56 wells planned
Jagged Peak Energy (ticker: JAG) went public less than two months ago, completing its IPO on January 27, 2017. The company reported its offering brought in net proceeds of $397.4 million from the sale of 31.6 million share of stock.
Jagged Peak announced fourth quarter results and reserves yesterday, showing a net loss of $2 million, or ($0.01) per share. Full year results are a loss of $9.8 million, or ($0.05) per share. After adjusting for impairments and other special charges, fourth quarter and full year results are net incomes of $3.9 million and $4.7 million, respectively.
190% reserve growth in 2016
2016 reserves are up to 37,695 MBOE, up from 13,011 MBOE last year. This represents reserve growth of 190% this year. About 81% of the company’s reserves are composed of oil, 11% of reserves are NGLs, and 8% is gas. Most of the addition to reserves was through the drill bit, as Jagged Peak drilled 21 wells and added 25 proved undeveloped locations to generate 25.2 MMBOE of reserves.
Looking at drilling 56 wells in 2017; may add a 6th rig
Jagged Peak anticipates spending between $555 and $605 million in 2017, far above the $215 million spent in 2016. This CapEx is expected to fund drilling about 56 wells and an additional 13 non-operated wells. The company is currently operating five rigs, and may add a sixth later in the year. These wells will fuel production of 17 to 19 MBOEPD, an increase of 221% over 2016 production, the company forecasts.
Wolfcamp
Jagged Peak is a pure Permian operator, with activity in the Delaware Basin. Its recent activities have focused on delineating the eastern edge of the Wolfcamp in its acreage.
Additional pilot programs have evaluated tighter well spacing, which would significantly increase the available drilling locations on the company’s acreage. While the test wells are still in early flowback, preliminary results are encouraging. The company also reports that artificial lift using ESP has produced strong results, exceeding the previous method of gas lift.
