HighPoint Resources Provides Operations Update, including Positive Hereford Field Results and Announces Third Quarter Product...
October 07 2019 - 5:58AM
HighPoint Resources Corporation (“HighPoint” or the “Company”)
(NYSE: HPR) today provided an operations update, including positive
results from the Hereford Field (“Hereford”) and announces third
quarter of 2019 production at the high end of its guidance range.
Highlights include:
- Third quarter production sales volume expected to be 3.4
million barrels of oil equivalent (“MMBoe”), which is a 20%
sequential increase over the second quarter of 2019 and at the high
end of guidance despite depressed processing yields
- Third quarter oil volumes are expected to be 2.18 million
barrels (“MMBbls”) or 64% of total equivalent production sales
volume, which is a 25% sequential increase over the second quarter
of 2019
- Strong operating results from Hereford with wells in DSU
11-63-16 exhibiting a 75% current daily production increase over
previously completed wells
- Early results in DSU 11-63-17 demonstrating 30% higher initial
total fluid productivity compared to DSU 11-63-16
- Continued strong well performance from Northeast (“NE”)
Wattenberg high-fluid intensity completions with wells tracking
above 1 MMBoe type-curve
- Semi-annual borrowing base review recently completed with $500
million credit facility reaffirmed
Chief Executive Officer and President Scot
Woodall commented, “Following up on our solid second quarter
results, we continued to demonstrate strong operational execution
during the third quarter as we anticipate production to be at the
high end of our guidance range, including high oil volumes. This
outperformance was driven primarily by well performance and
completion improvements in Hereford and NE Wattenberg that exceeded
expectations and was achieved despite depressed processing yields,
including basin-wide ethane rejection. We are extremely pleased
with significantly improved results in Hereford and our
optimization program, which is yielding a substantial and
continuous improvement in well productivity and confirms a highly
economic value creation opportunity. This is demonstrated by early
production data as the initial seven wells located on the eastern
portion of DSU 11-63-16 are exhibiting a dramatic current daily
production increase of 75% greater than previously completed wells.
In addition, the wells in DSU 11-63-17 were completed with even
larger fluid volumes and are demonstrating 30% higher total fluid
productivity during early flowback, which is an early positive
indicator of greater stimulated reservoir volume. Production from
these wells continues to ramp and an assessment with respect to
EURs and optimal well spacing will be provided once the wells reach
peak production. We also continue to see positive results in NE
Wattenberg as the seven wells on the western flank of the acreage
continue to track above a 1 MMBoe type-curve. More recently, we
placed seven XRL wells on flowback in DSU 5-61-35 in the central
portion of the field in September that are ramping to peak
production. Furthermore, we remain positioned to generate positive
free cash flow for the remainder of the year and look forward to
providing further updates as we deliver increased value to our
stakeholders.”
Preliminary Third Quarter
Results
The Company expects to report production sales
volume of approximately 3.4 MMBoe (64% oil) for the third
quarter of 2019, which represents 20% sequential growth over the
second quarter of 2019 and is at the high end of the Company’s
guidance range of 3.3-3.4 MMBoe. Oil volumes are expected to be
2.18 MMBbls or 64% of total equivalent production sales volume,
which is a sequential increase of 25% over the second quarter of
2019. The increase in quarter volumes were primarily driven by
strong well performance in Hereford and NE Wattenberg and
completion efficiencies. Third quarter volumes were negatively
impacted by depressed processing yields, including basin-wide
ethane rejection.
Capital expenditures for the third quarter of
2019 are expected to total $76 million, which is at the mid-point
of the Company’s guidance range of $70-$80 million.
Hereford Field
The Company recently completed the
implementation of its extensive reservoir and geologic technical
study of the Hereford Field and is pleased with the initial results
and the immediate performance insights gained during the execution
of the program. This is demonstrated by strong early production
results that are dramatically improved compared to earlier wells.
Specific conclusions reached and implemented include design changes
in fluid volumes and pump rates as well as cluster and stage
spacing that materially increase the stimulated rock volume and
greatly enhance the Company’s ability to deliver an economic and
repeatable development program.
Recent results are highlighted by seven wells
located on the eastern portion of DSU 11-63-16 that were placed on
flowback in June and have the longest production history.
Development consisted of increased well density of 16 wells per
section, incorporated approximately 30 barrels of fluid per lateral
foot and approximately 1,500 pounds of sand per lateral foot. The
completion improvements implemented have resulted in better early
productivity than previously drilled wells and is driving a current
daily production rate increase of approximately 75% compared to
early program wells. In addition, through the initial 105 days of
production, the wells have achieved average cumulative production
of approximately 33,000 barrels of oil per well, which is 22%
higher than previously completed wells. The Company is also
encouraged by the early production profile of the remaining wells
in the program, which include four wells located on the western
portion of DSU 11-63-16 and 12 wells located in DSU 11-63-17. These
wells were stimulated with larger fluid completions than all
previous wells and continue to ramp to peak production after being
placed on flowback in July. The wells are demonstrating 30% higher
initial total fluid productivity compared to DSU 11-63-16 during
initial flowback. This positive increase coupled with higher
observed pressure should be a direct indicator of increased
stimulated reservoir volume supporting higher hydrocarbon
production.
NE Wattenberg
The Company is seeing continued strong well
performance as a result of high-fluid intensity completions as the
seven XRL wells in DSU 4-63-5 on the western flank of its acreage
continue to track above a 1 MMBoe type-curve. These are the first
wells completed by the Company in this area utilizing high-fluid
intensity completions.
The Company also recently placed seven XRL wells
on flowback in DSU 5-61-35 in the central portion of its acreage in
September that are in the early flowback stage.
Borrowing Base
Redetermination
The Company's semi-annual borrowing base review
was recently completed and there were no changes to the terms or
conditions of the $500 million credit facility. As of September 30,
2019, the Company had $175 million outstanding on the credit
facility.
Corporate Presentation
An updated corporate presentation that includes
slides supporting today’s press release has been posted to the
“Investor Relations” section of the Company’s website at
www.hpres.com.
Third Quarter Conference Call and Webcast
The Company plans to issue its third quarter
2019 financial and operating results press release after the market
close on Monday, November 4, 2019. The Company will host a
conference call on Tuesday, November 5, 2019, to discuss the
results. The call is scheduled at 10:00 a.m. Eastern time (8:00
a.m. Mountain time). Please join the webcast conference call live
at www.hpres.com, accessible from the Investor Relations page. To
join by telephone, call 855-760-8152 (631-485-4979 for
international callers) with passcode 6984176. A replay of the call
will be available through November 12, 2019, at 855-859-2056
(404-537-3406 international) with passcode 6984176.
FORWARD LOOKING STATEMENTS
All statements in this press release, other than
statements of historical fact, are forward-looking statements
within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
Words such as expects, forecast, guidance, anticipates, intends,
plans, believes, seeks, estimates and similar expressions or
variations of such words are intended to identify forward-looking
statements herein; however, these are not the exclusive means of
identifying forward-looking statements. Forward-looking statements
in this release relate to, among other things, future production,
projects and opportunities.
These and other forward-looking statements in
this press release are based on management's judgment as of the
date of this release and are subject to numerous risks and
uncertainties. Actual results may vary significantly from those
indicated in the forward-looking statements. Please refer to
HighPoint Resources' Annual Report on Form 10-K for the year ended
December 31, 2018 filed with the SEC, and other filings,
including our Current Reports on Form 8-K and Quarterly Reports on
Form 10-Q, all of which are incorporated by reference herein, for
further discussion of risk factors that may affect the
forward-looking statements. The Company encourages you to consider
the risks and uncertainties associated with projections and other
forward-looking statements and to not place undue reliance on any
such statements. In addition, the Company assumes no obligation to
publicly revise or update any forward-looking statements based on
future events or circumstances. Results presented for the
third quarter of 2019 are preliminary and subject to change as the
Company finalizes its financial statements for the quarter.
ABOUT HIGHPOINT RESOURCES
CORPORATION
HighPoint Resources Corporation (NYSE: HPR) is a
Denver, Colorado based company focused on the development of oil
and natural gas assets located in the Denver-Julesburg Basin of
Colorado. Additional information about the Company may be found on
its website www.hpres.com.
Company contact: Larry C. Busnardo, Vice
President, Investor Relations, 303-312-8514
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