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Chaparral Energy highlights cube project production in first quarter operational and financial results

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Three rigs drill wells as part of Chaparral Energy's cube project in the Merge Play of the Anadarko Basin in Canadian County earlier this year. The company recently wrapped up drilling and completion work on the project, and saw encouraging results as part of initial production runs during the first quarter involving several of the 11 wells involved. [CHAPARRAL ENERGY]
Three rigs drill wells as part of Chaparral Energy's cube project in the Merge Play of the Anadarko Basin in Canadian County earlier this year. The company recently wrapped up drilling and completion work on the project, and saw encouraging results as part of initial production runs during the first quarter involving several of the 11 wells involved. [CHAPARRAL ENERGY]

Chaparral Energy Corp. on Thursday highlighted strong initial production results from a cube-style development project it recently completed in the Anadarko Basin’s Merge play as part of its first-quarter report covering operational and financial data.

The company reported a net loss of about $104 million, or $2.28 a share, on total revenues of about $49.8 million and adjusted earnings before interest, taxes, depreciation and amortization of about $28.3 million.

In the first quarter of 2018, the company reported a net loss of about $11.4 million, or 25 cents a share, on total revenues of about $59 million and adjusted earnings before interest, taxes, depreciation and amortization of about $29.4 million.

Officials said Chaparral’s bottom line during the first quarter this year was affected by about $51 million in losses through hedging activities and a $49.7 million non-cash charge it incurred because it lowered prices used to create an estimated value on its reserves.

However, the company remained on track operationally, reporting first-quarter daily average total production of 20,800 barrels of oil equivalent, with 15,900 barrels of that coming from its wells in the STACK play of the Anadarko Basin.

Both metrics were within previous guidance the company had issued for the quarter, with officials also noting average daily production from the STACK play was 30% more than what it had been during first-quarter 2018.

Officials said Chaparral’s production mix for the quarter was 33% oil, 27% natural gas liquids and 40% natural gas.

As for its cube-style development project, Chaparral wrapped drilling on its Foraker project in Canadian County during the first quarter of the year. Officials said 11 wells were drilled from three pads to produce from different formations within a mile-square area.

Officials said they completed initial production runs on three of the wells during the first quarter, and that each exceeded their expectations, producing an average of 1,292 barrels of oil (equivalent) daily, where 42% of that was oil.

Initial production runs were started on the other eight wells that are part of that project before the end of the first quarter, they said.

“While we still need more time to assess the detailed results and learnings from this one-mile full section development, the clear enhanced productivity we are seeing provides us with insight into the upside potential of cube style development within our acreage,” Chaparral CEO Earl Reynolds stated in the release.

Chaparral operated four drilling rigs in the first quarter, spending $76.8 million in capital expenditures during the period. Officials said the company cut its number of operated rigs to three in April.

Officials also said the company brought 12 new STACK wells to sales during the quarter.

Reynolds said the company continues to improve its operational excellence by driving down per-foot lateral drilling costs and by boosting drilling and completion efficiencies.

“As we progress through 2019, we will continue to build our knowledge, apply operational efficiencies and implement learnings from our successful spacing tests” to continue those improvements, he said. “We will remain focused on capital discipline and operational execution, which will allow us to continue to grow production and move closer to achieving cash flow neutrality.”

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›

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