Drilling & Completions | Well Cost | Quarterly / Earnings Reports | Third Quarter (3Q) Update | Initial Production Rates | Drilled Uncomplete (DUC) | Drilling Activity

HighPoint's Niobrara / Codell Output Jumps +68% from 2Q18; Completes DUCs

Share Print Bookmark    |    Friday,November 30,2018

HighPoint Resources reported its Q3 2018 results.

Production Highlights:

- Q3 production of 29.7 MBOEPD (up +42% YOY and up +12% from 2Q18)

• Reported production sales volume of 2.74 MMBOE (63% oil) for the third quarter of 2018, represents an increase of 43% from the third quarter of 2017

• Oil production sales volume of 1.72 MMBbls for the third quarter of 2018, represents an increase of 43% from the third quarter of 2017

Niobrara/Codell (Hereford) - Output Jumps +68% Sequentially

• Q3 sales production averaged 4,255 Boe/d (75% oil), which is a 68% increase over the second quarter of 2018.

During the third quarter, 14 wells were spud and 8 wells were placed on flowback, including the initial 5 wells that were drilled and completed by the Company. Drilling operations commenced in April on DSU 11-63-14, which included 10 XRL wells (6 Niobrara and 4 Codell). Drilling was completed in June and flowback began on the initial four wells at the end of September (one well had mechanical issues and is being used as an observation well). The four wells were completed utilizing the Company's standard completion design and modified controlled flowback methodology. Drilling and completion costs for the four wells averaged $5.1 million, which is consistent with cost expectations for the Hereford Field.

Flowback commenced from the nine XRL wells drilled, but not completed, by the previous operator in June and July, respectively. After completing two full quarters since acquisition, early production data has confirmed the Company's acquisition and initial development model, including high oil content, productive deliverability across the acreage position and expectations of completion costs. The wells have exhibited some production variations due to a combination of tighter effective spacing of 18 wells per DSU, mechanical issues, and certain Codell wells being drilled as vertical offsets to Niobrara wells compared to a standard "wine rack" development pattern.

The best performing well is located in DSU 11-63-13 on the eastern portion of the field and has shown strong indications of performance as it reached a peak initial rate of approximately 700 Boe/d (84% oil) from a lateral of 8,377 feet utilizing modified controlled flowback. The well is located adjacent to the initial development wells located in DSU 11-63-14. The Company has also seen solid production from the western portion of the field as one of the DUCs in DSU 11-63-18 reached a peak initial rate of approximately 620 Boe/d (90% oil) utilizing modified controlled flowback. This early well performance, which is located across a six mile section of the Hereford Field, supports the Company's model for the full scale Hereford development program.

Completion operations continue on DSU 11-63-15 (10 XRL wells) and DSU 11-64-23 (3 XRL wells) and it is anticipated that the wells will be placed on flowback during the fourth quarter of 2018. Drilling operations have commenced on DSU 11-63-16 (15 XRL wells).

NE Wattenberg - Output Up +38 YOY

Q3 production of 25,477 Boe/d (61% oil) in the third quarter of 2018 in NE Wattenberg, representing a 38% increase over the third quarter of 2017.

For the third quarter of 2018, the Company drilled 7 XRL wells and placed 19 XRL wells on initial flowback. The Company continues to see strong performance from DSU 5-61-27 (10 XRL wells), which is located in the east-central portion of NE Wattenberg.

Initial flowback began in the second quarter and after six months of production the wells are currently producing approximately 615 Boe/d (80% oil) per well, highlighting the resource opportunity of the remaining 15 undeveloped DSUs in this area of the field.