Jones Energy Freezes New Drilling in Western Oklahoma and Texas Panhandle

Optimism still abounds at Jones Energy, the Austin, Texas based independent energy company that is active in western Oklahoma and the Texas Panhandle. The company reported 2015 year-end reserves grew despite a nearly 60 percent cut in the company’s capital spending.

But Jones Energy also indicated “the commodity price environment has become even more challenging during the past few months.”

In other words, prices are so low Jones has decided to hold off on new drilling projects.

“As a team we believe the responsible decision as capital allocators is to hold off on drilling new wells at this time,” stated Johnny Jones, Chairman and CEO in announcing the company’s financial update. “Our valuable hedge position has continued to afford us the luxury of allowing service costs and commodity prices to rebalance before deploying additional drilling and completion capital.”

With new drilling projects on hold, Jones Energy indicated it established an initial capital budget of $25 million for 2016 with the majority dedicated to capital workovers and field optimization activites.

Despite the freeze on new drilling, the company is still confident of surviving the downturn.

“We continue to believe that our multi-year hedge book and significant liquidity have Jones Energy well prepared to weather current market conditions and positioned to seize opportunities to create shareholder value,” said Jones.

The company had focused on the Anadarko and Arkoma basins in Oklahoma and Texas.