SilverBow Resources Announces 2018 Capital Program and Guidance
January 17 2018 - 4:30PM
Business Wire
Accelerates Activity in the Eagle
Ford
SilverBow Resources, Inc. (NYSE: SBOW) (“SilverBow” or “the
Company”) today provided its 2018 capital program of $245-$265
million. For 2018, total Company production is projected to average
175-195 million cubic feet of natural gas equivalent per day
(“Mmcfe/d”), an increase of approximately 25-40% from 2017 levels,
adjusted for small noncore divestitures in 2017 and the Olmos
divestiture planned for the first quarter 2018.
2018 Capital Program
Overview
- Capital expenditures of $245-$265
million
- 70% of capital expenditures allocated
towards drilling and completions
- Planned addition of second rig in
second quarter
- Average net production of approximately
175-195 Mmcfe/d (1)
- 30-32 net wells drilled in 2018
compared to approximately 18 net wells in 2017
Sean Woolverton, SilverBow’s Chief Executive Officer, commented,
“Our team did a tremendous job executing on multiple fronts in
2017, including prosecuting a successful delineation drilling
campaign, adding over 35,000 high-graded acres to our leasehold
position at an attractive cost, and increasing our liquidity to
approximately $250 million. On the success of our 2017 activities,
we have elected to add a second rig to our drilling program early
in the second quarter.”
Woolverton added, “Our focus for 2018 now shifts to development
as we plan to exploit our Eagle Ford asset base with a commitment
to becoming a low cost operator in the region. Our current business
plan positions us for significant value-added growth in 2018 and
beyond. With our strong balance sheet, growing production and
increasing cash flow, we have significant liquidity to fund our
investments in production growth and inventory. Importantly, our
business plan is fully funded with a decreasing leverage ratio and
significant financial flexibility as we look to achieve positive
cash flow in late 2019.”
The 2018 capital budget of $245 to $265 million provides for 30
to 32 net operated wells drilled compared to approximately 18 net
operated wells in 2017. Approximately 70% of the 2018 capital
budget is allocated towards drilling and completion capital, driven
primarily by activity in Fasken (13 net wells drilled), AWP (7 net
wells drilled), and Oro Grande (5 net wells drilled). Due to the
timing of the back-end loaded drilling and completions program, the
Company will bring 25 to 26 net wells to sales in 2018 compared to
approximately 22 net wells in 2017. The Company plans to end 2018
with an inventory of 10 to 12 drilled but uncompleted wells
(“DUCs”) compared to 6 DUCs at the end of 2017.
This drilling program provides for average production of 175-195
Mmcfe/d in 2018, as adjusted for small divestitures in 2017 and the
planned Olmos divestiture in the first quarter of 2018. These
noncore properties contributed approximately 10.5 Mmcfe/d of
production in 2017 through September 30.
SilverBow expects further improvements in drilling and
completion efficiencies in 2018 given the increased activity level
combined with a greater focus on pad drilling. The Company
continues to focus on longer laterals and optimized
completions.
The company expanded its Eagle Ford footprint by over 50% in
2017, through a combination of an aggressive leasing campaign and
strategically acquiring bolt-on producing acreage in our core AWP
area. Specifically, the Company spent approximately $50 million on
acquiring over 35,000 acres, primarily throughout the gas and rich
gas windows of the Eagle Ford. SilverBow anticipates spending
20-25% of the 2018 drilling and completions budget on this acquired
acreage. SilverBow plans to continue acquiring acreage in the core
of its Eagle Ford leasehold positions during 2018 and has budgeted
approximately $20-$30 million for core leasehold additions and
extensions. The Company does not budget for acquisitions.
The 2018 budget is expected to be fully funded through cash flow
from operations and available borrowing capacity within the
Company’s revolving credit facility. As of September 30, 2017,
SilverBow had approximately $250 million of available liquidity,
pro forma for the December 2017 Second Lien Senior Notes.
The Company plans on providing detailed first quarter and
full-year 2018 guidance on the fourth quarter 2017 earnings
conference call. For more information regarding the Company’s 2018
capital program and guidance, please see the Corporate Presentation
in the Investor Relations section on the Company’s website at
www.sbow.com.
(1) Adjusted for non-core divestitures in 2017 and the Olmos
divestiture planned for 1Q18. Together, these properties
contributed approximately 10.5 Mmcfe/d to total production during
2017 through September 30.
About SilverBow Resources
SilverBow Resources (NYSE: SBOW) is a Houston-based energy
company actively engaged in the exploration, development, and
production of oil and gas from the Eagle Ford Shale in South Texas.
With almost 30 years of history operating in South Texas, the
Company possesses a significant understanding of regional
reservoirs which we leverage to assemble high quality drilling
inventory while continuously enhancing our operations to maximize
returns on capital invested.
Forward-Looking Statements
This 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.
The opinions, forecasts, projections, or other statements other
than statements of historical fact, are forward-looking statements.
Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, no assurances can
be given that such expectations will prove to have been correct.
Certain risks and uncertainties inherent in the company’s business
are set forth in the filings of SilverBow Resources, Inc. with the
Securities and Exchange Commission.
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version on businesswire.com: http://www.businesswire.com/news/home/20180117006452/en/
SilverBow Resources, Inc.Doug Atkinson, CFA, 281-874-2700,
800-777-2412Senior Manager – Finance & Investor Relations
SilverBow Resources (NYSE:SBOW)
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