FANG - Great news in Q1 report
Posted: Sat May 09, 2015 10:09 am
"Initial results from our recent Lower Spraberry wells in Midland County continue to outperform the 990 Mboe type curve prepared by Ryder Scott Company, L.P., or Ryder Scott, our independent reserve engineers. Initial results from our recent Lower Spraberry completions in Martin and Andrews Counties are also exceeding the 810 Mboe Ryder Scott type curve. Throughout Q1 2015, we continued our aggressive pursuit of cost concessions. Current Authorities for Expenditure ("AFEs") for a 7,500 foot lateral are trending below the $6.2 million to $6.7 million well cost range included in our guidance announced earlier this year and are down approximately 20%-30% from the peak last year. We are projecting that at $60/bbl for WTI, our leading edge cost savings and our efficiency gains will allow us to generate estimated project rates of return comparable to those generated when WTI was $75/bbl, but involved higher drilling and completion costs," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, "With the improvement in commodity prices and service costs, we plan to add a second dedicated completion crew in June to work down the inventory of drilled but uncompleted wells. Additionally, if conditions remain positive, we expect to increase our rig count from three to five horizontal rigs later this year. We could potentially add two or three additional rigs in 2016, increasing our rig count to seven or eight. On the results of our strong first quarter and from the anticipated effect of the announced acquisitions, we are increasing 2015 guidance to 29.0 Mboe/d to 31.0 Mboe/d from the 26.0 Mboe/d to 28.0 Mboe/d range previously announced. More than half of the increase is expected to result from continued production strength and completing more wells, while our recent and pending acquisitions are expected to account for the remainder of the projected increase."
Mr. Stice continued, "With the improvement in commodity prices and service costs, we plan to add a second dedicated completion crew in June to work down the inventory of drilled but uncompleted wells. Additionally, if conditions remain positive, we expect to increase our rig count from three to five horizontal rigs later this year. We could potentially add two or three additional rigs in 2016, increasing our rig count to seven or eight. On the results of our strong first quarter and from the anticipated effect of the announced acquisitions, we are increasing 2015 guidance to 29.0 Mboe/d to 31.0 Mboe/d from the 26.0 Mboe/d to 28.0 Mboe/d range previously announced. More than half of the increase is expected to result from continued production strength and completing more wells, while our recent and pending acquisitions are expected to account for the remainder of the projected increase."