January 23, 2017 - 6:59 PM EST
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Lonestar Resources US, Inc. Provides Updates On New Production Tests And Increased Hedging

FORT WORTH, Texas, Jan. 23, 2017 /PRNewswire/ -- Lonestar Resources US, Inc. (NASDAQ: LONE) (together with its subsidiaries, "Lonestar") announced today the initial production test results on its Burns Ranch wells and the addition of new crude oil hedges. 

Lonestar recently commenced flowback operations on its Burns Ranch #8H, #9H and #10H wells.  While an average of 5% of the frac load has been recovered from each of these wells thus far, preliminary production data from these wells is encouraging.  In its recently-completed wells ("Gen 5"), Lonestar utilized longer lateral lengths, engineered completions using diverters, and in two of the wells, higher proppant concentrations than its first set of wells drilled at Burns Ranch in 2015 ("Gen 3").  The Company has registered 24-hour test rates of 723 barrels of oil equivalent per day (BOE per day) on the #8H well, which has a perforated lateral length of 9,518 feet and was fracture stimulated with a proppant concentration of 1,487 pounds per foot.  The #9H well, which has a perforated lateral length of 9,449 feet and was fracture stimulated with a proppant concentration of 2,005 pounds per foot, registered a 24-hour test rate of 831 BOE per day.  24-hour test rates on the #10H well were 789 BOE per day, which has a perforated lateral length of 8,456 feet and was fracture stimulated with a proppant concentration of 2,025 pounds per foot. It should be noted that oil cuts currently average 35% among the three wells, and the wells are being choke-managed to restrict gas-oil ratios. 

While the production results are preliminary, Lonestar is encouraged by the fact that the oil produced thus far on its three new Gen 5 wells exceeds the oil produced of its offsetting Gen 3 wells by 25%, on average, despite being currently produced on a smaller choke.  Further, oil produced per lateral foot thus far on its Gen 5 wells exceeds the oil produced per lateral foot of its offsetting Gen 3 wells by 12%, on average.         

Since December 31, 2016, Lonestar has added to its hedge positions for both 2017 and 2018. For calendar 2017, the Company added 377 barrels per day of crude oil swaps at an average price of $56.00 per barrel. For calendar 2018, the Company added 1,000 barrels per day of crude oil swaps at an average price of $55.60 per barrel. The Company also entered into a costless collar for 500 barrels per day at a floor of $50.00 per barrel and a ceiling of $59.45 per barrel.  Table 1 below provides a detailed schedule of Lonestar's hedge positions, which total 2,877 barrels per day in 2017 and 2,500 barrels per day in 2018. Lonestar's current natural gas hedge positions are comprised of a swap for 7,000 MMBTU per day at a price of $3.36 for 2017.

Table 1: Lonestar Resources US, Inc. Crude Oil and Natural Gas Hedge Table




Volume



Settlement Period

Derivative Instrument

(bbls)

 (bbls/day)

Fixed Price


January - December 2017

Oil- WTI Fixed Price Swap

109,500

300

$51.05


January - December 2017

Oil- WTI Fixed Price Swap

73,000

200

$50.60


January - December 2017

Oil- WTI Fixed Price Swap

365,000

1,000

$52.90


April - December 2017

Oil- WTI Fixed Price Swap

137,500

377

$56.00


January - December 2018

Oil- WTI Fixed Price Swap

365,000

1,000

$54.18


January - December 2018

Oil- WTI Fixed Price Swap

182,500

500

$55.65


January - December 2018

Oil- WTI Fixed Price Swap

182,500

500

$55.55








Settlement Period

Derivative Instrument

(bbls)

 (bbls/day)

Put(s)

Calls

January - December 2017

Oil- 3-Way Collar

365,100

1,000

$40.00 / $60.00

$85.00

January - December 2018

Oil- 2-Way Collar

182,500

500

$50.00

$59.45









Volume



Settlement Period

Derivative Instrument

(MMBTU)

 (MMBTU/day)

Fixed Price


January - December 2017

Natural Gas- NYMEX Fixed Price Swap

2,555,000

7,000

$3.36


 

Cautionary & Forward Looking Statements

Lonestar Resources US, Inc. cautions that this press release contains forward-looking statements, including, but not limited to, statements about the new chairman's expertise, ability and anticipated contributions to Lonestar; Lonestar's execution of its growth strategies; growth in Lonestar's leasehold, reserves and asset value; and Lonestar's ability to create shareholder value. These statements involve substantial known and unknown risks, uncertainties and other important factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following:  volatility of oil, natural gas and NGL prices, and potential write-down of the carrying values of crude oil and natural gas properties; inability to successfully replace proved producing reserves; substantial capital expenditures required for exploration, development and exploitation projects; potential liabilities resulting from operating hazards, natural disasters or other interruptions; risks related using the latest available horizontal drilling and completion techniques; uncertainties tied to lengthy period of development of identified drilling locations; unexpected delays and cost overrun related to the development of estimated proved undeveloped reserves; concentration risk related to properties, which are located primarily in the Eagle Ford Shale of South Texas; loss of lease on undeveloped leasehold acreage that may result from lack of development or commercialization; inaccuracies in assumptions made in estimating proved reserves; our limited control over activities in properties Lonestar does not operate; potential inconsistency between the present value of future net revenues from our proved reserves and the current market value of our estimated oil and natural gas reserves; risks related to derivative activities; losses resulting from title deficiencies; risks related to health, safety and environmental laws and regulations; additional regulation of hydraulic fracturing; reduced demand for crude oil, natural gas and NGLs resulting from conservation measures and technological advances; inability to acquire adequate supplies of water for our drilling operations or to dispose of or recycle the used water economically and in an environmentally safe manner; climate change laws and regulations restricting emissions of "greenhouse gases" that may increase operating costs and reduce demand for the crude oil and natural gas; fluctuations in the differential between benchmark prices of crude oil and natural gas and the reference or regional index price used to price actual crude oil and natural gas sales; and the other important factors discussed under the caption "Risk Factors" in our Registration Statement on Form 10, as amended and filed with the Securities and Exchange Commission, or the SEC, on June 9, 2016, our Quarterly Reports on Form 10-Q filed with the SEC, as well as other documents that we may file from time to time with the SEC. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. The forward-looking statements in this presentation represent our views as of the date of this presentation. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this presentation.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lonestar-resources-us-inc-provides-updates-on-new-production-tests-and-increased-hedging-300395162.html

SOURCE Lonestar Resources US, Inc.


Source: PR Newswire (January 23, 2017 - 6:59 PM EST)

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