WildHorse Resource Development Corp. Announces Construction of In-field Oil & Produced Water Gathering System & Sand Mine Upd...
September 11 2018 - 7:00AM
Business Wire
WildHorse Resource Development Corporation (NYSE: WRD) announced
today plans to construct a wholly-owned in-field oil and produced
water gathering system. The project will be constructed and
operated by WRD with completion expected in mid-2019.
“The construction of an in-field oil and produced water
gathering system will be the first phase in developing a midstream
opportunity which can further improve our already superior
realizations. With an in-field oil gathering system, we can reduce
trucking by delivering our barrels from the wellhead to a central
point in the field,” said Jay Graham, Chairman and Chief Executive
Officer of WRD. “In addition, the oil and produced water gathering
system will lower our lease operating expense on a barrel of oil
equivalent basis and allows us to facilitate completions using
recycled water. Within the next few months, we expect to announce
the second phase of our midstream infrastructure which will include
a third party long-haul pipeline that will connect to a constructed
central terminal and oil gathering system in the field. WRD expects
that these projects will further improve our leading pricing
realizations, reduce LOE, and maintain our advantaged takeaway
capacity. Furthermore, WRD’s in-field sand mine is set to come
online earlier than expected which further improves economics
benefitted by the midstream projects as well.”
The initial phase of construction consists of approximately 50
miles of oil gathering pipeline and approximately 55 miles of water
gathering pipeline. The oil and produced water gathering lines will
utilize the same right-of-way where practical to reduce costs. WRD
estimates construction of the in-field oil and produced water
gathering system to cost approximately $50 million consisting of
approximately $35 million for the oil gathering system, which
includes the central terminal, and approximately $15 million for
the produced water system with an in service date by mid-2019. The
proposed water gathering line is expected to reduce produced water
transportation and disposal costs by approximately 50%, which
equates to an expected $0.25 per boe improvement to LOE. WRD
expects that the gathering system, upon completion of additional
takeaway, will deliver approximately $1.00 per barrel improvement
in realized oil pricing.
WRD is also currently evaluating proposals for the construction
of a third-party long-haul pipeline, the second phase of the
midstream infrastructure project. Upon completion, WRD expects to
have the ability to transport 100% of its oil volumes on pipeline
to premium Gulf Coast markets, including the rapidly growing market
for crude exports. WRD expects to announce this proposal within the
next few months. The third-party long-haul pipeline is expected to
provide further transport cost reductions in addition to the
previously mentioned $1.00 per barrel.
Sand Mine Update
In addition to the midstream projects, WRD is ahead of schedule
on the construction of its in-field sand mine, which was originally
expected to come online by the first quarter of 2019. First sand
loadings are now expected as early as November 1, 2018 and
operational capacity for WRD’s full sand requirements is expected
by November 30, 2018. WRD anticipates completing the sand mine
project within the original guidance range of $65 to $75 million.
WRD expects to save $400K to $600K per well and improve Eagle Ford
IRR’s by up to approximately 16%.
About WildHorse Resource Development
WildHorse Resource Development Corporation is an independent oil
and natural gas company focused on the acquisition, exploration,
development and production of oil, natural gas and NGL properties
primarily in the Eagle Ford Shale and Austin Chalk in East
Texas.
Cautionary Statement Concerning Forward-Looking
Statements
This press release includes "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. Forward-looking statements can be identified by words such
as “anticipates,” “intends,” “will,” “plans,” “seeks,” “believes,”
“estimates,” “could,” “expects” and similar references to future
periods. Such forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond WRD’s control.
All statements, other than historical facts included in this press
release that address activities, events or developments that WRD
expects or anticipates will or may occur in the future are
forward-looking statements. All forward-looking statements speak
only as of the date of this press release. Although WRD believes
that the plans, intentions and expectations reflected in or
suggested by the forward-looking statements are reasonable, there
is no assurance that these plans, intentions or expectations will
be achieved. Therefore, actual outcomes and results could
materially differ from what is expressed, implied or forecast in
such statements.
WRD cautions you that these forward-looking statements are
subject to risks and uncertainties, most of which are difficult to
predict and many of which are beyond WRD’s control, incident to the
exploration for and development, production, gathering and sale of
natural gas and oil. These risks include, but are not limited to:
commodity price volatility; inflation; lack of availability of
drilling and production equipment and services; environmental
risks; drilling and other operating risks; regulatory changes; the
uncertainty inherent in estimating natural gas and oil reserves and
in projecting future rates of production, cash flow and access to
capital; and the timing of development expenditures. Information
concerning these and other factors can be found in WRD’s filings
with the SEC, including its Forms 10-K, 10-Q and 8-K. Consequently,
all of the forward-looking statements made in this press release
are qualified by these cautionary statements and there can be no
assurances that the actual results or developments anticipated by
WRD will be realized, or even if realized, that they will have the
expected consequences to or effects on WRD, its business or
operations. WRD has no intention, and disclaims any obligation, to
update or revise any forward-looking statements, whether as a
result of new information, future results or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20180911005159/en/
WildHorse Resource Development CorporationPearce Hammond, CFA,
(713) 255-7094Vice President, Investor Relations &
Treasurerphammond@wildhorserd.comorVedran Vuk, (713)
255-6962Director, Investor Relationsvvuk@wildhorserd.com
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