FORTH WORTH, Texas, Sept. 29, 2015 /PRNewswire/ — Lonestar Resources, Ltd. (ASX: LNR, OTCQX: LNREF) is pleased to provide an operations update to its investors. Underpinned by the outperformance of the wells drilled in its 2015 Eagle Ford Shale drilling program, Lonestar now projects that its net production for the third quarter of 2015 will average 6,500 BOE per day, representing a 39% increase in production over prior year results. Third quarter 2015 production results mark a new record for Lonestar, and also represent an approximate 12% sequential increase in production over second quarter 2015 results.
Production growth in the Company’s focus area of the Eagle Ford Shale is higher than Lonestar’s totals. The Company now projects that its record-setting Eagle Ford Shale production increased approximately 48% year-over-year in the third quarter of 2015, and 15% sequentially over 2Q15 results.
Lonestar’s production momentum is continuing into the fourth quarter of 2015, with 3Q15 exit rates expected to average in excess of 7,000 BOE per day. Based on the Company’s ongoing performance, Lonestar is increasing its 2015 production guidance, from a range of 5,700 to 6,100 BOE per day, to a range of 5,900 to 6,300 BOEPD.
Lonestar’s financial results will not only be helped by strong volumes but by also by its hedging policy. Lonestar projects that its EBITDAX will range from $21 to $22 million in the third quarter of 2015, flat with 2Q15 EBITDAX results, in spite of a $12.00 per barrel decline in West Texas Intermediate oil prices during the same period. Importantly, Lonestar’s hedge portfolio extends well beyond 2015. Currently, Lonestar has NYMEX swaps covering 2,276 barrels of oil per day over 2016 at a price of $77.15 per barrel, which equates to more than half of its projected 2016 crude oil volumes, and providing the Company with significant crude oil price insulation beyond that enjoyed by many of its peers.
While its production growth is significant, Lonestar’s capital expenditures reflect continued discipline, with 2015 capital expenditures on drilling and well completions held within operational cash flows. This will ensure the Company maintains the majority of $100 million of available liquidity associated with the undrawn portion of its Senior Secured Revolving Credit Facility. Accordingly, Lonestar expects the outstanding balance on its bank debt to be $79 million at September 30, 2015. This reflects a modest increase of $3 million over the balance at June 30, 2015 of $76 million, with most of the incremental spending being applied to Eagle Ford lease acquisition costs and the Company’s 3-D seismic survey in Brazos County.
Lonestar’s Chief Executive Officer, Frank D. Bracken, III, commented, “Lonestar’s continued growth in this difficult environment is confirmation that our team is executing at a high level, bringing wells onstream within budget and at production rates that exceed our forecast. Moreover, this growth is being achieved with capital discipline and balance sheet management, which is critical in the current macro backdrop. Our strong operational results are far from being reflected in the way the equity market is valuing our stock, so we are in the working to obtain a main board NYSE or NASDAQ listing in the United States that will put us on more equal footing with our peers.”
SOURCE Lonestar Resources, Ltd.