SilverBow Resources Inc. expects 2022 capital expenditures of $300-330 million to deliver 272-282 MMcfed in total production after incorporating SandPoint Operating LLC resources in mid-May and Sundance Energy Inc. assets beginning this month.
The Houston-based company provided an updated outlook July 5 following closing of its deals, announced in May, to acquire liquids-weighted assets in the western Eagle Ford from the two companies (OGJ Online, May 2, 2022).
SilverBow estimates its average daily production for second-quarter 2022 to be 236-238 MMcfed (78% gas) which includes 51 days of production from the SandPoint assets. The company expects to exit December producing about 350 MMcfed—a 25% increase to its average daily production in June.
Effective with the Sundance acquisition, SilverBow is running two drilling rigs, one dedicated to its oily acreage and the other rig primarily focused on the gas portfolio, the company said.
An investment of $90-110 million is expected in this year’s third quarter to deliver total production of 293-308 MMcfe/d (68% gas).
Production in 2023 is expected to grow by over 35% year-over-year to an annualized production volume of 63,000 boe/d, which reflects SilverBow’s two-rig development program and a full year of contributions from the acquired assets, the company said in the July 5 release.
“Our multi-year growth profile is significant, as we estimate we will grow annual production 30% or more in both 2022 and 2023. Our increased scale is supported by over 600 high-return locations, providing over a decade of drilling inventory at a two-rig pace and operating cash flows that fund our development plan at a re-investment rate of approximately 60%,” said Sean Woolverton, chief executive officer.