September 11, 2018 - 7:00 AM EDT
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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.

WildHorse Resource Development Corporation
Pearce Hammond, CFA, (713) 255-7094
Vice President, Investor Relations & Treasurer
[email protected]
Vedran Vuk, (713) 255-6962
Director, Investor Relations
[email protected]

Source: Business Wire (September 11, 2018 - 7:00 AM EDT)

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