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Rosehill's Drilling Up 22% YOY While Completions Drop 33%; ESPs Pay Off

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   |    Tuesday,May 21,2019

Rosehill Resources Inc. reported its Q1 2019 results. Here are the highlights from its report and presentation.

Q1 Summary: Drilling Up 22% While Completions Fall 33%

  • Q1 Production: 21.5 MBOEPD (70% oil) - this is up +75% YOY
  • Rigs: Two rigs running (flat YOY)
  • Well Activity: Drilled 11 wells (up 22% YOY) / Completed six wells (down 33% YOY)

Drill Times Down 31% from 2018; Well Costs Drop 14%

Improved efficiencies in Southern Delaware from reducing drilling times to 14.7 days per well in the first quarter, down 31% from full-year 2018.

Rosehill also reduced most recent one-mile Southern Delaware well cost to approximately $6.9 million per well - this is down 14% compared to $8.0 million per well for initial wells drilled in 2018.

Well Results - ESP Installation Boosts Results; Will Add More

Southern Delaware - In the Southern Delaware, the Company recently placed six wells onto production. As previously indicated, the Company installed ESPs on each of these wells shortly after initial flowback in order to enhance economics and optimize each well's production profile.

The IP24 results from ESP installation for these six wells averaged 1,152 BOEPD, or 252 BOEPD per 1,000 feet, and are presented in the table below.

        IP24 IP24  
    Well Formation BOEPD BOEPD per 1,000' LL Oil %
    State Blanco 58 G003 Wolfcamp A 938 230 88 %
    State Blanco 58 H001 Wolfcamp B 1,055 230 88 %
    State Blanco 58 G001 Wolfcamp B 1,088 247 91 %
    Trees Estate 77 A001 Wolfcamp B 1,115 238 92 %
    Trees Estate 77 H001 Wolfcamp A 1,428 300 89 %
    Trees Estate 77 H003 Wolfcamp B 1,290 269 93 %

Northern Delaware - In the Northern Delaware, the Company placed on production the Z&T 20 E006 in late April targeting the 2nd Bone Spring Sand formation. The well reached an IP 7 of 1,457 BOEPD, 73% oil, or 331 BOEPD per 1,000 feet.

Based on success with the first ESP installation on a mature well in the Northern Delaware area, the Company installed an ESP in April on the Weber 26 G001 well (Lower Wolfcamp A formation) which was first placed on production in January 2017. Shortly after installation of the ESP, the well reached production of 501 BOEPD, which is more than double the rate just prior to installation, representing a significant uplift to the well's forecasted production profile.

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