SilverBow Resources Inc., Houston, plans to increase South Texas Eagle Ford and Austin Chalk drilling in 2022 with a capital budget of $180-200 million (some 92% allocated to drilling and completion activity).
The budget provides for 39 gross (33 net) operated wells drilled, compared to 20 gross (18 net) operated wells drilled in 2021. The company intends to run one full rig in 2022, as compared to a 3/4 rig average in 2021, which supports production growth of about 15% year-over-year while maintaining a reinvestment rate of about 70%.
In first-quarter 2022, SilverBow completed one La Mesa Austin Chalk well and is currently completing an eight-well La Mesa pad which is expected to come online in the second quarter. After drilling the La Mesa pad in February, the company's drilling rig will shift to its liquids-weighted assets which is expected to encompass 14 net wells.
About half of the liquids wells to be drilled are a result of new areas and more contiguous acreage positions acquired by SilverBow in 2021. During the third quarter, the company intends to return to its Webb County Gas area and drill its gas-weighted assets through yearend.
For the first quarter of 2022, SilverBow is guiding for estimated production of 220-232 MMcfed, with gas volumes of 167-177 MMcfd.
For full-year 2022, the company expects production of 235-255 MMcfed, with gas volumes of 180-195 MMcfd.
During fourth-quarter 2021, SilverBow completed and brought online five net wells and had net production of 250 MMcfed (74% natural gas). For the full year, the company drilled 18 net wells, completed 24 net wells, and brought 24 net wells online.
The company had net income of $114 million for fourth-quarter 2021 and full-year 2021 net income of $87 million.