FORT WORTH, Texas, Jan. 23, 2017 /PRNewswire/ -- Lonestar Resources
US, Inc. (NASDAQ: LONE) (together with its subsidiaries,
"Lonestar") announced today the initial production test results on
its Burns Ranch wells and the addition of new crude oil
hedges.
Lonestar recently commenced flowback operations on its Burns
Ranch #8H, #9H and #10H wells. While an average of 5% of the
frac load has been recovered from each of these wells thus far,
preliminary production data from these wells is encouraging.
In its recently-completed wells ("Gen 5"), Lonestar utilized
longer lateral lengths, engineered completions using diverters, and
in two of the wells, higher proppant concentrations than its first
set of wells drilled at Burns Ranch in 2015 ("Gen 3"). The
Company has registered 24-hour test rates of 723 barrels of oil
equivalent per day (BOE per day) on the #8H well, which has a
perforated lateral length of 9,518 feet and was fracture stimulated
with a proppant concentration of 1,487 pounds per foot. The
#9H well, which has a perforated lateral length of 9,449 feet and
was fracture stimulated with a proppant concentration of 2,005
pounds per foot, registered a 24-hour test rate of 831 BOE per
day. 24-hour test rates on the #10H well were 789 BOE per
day, which has a perforated lateral length of 8,456 feet and was
fracture stimulated with a proppant concentration of 2,025 pounds
per foot. It should be noted that oil cuts currently average 35%
among the three wells, and the wells are being choke-managed to
restrict gas-oil ratios.
While the production results are preliminary, Lonestar is
encouraged by the fact that the oil produced thus far on its three
new Gen 5 wells exceeds the oil produced of its offsetting Gen 3
wells by 25%, on average, despite being currently produced on a
smaller choke. Further, oil produced per lateral foot thus
far on its Gen 5 wells exceeds the oil produced per lateral foot of
its offsetting Gen 3 wells by 12%, on
average.
Since December 31, 2016, Lonestar
has added to its hedge positions for both 2017 and 2018. For
calendar 2017, the Company added 377 barrels per day of crude oil
swaps at an average price of $56.00
per barrel. For calendar 2018, the Company added 1,000 barrels per
day of crude oil swaps at an average price of $55.60 per barrel. The Company also entered into
a costless collar for 500 barrels per day at a floor of
$50.00 per barrel and a ceiling of
$59.45 per barrel. Table 1
below provides a detailed schedule of Lonestar's hedge positions,
which total 2,877 barrels per day in 2017 and 2,500 barrels per day
in 2018. Lonestar's current natural gas hedge positions are
comprised of a swap for 7,000 MMBTU per day at a price of
$3.36 for 2017.
Table 1: Lonestar
Resources US, Inc. Crude Oil and Natural Gas Hedge
Table
|
|
|
|
Volume
|
|
|
Settlement
Period
|
Derivative
Instrument
|
(bbls)
|
(bbls/day)
|
Fixed
Price
|
|
January - December
2017
|
Oil- WTI Fixed Price
Swap
|
109,500
|
300
|
$51.05
|
|
January - December
2017
|
Oil- WTI Fixed Price
Swap
|
73,000
|
200
|
$50.60
|
|
January - December
2017
|
Oil- WTI Fixed Price
Swap
|
365,000
|
1,000
|
$52.90
|
|
April - December
2017
|
Oil- WTI Fixed Price
Swap
|
137,500
|
377
|
$56.00
|
|
January - December
2018
|
Oil- WTI Fixed Price
Swap
|
365,000
|
1,000
|
$54.18
|
|
January - December
2018
|
Oil- WTI Fixed Price
Swap
|
182,500
|
500
|
$55.65
|
|
January - December
2018
|
Oil- WTI Fixed Price
Swap
|
182,500
|
500
|
$55.55
|
|
|
|
|
|
|
|
Settlement
Period
|
Derivative
Instrument
|
(bbls)
|
(bbls/day)
|
Put(s)
|
Calls
|
January - December
2017
|
Oil- 3-Way
Collar
|
365,100
|
1,000
|
$40.00 /
$60.00
|
$85.00
|
January - December
2018
|
Oil- 2-Way
Collar
|
182,500
|
500
|
$50.00
|
$59.45
|
|
|
|
|
|
|
|
|
Volume
|
|
|
Settlement
Period
|
Derivative
Instrument
|
(MMBTU)
|
(MMBTU/day)
|
Fixed
Price
|
|
January - December
2017
|
Natural Gas- NYMEX
Fixed Price Swap
|
2,555,000
|
7,000
|
$3.36
|
|
Cautionary & Forward Looking Statements
Lonestar Resources US, Inc. cautions that this press release
contains forward-looking statements, including, but not limited to,
statements about the new chairman's expertise, ability and
anticipated contributions to Lonestar; Lonestar's execution of its
growth strategies; growth in Lonestar's leasehold, reserves and
asset value; and Lonestar's ability to create shareholder value.
These statements involve substantial known and unknown risks,
uncertainties and other important factors that may cause our actual
results, levels of activity, performance or achievements to be
materially different from the information expressed or implied by
these forward-looking statements. These risks and uncertainties
include, but are not limited to, the following: volatility of
oil, natural gas and NGL prices, and potential write-down of the
carrying values of crude oil and natural gas properties; inability
to successfully replace proved producing reserves; substantial
capital expenditures required for exploration, development and
exploitation projects; potential liabilities resulting from
operating hazards, natural disasters or other interruptions; risks
related using the latest available horizontal drilling and
completion techniques; uncertainties tied to lengthy period of
development of identified drilling locations; unexpected delays and
cost overrun related to the development of estimated proved
undeveloped reserves; concentration risk related to properties,
which are located primarily in the Eagle Ford Shale of South Texas; loss of lease on undeveloped
leasehold acreage that may result from lack of development or
commercialization; inaccuracies in assumptions made in estimating
proved reserves; our limited control over activities in properties
Lonestar does not operate; potential inconsistency between the
present value of future net revenues from our proved reserves and
the current market value of our estimated oil and natural gas
reserves; risks related to derivative activities; losses resulting
from title deficiencies; risks related to health, safety and
environmental laws and regulations; additional regulation of
hydraulic fracturing; reduced demand for crude oil, natural gas and
NGLs resulting from conservation measures and technological
advances; inability to acquire adequate supplies of water for our
drilling operations or to dispose of or recycle the used water
economically and in an environmentally safe manner; climate change
laws and regulations restricting emissions of "greenhouse gases"
that may increase operating costs and reduce demand for the crude
oil and natural gas; fluctuations in the differential between
benchmark prices of crude oil and natural gas and the reference or
regional index price used to price actual crude oil and natural gas
sales; and the other important factors discussed under the caption
"Risk Factors" in our Registration Statement on Form 10, as amended
and filed with the Securities and Exchange Commission, or the SEC,
on June 9, 2016, our Quarterly
Reports on Form 10-Q filed with the SEC, as well as other documents
that we may file from time to time with the SEC. We may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, and you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
The forward-looking statements in this presentation represent our
views as of the date of this presentation. We anticipate that
subsequent events and developments will cause our views to change.
However, while we may elect to update these forward-looking
statements at some point in the future, we have no current
intention of doing so except to the extent required by applicable
law. You should, therefore, not rely on these forward-looking
statements as representing our views as of any date subsequent to
the date of this presentation.
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SOURCE Lonestar Resources US, Inc.