PetroQuest Energy Announces 38.2 MMcfe/d Initial Rate From its First Cotton Valley Pad and Increases Second and Third Quarter...
July 12 2017 - 4:01PM
PetroQuest Energy, Inc. (NYSE:PQ) announced today results from the
Company’s first multi-well pad in the Cotton Valley. The
three well pad (average NRI: 59%) established a cumulative initial
24 hour gross daily rate of 27,697 Mcf of gas, 1,678 barrels of
NGLs and 67 barrels of oil, for an equivalent rate of 38,167
Mcfe/d. The wells on this pad had an average lateral length
of 5,291 feet and the Company estimates an average drill and
complete cost of approximately $860 per lateral foot. The
initial 24 hour gross daily rates and certain additional operating
data per well were as follows:
Well |
|
Mcfe/d |
|
Lateral Length (ft) |
|
Lbs Proppant/lateral foot |
PQ #23 |
|
14,489 |
|
5,972 |
|
799 |
PQ #24 |
|
5,396 |
|
4,765 |
|
838 |
PQ #25 |
|
18,282 |
|
5,135 |
|
1,216 |
PQ #23 and PQ #25 were completed in the E-berry
bench of the Cotton Valley while PQ #24 represented the Company’s
first horizontal test of the E bench. While drilling the
horizontal section of the well, PQ #24 experienced mechanical
issues associated with the directional drilling tools resulting in
approximately 50% of the well being drilled out of the productive
section of the E bench. Considering the mechanical issues
encountered, the Company is encouraged by the early results and the
initial rate achieved by PQ #24.
In connection with the completion operations on
this three-well pad, the Company varied proppant concentrations to
provide comparative data to evaluate the relationship between frack
size and resource recoveries. While it is early in the life
of the wells, the Company believes that larger fracks should
enhance already strong returns. PQ #25 utilized the largest volume
of proppant per lateral foot of any of the Company’s Cotton Valley
wells and also has the highest initial production rate.
The Company is also evaluating the results of
the micro-seismic work that was performed in connection with the
completion of this three well pad to quantify frack heights and
propagation associated with the varied proppant concentrations
utilized. By monitoring longer term flow rates, decline
profiles and recoveries and assessing the various geophysical and
completion data obtained in connection with this pad, the Company
plans to optimize its completion design in the next generation of
Cotton Valley wells.
The Company has now drilled and completed five
gross wells in connection with its 2017 Cotton Valley drilling
program and is on track to drill and complete four additional gross
wells during 2017 with three gross wells expected to be in progress
at year-end. The Company has reached total depth on a two well pad,
PQ #26 and #27 (average WI: 76%), to test the E-berry bench in the
northern area of its Cotton Valley joint venture acreage and
expects to begin completion operations in approximately three
weeks. The two wells on this pad have an average lateral
length of approximately 6,600 feet. Drilling operations are
commencing on PQ #28 (WI: 75%), which is planned as a 4,700 foot
lateral to develop the E-4 bench. The E-4 bench has delivered
three of the Company’s top five Cotton Valley wells in terms of
reserve recovery per lateral foot.
As a result of better than expected production
from existing wells, as well as performance from the latest three
well pad, the Company is increasing its previously issued
production guidance for the second and third quarters of 2017 as
follows (in MMcfe/d):
|
|
Previous Guidance Range |
|
Revised Guidance Range |
Second Quarter 2017 |
|
62-65 |
|
68-69 |
Third Quarter 2017 |
|
80-84 |
|
85-90 |
The Company currently has approximately 6
MMcfe/d of net production shut-in due to ongoing repairs to a third
party pipeline in the Gulf of Mexico. The Company’s revised third
quarter 2017 production guidance above assumes this production will
be restored on August 1, 2017.
Management’s Comment“One of our
stated goals for 2017 was to double daily production from
approximately 50 MMcfe in December 2016 to approximately 100 MMcfe
by the end of 2017,” said Charles T. Goodson, Chairman, Chief
Executive Officer and President. “With the operational success,
continuous improvement and production growth we have had to date,
we are making great progress toward this goal, which should
ultimately benefit our relative leverage. While we executed
transactions in 2015 and 2016 that reduced debt and extended
maturities, our leverage metrics remained elevated at year-end
2016. By year end 2017, we expect material improvement in
these metrics through organic production growth. Our Cotton Valley
asset will be the primary driver for our growing production profile
and improving debt statistics. This asset is not a shale but a
productive tight sand stone that shares the repeatability attribute
of a traditional resource play but has significantly better
permeability and porosity than a shale. Our geographically
focused asset base continues to benefit from its close proximity to
the Gulf Coast petrochemical corridor where billions of dollars of
upstream investments are being made to upgrade and expand
facilities utilizing readily available regional production.
Additionally, the buildout of LNG export facilities is continuing
and should allow a portion of excess US natural gas production to
seek international pricing, which is currently higher than what is
being received domestically.” About the
CompanyPetroQuest Energy, Inc. is an independent energy
company engaged in the exploration, development, acquisition and
production of oil and natural gas reserves in the Texas, Louisiana
and the shallow waters of the Gulf of Mexico. PetroQuest’s
common stock trades on the New York Stock Exchange under the ticker
PQ.
Forward-Looking StatementsThis news release contains
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other
than statements of historical fact included in this news release
are forward-looking statements. Although the Company believes that
the expectations reflected in these forward-looking statements are
reasonable, these statements are based upon assumptions and
anticipated results that are subject to numerous uncertainties and
risks. Actual results may vary significantly from those anticipated
due to many factors, including the volatility of oil and natural
gas prices and significantly depressed oil prices since the end of
2014; our indebtedness and the significant amount of cash required
to service our indebtedness; our estimate of the sufficiency of our
existing capital sources, including availability under our new
multi-draw term loan facility; our ability to post additional
collateral to satisfy our offshore decommissioning obligations; our
ability to execute our 2017 drilling and recompletion program as
planned and to increase our production; our ability to hedge future
production to reduce our exposure to price volatility in the
current commodity pricing market; our ability to find, develop and
produce oil and natural gas reserves that are economically
recoverable and to replace reserves and sustain and/or increase
production; ceiling test write-downs resulting, and that could
result in the future, from lower oil and natural gas prices; our
ability to raise additional capital to fund cash requirements for
future operations; limits on our growth and our ability to finance
our operations, fund our capital needs and respond to changing
conditions imposed by our multi-draw term loan facility and
restrictive debt covenants; more than 50% of our production being
exposed to the additional risk of severe weather, including
hurricanes, tropical storms and flooding, and natural disasters;
losses and liabilities from uninsured or underinsured drilling and
operating activities; changes in laws and governmental regulations
as they relate to our operations; the operating hazards attendant
to the oil and gas business; the volatility of our stock price; and
our ability to meet the continued listing standards of the New York
Stock Exchange with respect to our common stock or to cure any
deficiency with respect thereto. In particular, careful
consideration should be given to cautionary statements made in the
various reports the Company has filed with the SEC. The Company
undertakes no duty to update or revise these forward-looking
statements.
Click here for more information:
“http://www.petroquest.com/news.html?=BizID=1690&1=1”
For further information, contact:
Matt Quantz, Manager - Corporate Communications
(337) 232-7028, www.petroquest.com