Quicksilver Resources Inc. is continuing to “hammer on the cost side” of its business, deferring elective spending in the energy patch and cutting back on staff. A recently announced joint venture (JV) in the Barnett Shale with Tokyo Gas Co. Ltd. was welcome news (see NGI, April 8), but there is more work ahead. “We are focused on the most important projects and we’re bringing in partners to both reduce debt and assist in the development of our assets,” said CEO Glenn Darden. “The company is very serious about reducing costs and living within cash flows.” Over the last year, the employee count has come down by about 20%. The Fort Worth, TX-based operator reported an adjusted net loss of $6 million (minus 4 cents/share) compared with a loss in 1Q2012 of $15 million (minus 9 cents). Since it was able to complete a long-sought Barnett Shale deal and in light of “challenging” natural gas liquids pricing, the company has shelved plans to create a Barnett master limited partnership (see NGI, Nov. 12, 2012).
Goodrich Petroleum Corp.‘s Tuscaloosa Marine Shale (TMS) development is continuing, and the company has high hopes for the play. Meanwhile, it has returned to completing wells in the Haynesville Shale in anticipation of higher natural gas prices. Four TMS wells are in the completion phase and a second operated well is drilling, the company said last week. “While currently representing only 25% of our full year capex [capital expenditure] budget of $200 million, the TMS is certainly a focal point for us as we continue to move toward larger-scale development mode,” said CEO Walter G. Goodrich during an earnings conference call. Goodrich expects to complete 13 gross (5.7 net) previously drilled Haynesville Shale wells this year. “We expect our recently initiated plan of completing previously drilled Haynesville Shale wells will result in a turnaround in natural gas production and see us grow net gas production in the second half of this year,” the CEO said. “And with natural gas prices now over $4.00/Mcf, it should have a meaningful impact on operational performance.”
Since the latter half of 2012, Swift Energy Co. has been directing Eagle Ford drilling at a lower, narrower section of the play with more precision than previously, and it is paying off, said CEO Terry Swift. “This has allowed us to complete our wells in a more porous section of the shale with higher total organic content.” Performance in South Texas is improving, but spending is declining due to a lower rig count and drilling activity. The company is mindful of cash flow and is pursuing a partnership or joint venture that will allow it to maintain a drilling program of at least three rigs in its highest-value acreage without increasing leverage. “There have been numerous transactions in the Eagle Ford Shale announced this year, and we will still expect to have a transaction in place by the end of the third quarter.”
Forest Oil Corp. continues to step up its activity in the Eagle Ford Shale with the aid of a recently struck joint venture and is expanding activity in the Texas Panhandle. East Texas results remain consistent and predictable, and the company is developing a new oil project in the area, said CEO Patrick R. McDonald. “During the first quarter, we continued an active development program and will soon have the six rigs at work, three in the Eagle Ford Shale, two in the Texas Panhandle and one in East Texas. We plan to maintain this level of activity in the Panhandle and East Texas throughout the year. We will also add a fourth rig to the Eagle Ford program in the coming months as we ramp up the drilling program on the acres in Gonzales County.”
Gulfport Energy Corp. expects to increase its operated horizontal rig count in the Utica Shale to seven from four by the end of June, and it has budgeted $494-504 million to drill 55-60 gross (49-54 net) wells in the play this year. The Oklahoma City-based company spud 10 gross (7.7 net) wells in 1Q2013 and, by the end of March, it had one gross well waiting on completion, three gross wells being drilled by horizontal rigs, five gross wells with vertical sections completed and waiting on a horizontal rig, and one gross well being drilled with a top-hole rig. Gulfport is currently operating four horizontal rigs and two top-hole rigs in the Utica. The company currently has nine wells flowing into sales pipelines at a combined gross rate of more than 10,000 boe/d and expects to have four more wells on line by the end of June, CEO James Palm said.
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