In an announcement on Friday, the company stated that it anticipates second quarter production to exceed 50 thousand barrels of oil equivalent (MBoe) per day, which compares to adjusted guidance of approximately 49 MBoe/d, when accounting for ethane rejection.
The company explained it chose to reject ethane in the month of June which impacts monthly volumes by nearly 3.3 MBoe/d. Previous second quarter guidance of 50 MBoe/d incorporated ethane recover in June.
Additionally, due to drilling and completion costs continuing to trend lower, the Company is projecting CAPEX to come in approximately 10% below original second quarter guidance of $155 million.
The Mad Play unit, along with the Mayes wells from the Earl and Victory Slide units, continue to be strong producing wells. Updated results for these wells are as follows:
- 4-well Mad Play unit had an average per well 30-day IP rate of 1,602 Boe/d (44% oil, 20% NGLs, 36% gas) from a normalized 10,000-foot lateral
- 3 Mayes wells from the Earl unit had an average per well 30-day IP of 1,466 Boe/d (39% oil, 24% NGLs, 37% gas) from a normalized 10,000-foot lateral
- 2 Mayes wells from the Victory Slide pad had an average per well 30-day IP rate of 1,109 Boe/d (71% oil, 14% NGLs, 15% gas) from a normalized 10,000-foot lateral
The Company anticipates 14 gross operated wells to be turned to first sales during June and July. These wells are spaced and being completed in accordance with the Company’s improved development program of 2019 and anticipates strong performance results from this group of wells.
“We remain focused on executing on our development program and achieving free cash flow by the fourth quarter of 2019 while still growing production 20-25% year over year,” said Joseph A. Mills, Roan’s Executive Chairman of the Board. “With respect to operations, based on preliminary results, our second quarter production results are outperforming on a lower capital spend. We are expecting several strong wells to come online through July that will further exemplify the meaningful operational optimizations the Company has made. In addition, the Company remains very engaged with the strategic initiative process with its advisors and has executed multiple NDA’s with interested parties.”
At least one investment firm suggested that Roan Resources had been challenged “due to disappointing drilling results” and that the “price chart of ROAN suggests the company is going out of business.”
But Seeking Alpha also said a new analysis suggested “this will not be the case. Roan should be able to raise debt to provide additional liquidity.”