Exploration & Production | Capital Markets | Capital Expenditure
Is Goodrich Ditching Eagle Ford for the Tuscaloosa Marine Shale?
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Goodrich Petroleum's latest announcement, which featured a rig addition and increased spending in the Tuscaloosa Marine Shale play, hints that the company is looking to shift its E&P strategy in the coming year.
Previously focused on Texas' Eagle Ford Shale (see 2013 CapEx below), Goodrich is allocating a large portion of its estimated 2014 CapEx to the TMS (the play only received 28% of the company's 2013 CapEx). Additionally, the company hopes to have five active rigs in the play by the end of 2014, which further signals its shift in focus.
Goodrich's TMS Position
Over the past year, the company has pulled together a large leasehold in the TMS play, which has far surpassed its holdings in the Eagle Ford.
Goodrich's Recent TMS Transactions:
- 74,000 net acres - Acquired by Goodrich on June 13, 2011
- 277,000 net acres - Acquired by Goodrich on July 22, 2013
In addition to commanding a massive TMS leasehold, Goodrich has seen strong well results from its wells in the past year. In May 2013, the company touted its production in the TMS, hitting the 75,000 BOE milestone in just three months.
Graphs from Goodrich's most recent corporate presentation also confirm the play's promise.
Well Results by Acreage Location
Click here for full size image.
Tuscaloosa Marine Shale Well IP Rates
The following chart outlines well results in the play from numerous operators. Goodrich has been behind the most successful TMS well to date (the Crosby Minerals 12-1 H1).
Cumulative Production
Goodrich's strategy shift might be most attributable to the long-term production potential of the TMS play.
Access Goodrich's full presentation on the Tuscaloosa Marine Shale here.