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. (Source: Lonestar Resources US Inc.)
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
Market Watchers: The Narrative Shifts; The Industry Responds
2022-06-24 - We entered 2022 with the view that E&P spending would grow in the mid-teens year-over-year. This is now likely closer to 20%, according to James West, senior managing director at Evercore, in a market outlook exclusive to Oil and Gas Investor.
Chevron ESG Leader Talks Finding Balance in ESG, Energy Transition
2022-04-28 - Plans for energy security and ESG must be balanced, Lisa Epifani, manager of ESG and sustainability for Chevron, said at Hart Energy’s Energy ESG Conference.
US Agrees $500 Million Loan Guarantee for Utah Hydrogen Storage Project
2022-06-09 - With the help of Department of Energy-approved $504.4 million loan, the U.S. will finance the world's largest hydrogen storage facility in alignment with the Biden administration's goal to reduce the cost of producing clean hydrogen.
BP Forges Energy Partnership with UAE’s ADNOC, Masdar
2022-05-24 - Announcing their new-energy partnerships, ADNOC said the H2Teesside low-carbon hydrogen project with BP had moved into the design phase.
Chevron Profit Nearly Quadruples as Oil Prices Surge
2022-04-29 - Chevron's first quarter posted earnings of $6.5 billion surpassed Wall Street's predictions and quadrupled from first quarter 2021.