Lonestar Resources US Inc., Fort Worth, Tex., plans to spend $45-50 million in 2021 on extended-reach laterals in high-return areas of Horned Frog and Hawkeye in the Eagle Ford shale trend, $11 million of which was spent in first-quarter 2021. The plan is completion of 3 gross/1.5 net wells (DUCs at Dec. 31, 2020) and drilling and completion of an additional 7 gross/5.5 net wells.
Based on the range of spending, the company expects 2021 production of 12,250-12,750 boe/d, with adjusted EBITDAX guidance of $90-100 million and free cash flow of $30-40 million.
Second quarter production is guided at 11,500-12,000 boe/d (53% crude oil, 21% NGLs, 26% natural gas). Production volumes have been favorably impacted by a full-quarter contribution of the Hawkeye #33H, #34H, #35H wells. Horned Frog NW #1H and #2H wells came onstream in April and will contribute for a significant portion of the second quarter, the company said.
Lonestar reported a 29% decrease in net oil and gas production to 10,377 boe/d for first-quarter 2021 compared to 14,436 boe/d for first-quarter 2020. Production was comprised of 75% crude oil and NGLs on an equivalent basis. Modest reductions in oil and gas sales were a result of temporary shut-ins related to Winter Storm Uri.
Since year-end, Lonestar has placed onstream a three-well pad at Hawkeye (50% WI) and a two-well pad at Horned Frog (100% WI). These wells have positively impacted production, with current production exceeding 12,500 boe/d, consisting of 6,500 b/d of oil, 2,700 b/d of NGLs, and 19,800 Mcfd of natural gas.
For the first quarter, the company reported a net loss attributable to its common stockholders of $6.3 million compared to a net loss of $113 million in first-quarter 2020. Adjusted net income for this year’s first quarter was $10.5 million.
Eagle Ford – West
In the western region, which encompasses Dimmit and LaSalle Counties, production for first-quarter 2021 averaged 5,132 boe/d, a 25% decrease from the year ago period.
In March, Lonestar began flowback operations on 2 gross/2 net wells on its Horned Frog West property, the Horned Frog West #1H and #2H. To date, the wells have registered initial production rates averaging 1,517 boe/d.
- Horned Frog West 1H – With a 7,473 ft perforated interval, the #1H recorded initial test rates of 807 b/d of oil, 376 b/d of NGLs, and 2,103 Mcfd, or 1,534 boe/d on a three-stream basis.
- Horned Frog West 2H – With a 7,518 ft perforated interval, the #2H recorded initial test rates of 798 b/d of oil, 363 b/d of NGLs, and 2,036 Mcfd, or 1,501 boe/d on a three-stream basis.
Drilling operations were recently completed on 2 gross/2 net wells on the Horned Frog South property, the Horned Frog Alderman #1H and #2H. Fracture stimulation operations are scheduled to begin later this month with first production expected in July.
Eagle Ford – Central
In the central region, which principally encompasses Gonzales, Karnes, Lavaca, and Fayette Counties, first quarter production averaged 5,008 boe/d, a 31% decrease over year-ago period rates.
In February 2021, Lonestar began flowback operations on 3 gross/1.5 net wells, the Hawkeye 33H, Hawkeye 34H, and Hawkeye 35H. The wells recorded initial rates over a 30-day period of 938 boe/d, 91% of which was crude oil. Recently, Lonestar introduced artificial lift operations on the wells and current production rates are averaging 800 boe/d per well.
- Hawkeye #33H – With a perforated interval of 10,875 ft, the #33H tested 931 b/d of oil, 43 b/d of NGLs, 307 Mcfd, or 1,024 boe/d (three-stream) on a 30/64-in choke.
- Hawkeye #34H – With a perforated interval of 10,770 ft, the #34H tested 774 b/d of oil, 35 b/d of NGLs, 253 Mcfd, or 851 boe/d (three-stream) on a 30/64-in choke.
- Hawkeye #35H – With a perforated interval of 10,821 ft, the #35H tested 769 b/d of oil, 38 b/d of NGLs, 272 Mcfd, or 852 boe/d (three-stream) on a 30/64-in choke.
As part of a joint venture with Marathon Oil Corp., Lonestar, as operator, has permitted a three-well pad on its Hawkeye asset. Lonestar recently commenced drilling operations on three wells, the Hawkeye #9H, #10H, and #11H, with designed perforated intervals exceeding 11,000 ft.
Eagle Ford – East
In the eastern region, first quarter production averaged 236 boe/d, a 10% decrease over year-ago quarter rates. Production consisted of 150 b/d of oil (64%), 47 b/d of NGLs (20%), and 231 Mcfd of natural gas (16%).
