenses include taxes (7-11 cents/Mcfe), transportation costs (30-40 cents/Mcfe) and general and administrative expenses (40-50 cents/Mcfe).

The company said it has hedged about 40-42% of its expected gas volumes for 2018 at a blended average price of $3.02/Mcfe, and 50-55% of expected crude oil volumes for the year at $51.08/bbl.

Goodrich is currently performing hydraulic fracturing (fracking) operations at the Franks 25&24 No. 1 well, in which it holds a 69% working interest (WI). The Franks well in DeSoto Parish within the Bethany-Longstreet operating area has a 10,000-foot lateral.

The company plans to zipper frack its Wurtsbaugh 25&24 No. 2 and 3 (55% WI) wells upon completion of the Franks well. Both Wurtsbaugh wells have laterals measuring about 7,500 feet. All three wells are expected to come online in early January. Goodrich first announced plans tocomplete the Franks well and drill the Wurtsbaugh wells last August.

Goodrich added that it is currently drilling the Cason-Dickson 14&23 No. 1 and 2 (92% WI) wells in Red River Parish. The Cason-Dickson wells are planned as 10,000-foot laterals, and are expected to be fracked in February.

Goodrich is focused primarily on oil and natural gas targets in the Haynesville in North Louisiana and East Texas, the oil window in the Eagle Ford Shale in South Texas, and the Tuscaloosa Marine Shale in eastern Louisiana and southwestern Mississippi.