WildHorse Resource Development Corporation Announces Construction of In-field Oil and Produced Water Gathering System and Sand Mine Update
WildHorse Resource Development Corporation (NYSE: WRD) announced today
plans to construct a wholly-owned in-field oil and produced water
gathering system. The project will be constructed and operated by WRD
with completion expected in mid-2019.
“The construction of an in-field oil and produced water gathering system
will be the first phase in developing a midstream opportunity which can
further improve our already superior realizations. With an in-field oil
gathering system, we can reduce trucking by delivering our barrels from
the wellhead to a central point in the field,” said Jay Graham, Chairman
and Chief Executive Officer of WRD. “In addition, the oil and produced
water gathering system will lower our lease operating expense on a
barrel of oil equivalent basis and allows us to facilitate completions
using recycled water. Within the next few months, we expect to announce
the second phase of our midstream infrastructure which will include a
third party long-haul pipeline that will connect to a constructed
central terminal and oil gathering system in the field. WRD expects that
these projects will further improve our leading pricing realizations,
reduce LOE, and maintain our advantaged takeaway capacity. Furthermore,
WRD’s in-field sand mine is set to come online earlier than expected
which further improves economics benefitted by the midstream projects as
well.”
The initial phase of construction consists of approximately 50 miles of
oil gathering pipeline and approximately 55 miles of water gathering
pipeline. The oil and produced water gathering lines will utilize the
same right-of-way where practical to reduce costs. WRD estimates
construction of the in-field oil and produced water gathering system to
cost approximately $50 million consisting of approximately $35 million
for the oil gathering system, which includes the central terminal, and
approximately $15 million for the produced water system with an in
service date by mid-2019. The proposed water gathering line is expected
to reduce produced water transportation and disposal costs by
approximately 50%, which equates to an expected $0.25 per boe
improvement to LOE. WRD expects that the gathering system, upon
completion of additional takeaway, will deliver approximately $1.00 per
barrel improvement in realized oil pricing.
WRD is also currently evaluating proposals for the construction of a
third-party long-haul pipeline, the second phase of the midstream
infrastructure project. Upon completion, WRD expects to have the ability
to transport 100% of its oil volumes on pipeline to premium Gulf Coast
markets, including the rapidly growing market for crude exports. WRD
expects to announce this proposal within the next few months. The
third-party long-haul pipeline is expected to provide further transport
cost reductions in addition to the previously mentioned $1.00 per barrel.
Sand Mine Update
In addition to the midstream projects, WRD is ahead of schedule on the
construction of its in-field sand mine, which was originally expected to
come online by the first quarter of 2019. First sand loadings are now
expected as early as November 1, 2018 and operational capacity for WRD’s
full sand requirements is expected by November 30, 2018. WRD anticipates
completing the sand mine project within the original guidance range of
$65 to $75 million. WRD expects to save $400K to $600K per well and
improve Eagle Ford IRR’s by up to approximately 16%.
About WildHorse Resource Development
WildHorse Resource Development Corporation is an independent oil and
natural gas company focused on the acquisition, exploration, development
and production of oil, natural gas and NGL properties primarily in the
Eagle Ford Shale and Austin Chalk in East Texas.
Cautionary Statement Concerning Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements can be identified by words such as
“anticipates,” “intends,” “will,” “plans,” “seeks,” “believes,”
“estimates,” “could,” “expects” and similar references to future
periods. Such forward-looking statements are subject to a number of
risks and uncertainties, many of which are beyond WRD’s control. All
statements, other than historical facts included in this press release
that address activities, events or developments that WRD expects or
anticipates will or may occur in the future are forward-looking
statements. All forward-looking statements speak only as of the date of
this press release. Although WRD believes that the plans, intentions and
expectations reflected in or suggested by the forward-looking statements
are reasonable, there is no assurance that these plans, intentions or
expectations will be achieved. Therefore, actual outcomes and results
could materially differ from what is expressed, implied or forecast in
such statements.
WRD cautions you that these forward-looking statements are subject to
risks and uncertainties, most of which are difficult to predict and many
of which are beyond WRD’s control, incident to the exploration for and
development, production, gathering and sale of natural gas and oil.
These risks include, but are not limited to: commodity price volatility;
inflation; lack of availability of drilling and production equipment and
services; environmental risks; drilling and other operating risks;
regulatory changes; the uncertainty inherent in estimating natural gas
and oil reserves and in projecting future rates of production, cash flow
and access to capital; and the timing of development expenditures.
Information concerning these and other factors can be found in WRD’s
filings with the SEC, including its Forms 10-K, 10-Q and 8-K.
Consequently, all of the forward-looking statements made in this press
release are qualified by these cautionary statements and there can be no
assurances that the actual results or developments anticipated by WRD
will be realized, or even if realized, that they will have the expected
consequences to or effects on WRD, its business or operations. WRD has
no intention, and disclaims any obligation, to update or revise any
forward-looking statements, whether as a result of new information,
future results or otherwise.
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