By July 28, 2015 Read More →

Goodrich Petroleum sells Eagle Ford assets, retains acreage for future

Goodrich Petroleum intends to pay down debt, drive down drilling and operating costs even further – president

Goodrich Petroleum is selling acreage in the Eagle Ford Shale for $118 million, but keeping some of the undeveloped leasehold for future development or sale, the company announced Monday.

Goodrich Petroleum

Robert Turnham, Goodrich Petroleum.

“The monetization of our proved reserves and associated acreage from our drilling efforts to date greatly improves our liquidity while maintaining a position in the Eagle Ford for future development or sale,” said Robert Turnham, Goodrich Petroleum president.

The asset being sold produced an average of approximately 2,850 barrels of oil equivalent (“Boe”) per day (~75% oil) during the first quarter of 2015, the company said in a release.

The acreage is located in the LaSalle and Frio Counties and the effective date of the transaction is July 1, 2015 with an expected closing date on or before Sept. 4. The sale is subject to purchase price adjustments as provided for in the purchase and sale agreement.

Goodrich Petroleum is retaining approximately 58 per cent (~ 17,000 net acres) of its undeveloped leasehold in the play for future development or sale.

“Acreage retention was an important aspect of this transaction for us as it allows for additional future value creation from the asset in what we believe will be an improved oil price environment,” said Turnham.

Goodrich Petroleum expects to book a gain of approximately $50-60 million on the sale at closing after factoring in customary closing adjustments and plans to pay off its bank revolver and retain the difference in cash from the sales proceeds.

“The ability to pay off our bank debt and book the difference in cash in this difficult commodity cycle is an obvious benefit of the transaction as well,” said Turnham.

“We continue to drive our well costs lower yet will remain conservative with our activity level, as we reiterate our full year capital expenditure budget of approximately $100 million, with sharply reduced capital expenditures in the last three quarters of the year.”

Posted in: Energy Financial

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