Despite a tough year for public E&Ps, Lonestar Resources US Inc. still achieved record growth in 2019, the U.S. shale producer said in a Feb. 20 news release.
As of year-end 2019, Lonestar had increased its proved reserves to a record 100.6 million barrels of oil equivalent, all of which are located in the Eagle Ford Shale.
“In a market in which our industry is capital constrained, 2019 was another year of capital-efficient growth for Lonestar, driven by strong results from our drilling program, which saw the majority of our new-drills exceed third party forecasts, resulting in positive reserve revisions,” Lonestar CEO Frank D. Bracken III said in a statement.
Bracken also noted that even without producing property acquisitions, Lonestar’s drilling program generated organic reserve growth via a combination of the outperformance of new wells and reserves additions through newly-leased acreage.
“In doing so, we extended our track-record of low-cost reserve growth, registering exceptional all-sources finding and development costs of $8.77 per boe while replacing 353% of 2019 production,” he said.
Lonestar is a pure-play Eagle Ford operator with more than 57,000 net acres in the crude oil window of the South Texas shale play. The company’s position is located in 11 counties, which are divided into three distinct regions: Western Eagle Ford, Central Eagle Ford and Eastern Eagle Ford.
For 2020, Lonestar is targeting production of between 17,000 and 18,300 boe/d. The company’s 2019 production guidance was between 14,800 and 15,000 boe/d, a roughly 34% increase vs. 2018.
Lonestar also expects its 2020 production targets can be met with less spending and has set its capex for the year at between $90 million to $115 million. In 2019, Lonestar’s capex totaled $171.8 million.
Additionally, the company anticipates generating $5 million to $20 million of free cash flow in 2020.
“With virtually all of our crude oil hedged in 2020 at $56.95/bbl and the bulk of our natural gas hedged in 2020 at $2.58/MMBtu,” Bracken said, “we have a high degree of cash flow certainty that we will judiciously deploy in our 2020 drilling and completion program, and we expect to do so at lower well costs which we expect to yield continued growth in production and EBITDAX.”
Recommended Reading
CoolCo, GAIL Enter Long-term LNG Agreement
2024-05-16 - CoolCo and GAIL’s agreement is intended to secure long-term LNG supply in India’s market, with GAIL having an option to extend the 14-year agreement by another two years.
Gunvor Group Inks Purchase Agreement with Texas LNG Brownsville
2024-03-19 - The agreement with Texas LNG Brownsville calls for a 20-year free on-board sale and purchase agreement of 0.5 million tonnes per annum of LNG for a Gunvor Group subsidiary.
CPS Closes $785MM Deal for Talen Energy’s Texas NatGas Plants
2024-05-01 - CPS Energy has acquired all assets associated with the 897-MW Barney Davis and 635-MW Nueces Bay natural gas plants in Corpus Christi, Texas, and the 178-MW natural gas plant in Laredo, Texas.
Texas LNG Export Plant Signs Additional Offtake Deal With EQT
2024-04-23 - Glenfarne Group LLC's proposed Texas LNG export plant in Brownsville has signed an additional tolling agreement with EQT Corp. to provide natural gas liquefaction services of an additional 1.5 mtpa over 20 years.
Babcock & Wilcox to Convert Coal Plant to NatGas
2024-03-18 - B&W will convert the plant’s two coal-fired boilers to natural gas by designing and installing burners, air systems, fans and other equipment.