Ranger Oil Corp. on Dec. 6 announced an increase in the company’s oil sales guidance for the fourth quarter and an update to its current hedge position while also leaving capex guidance unchanged.

According to a statement by President and CEO Darrin Henke, Ranger Oil is positively revising as well as narrowing its guidance of anticipated sales volumes for the fourth quarter from a range of 25,700 - 27,700 bbl/d of oil to a range of 26,700 - 28,000 bbl/d.

“I am very pleased to announce that, due to the observed outperformance of existing wells, faster cycle times and less anticipated downtime, we now expect our fourth-quarter sales volumes to be considerably higher than initially anticipated,” Henke commented.

Previously Penn Virginia, the company emerged as Ranger Oil following the closing in early October of its all-stock acquisition of Lonestar Resources, which bolstered its position in the Eagle Ford. At the time, the company anticipated maintaining the two-rig program it was operating prior to the Lonestar merger.

Several factors, however, contributed to the outperformance announced by Ranger Oil on Dec. 6, Henke said, including favorable initial results of the company’s Lonestar integration efforts, resulting in the application of best practices on newly producing wells, such as deploying jet pumps for artificial lift, according to his statement.

Other factors Henke noted included an “unwavering focus on increasing operating efficiencies,” which resulted in decreased drilling and completion cycle times and accelerated turn-in-line dates for the quarter. Ranger Oil also continues to see initial outperformance relative to the company’s forecasts as it optimizes its completion and production designs, according to Henke, revealing the inherent quality of its acreage position covering 143,000 net acres in the core of the Eagle Ford Shale in South Texas.

“Lastly, the previously announced field infrastructure upgrades have largely been completed and at a faster pace than anticipated, resulting in less anticipated downtime, while also contributing to positive well performance,” he added.

Given the continued operating efficiencies driving the revised guidance, Henke said the company does not anticipate a change to its previously disclosed capex guidance of between $65 million and $75 million for the quarter.

Additionally, Ranger’s updated commodity hedge positions include collar levels placed quarter to date for first-half 2022 have an average of approximately $63/bbl downside protection, with an average upside exposure of $87/bbl.

Ranger Oil Hedge Summary December 2021 Update Chart
(Source: Ranger Oil Investor Presentation)

“The use of commodity hedging is an integral part of the company’s risk management strategy,” Henke continued. “Given the attractiveness of recent markets, we continued to lean forward on our hedge strategy, resetting the acquired Lonestar hedges to at the market swaps upon closing in early October, as well as proactively placing additional hedge collars prior to the recent pull back in prices.”