HOUSTON, Jan. 18, 2018 (GLOBE NEWSWIRE) — Rosehill Resources Inc. (“Rosehill” or the “Company”) (NASDAQ:ROSE) (NASDAQ:ROSEW) (NASDAQ:ROSEU) announced year-end 2017 proved reserves rose to 31.1 million barrels of oil equivalent (“MMBOE”), up 135% from 13.2 MMBOE at year-end 2016. Rosehill’s reserve estimates as of December 31, 2017 and 2016 were prepared by Ryder Scott Company, L.P. The Company also provides a brief operational update focused on the preliminary development plan of the White Wolf acquisition acreage in 2018.
Highlights and Recent Key Items:
- Increased proved reserves to 31.1 MMBOE (determined under SEC guidelines) with a PV-10 of $368 million at year-end 2017, up 135% and 353%, respectively, from December 31, 2016 (see Non-GAAP Measure disclosure below for discussion of PV-10);
- Proved reserve additions of 21.1 MMBOE resulted in a reserve replacement ratio of 997% (total of extensions, discoveries, revisions, and purchases, divided by annual production using midpoint of 2017 guidance);
- Year-end reserves had no amounts attributable to the recent White Wolf acquisition in Pecos County, Texas; and
- Drilling on new White Wolf acquisition acreage to begin in late first quarter or early second quarter of 2018.
J.A. (Alan) Townsend, Rosehill’s President and Chief Executive Officer, commented, “We are very pleased with the substantial growth we achieved in our proved reserves during 2017. This reserve growth translates to strong production increases, which is highlighted in our 2018 guidance and 2019 preliminary forecast. As we further validate our Gen 3 type curves, we should continue to see positive revisions to our current booked reserves. In December, we closed on the White Wolf acquisition which has more than doubled our acreage position and potential locations, but the 2017 year-end reserves have no amounts attributable to this acquisition. Our total proved, probable and possible reserves totaled 105.9 MMBOE, and as we continue drilling in our Loving Country area and begin to prove-up the White Wolf acreage in 2018, we expect significant reserve growth throughout 2018.
We are very optimistic as we enter 2018 based on our significant ongoing operational success and stronger oil prices. We spent 2017 ramping up production and that will continue in 2018 as we will be getting to a size and scale that adds operational and financial efficiencies that will allow us to add significant value to our shareholders.”
Rosehill’s proved reserves increased 135% from year-end 2016 to 31.1 MMBOE at December 31, 2017, consisting of 59% oil, 20% natural gas liquids (“NGLs”) and 21% natural gas. The Company’s probable and possible reserves at December 31, 2017 were 3.1 MMBOE and 71.6 MMBOE, respectively.
The PV-10 value at SEC pricing of $51.34 per barrel of oil, $31.82 per barrel of NGLs and $2.98 per thousand cubic feet of natural gas increased 353% from December 31, 2016 to $368 million. In 2017, the Company added 18.0 MMBOE of reserves through extensions and discoveries, 2.6 MMBOE through positive revisions and 0.5 MMBOE through acquisitions. These additions were slightly offset by the divestiture of its Barnett Shale reserves of 1.0 MMBOE and preliminary 2017 production estimate of 2.1 MMBOE. All of Rosehill’s reserves are now located in the Delaware Basin. The 2017 reserve estimates do not include any reserves attributable to the net acreage purchased in the White Wolf acquisition that the Company closed in December 2017.
In late December, the Company’s net daily production exceeded 10,000 net BOE. This rate is expected to fluctuate this month with impacts in daily rates due to weather and simultaneous operations downtime and several new wells coming on line. Rosehill continues to demonstrate and expect strong production growth in 2018 and beyond and currently has two rigs drilling and one dedicated frac crew.
The Company has created a preliminary development plan for the recently acquired White Wolf acreage in Pecos County. Rosehill is beginning facility and location work in February and the first well is expected to spud in the White Wolf area in late first quarter or early second quarter, with early well results expected this summer. The Company expects its 2018 plans in the White Wolf acreage will include horizontal wells in the Wolfcamp A and Wolfcamp B horizons, drilling extended laterals, gathering significant data and performing scientific analysis.
Rosehill has posted an updated investor presentation, on the Company’s website www.rosehillresources.com, with additional details on the reserve and operational updates discussed above.
About Rosehill Resources Inc.
Rosehill Resources Inc. is an oil and gas exploration company with producing assets in Texas and New Mexico with its investment activity focused in the Delaware Basin portion of the Permian Basin. The Company’s strategy for growth includes the organic development of its two core acreage areas in Loving and Lea counties, and Pecos and Reeves counties, as well as focused acquisitions in the Delaware Basin.