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SilverBow Resources Inc. expects to substantially grow its natural gas and liquids production this year and next and continues to enjoy “favorable basis pricing” in the Eagle Ford Shale, management said.
SilverBow, which operates exclusively in the Eagle Ford and Austin Chalk formations, is targeting year/year production growth of 30% in both 2022 and 2023, said CEO Sean Woolverton upon presenting the firm’s second-quarter results.
The period saw Houston-based SilverBow close its acquisitions of Sundance Energy Inc. and assets of SandPoint Operating LLC, adding to SilverBow’s footprint in South Texas.
“With the closing of the Sundance acquisition, we added a second rig and expect to continue to run at a two-rig pace for the foreseeable future,” said Woolverton. “Given the inventory additions we have made over the last twelve months, SilverBow has over a decade of high-return drilling locations at a two-rig pace.”
The SandPoint and Sundance transactions mark the fourth and fifth acquisitions, respectively, that SilverBow has closed in the last 12 months.
Woolverton added, “Looking ahead, our production is expected to ramp significantly through the second half of 2022 and into 2023. We estimate we will grow second-half 2022 production by more than 35% compared to the first half of 2022, and increase our oil production by 150% over the same time period…The increased liquidity from our upsized borrowing base and our strong cash flow outlook positions SilverBow to fund future growth and continue expanding its portfolio, both through the drill-bit and through accretive acquisitions.”
SilverBow reported net production of 238 MMcfe/d (78% natural gas) during 2Q2022, up from 213 MMcfe/d in 2Q2021.
“Average realized prices for oil and natural gas were 101% and 102% of West Texas Intermediate and Henry Hub, respectively, excluding hedging, as a result of favorable basis pricing in the Eagle Ford,” management said. Hedging losses totaled $66 million for the quarter.
The company posted net income of $88.8 million ($5.05/share) for the three-month span, versus a loss of $19.95 million (minus $1.64) in the year-ago period. Oil and gas sales revenues grew to $182.6 million from $69.9 million.
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Fellow South Texas denizen Magnolia Oil and Gas Corp. also posted “quarterly records for many of our key operating financial metrics,” said CEO Christopher Stavros earlier this month.
The Energy Information Administration is forecasting Eagle Ford natural gas and oil output to rise by 116 MMcf/d and 26,000 b/d, respectively, in September versus August.
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Related topics: Eagle Ford Earnings Exploration And Production Oil And Gas South Texas
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