Lonestar Resources (ticker: LONE) has made unconventional resource plays its bread and butter with its focus in the Eagle Ford and the Bakken.
Bakken resource evaluation
Lonestar has 28,655 net acres within the Bakken formation located in northern Montana, where the company was, as of the end of Q1, 2017, conducting resource evalution.
Eagle Ford acquisition
Lonestar nearly doubled its footprint in the Eagle Ford play in June, 2017 following the acquisition of 21,238 net acres in the Eagle Ford, for which the company paid approximately $110.6 million to an undisclosed party. The acquisition brought the company’s Eagle Ford assets to 57,330 net acres. The new assets themselves averaged 2,052 BOEPD during Q1, 2017.
The Eagle Ford asset also came with a reported 2P-reserves value of 31.4 MMBOE, as of December, 2016.
Q1 recap
The company’s Q1, 2017 production averaged 5,266 BOEPD. This level of production was up from the previous quarter’s 4,560 BOEPD—Lonestar attributed the growth to the completion of new wells in the Eagle Ford. During Q1, approximately 62% of the produced volume was oil, with 17% composed of natural gas liquids, and the remaining 21% composed of natural gas.
The company intends to drill a total of 12 net wells during 2017.
Assets and production—Eagle Ford
In the western region of Lonestar’s Eagle Ford assets, the Burns Ranch asset is one of the higher-activity locations in the company’s inventory. The company completed three wells in the Burns Ranch location during Q1, 2017, and in doing so utilized a slightly increased stage spacing—300 feet as compared to previous 250 feet—and an increased proppant usage—up to 2,000 pounds per foot.
The company’s Horned Frog location in southern La Salle County holds an inventory of at least 24 extended reach laterals, with lengths between 7,400 and 10,000 feet. Lonestar plans to drill two wells in the second half of 2017 in its Horned Frog location.
The company’s central region in the Eagle Ford acreage holds both the Cyclone and Pirate assets. The Cyclone is capable of accommodating 35 laterals, averaging 8,100 feet in length and, as of mid-May, Lonestar was drilling four extend reach lateral wells, with one well being completed. The company intended to complete two additional wells, following Q1, 2017.
In the Pirate asset—located in Wilson County—Lonestar completed two wells which averaged 429 BOEPD after 25 days of production.
In the eastern Eagle Ford region, Lonestar drilled, completed, and began flowback on one well in the Brazos and Robertson Counties, in May, 2017. Later, in June, 2017, the company announced that the same well produced at a 30-day rate of 2,123 BOEPD. The remainder of the acreage in the area has 38 additional extended reach drilling locations.
Lonestar Resources is presenting at EnerCom’s The Oil & Gas Conference® 22
Lonestar will be a presenting company at the upcoming EnerCom conference in Denver, Colorado—The Oil & Gas Conference® 22.
The conference is EnerCom’s 22nd Denver-based oil and gas focused investor conference, bringing together publicly traded E&Ps and oilfield service and technology companies with institutional investors. The conference will be at the Denver Downtown Westin Hotel, August 13-17, 2017. To register for The Oil & Gas Conference® 22 please visit the conference website.
