PetroQuest Energy Announces Entry Into Central Louisiana Oil Play
December 20 2017 - 4:01PM
PetroQuest Energy, Inc. (NYSE:PQ) announced today its entry into an
oil focused play in central Louisiana targeting the Austin Chalk
formation through the execution of agreements to acquire interests
in approximately 24,600 gross acres. The leasehold
acquisition costs were funded by $8.75 million in proceeds from the
sale of certain of the Company’s water disposal assets in East
Texas, approximately $6 million of cash on hand and the issuance of
2 million shares of the Company’s common stock. The Company
plans to drill its initial horizontal test well during the second
quarter of 2018 utilizing data from existing vertical and unfracked
horizontal wells in the area and from fracked horizontal wells that
are expected to be drilled in the area.
Through geologic and reservoir studies and
analysis of results comparing fracked and unfracked horizontal
Austin Chalk wells in both Texas and now in central Louisiana, the
Company believes that applying modern hydraulic fracturing methods
to this formation provides the opportunity to achieve a substantial
uplift in recoveries versus vintage unfracked horizontal
wells. Based on a comparative analysis between 22 fracked and
hundreds of unfracked Austin Chalk wells drilled in Karnes County,
Texas, fracked horizontal wells achieved an approximate 500%
increase in resource recoveries as compared to unfracked horizontal
wells. The average per well recovery for these fracked wells was in
excess of 600,000 barrels of oil equivalent.
This acreage position is expected to provide
PetroQuest the opportunity to utilize its expertise gained from
operating and/or participating in over 600 horizontal wells in
multiple resource projects. Since selling its Woodford shale assets
in 2015, the Company has shifted its focus to a horizontal Cotton
Valley program in East Texas that is estimated to have over 800
horizontal locations. The emerging Austin Chalk play is expected to
complement the Company’s growing East Texas operations, and could
serve as the catalyst to achieve a balanced commodity mix over the
ensuing years through a project that is expected to offer years of
inventory.
Management’s Comment“We are
excited to have an early, first mover position in this emerging oil
play right in our backyard at a very attractive cost,” said Charles
T. Goodson, Chairman, Chief Executive Officer and President. “Based
on recent well results in the area of our acreage, as well as in
South Texas, the application of contemporary horizontal drilling
and fracking is showing a material impact on resource recovery from
the Austin Chalk formation, which has produced over 1.3 billion
barrels of oil since 1902. Our acreage position is expected
to provide us with a capital allocation option to grow our oil
production, which should complement our gas-weighted Cotton Valley
assets in terms of diversifying our future production mix and cash
flow. These assets are ideally located with available takeaway
options close to the gulf coast refineries and rapidly expanding
options for NGLs and associated natural gas that fit with our
strategy to focus on assets near these key markets.”
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 Statements This 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 multi-draw term
loan facility; our ability to post additional collateral to satisfy
our offshore decommissioning obligations; our ability to fund and
execute our Cotton Valley and Austin Chalk development programs as
planned; our ability to increase recoveries in the Austin Chalk
formation and to increase our overall oil production as planned;
our estimates with respect to fracked Austin Chalk wells in
Louisiana, including production EURs and costs; 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.
For
further information, contact:
|
Matt
Quantz, Manager - Corporate Communications |
|
(337) 232-7028,
www.petroquest.com |