DENVER, June 10, 2015 /PRNewswire/ -- Bill Barrett
Corporation (the "Company") (NYSE: BBG) announced today that it is
increasing its 2015 capital program to expand and accelerate its
extended reach lateral ("XRL") drilling program in the Northeast
("NE") Wattenberg area of the Denver-Julesburg ("DJ") Basin and is establishing an
initial 2016 production growth range.
The increased activity will include adding a second rig in the
NE Wattenberg area early in the third quarter of 2015 that the
Company expects will spud an additional 11 gross (8 net) operated
XRL wells in the second half of 2015. The Company now
anticipates participating in 35-40 gross (28-32 net) operated
development wells in the NE Wattenberg area during 2015, most of
which are XRL wells. The increased development activity will
contribute only slightly to 2015 production due to the timing of
completions associated with multi-well pad drilling, but is
expected to have a greater impact in 2016 and DJ Basin production
is anticipated to grow in excess of 60% and 25% in 2015 and 2016,
respectively. Incorporating the higher level of activity, the
Company is increasing its 2015 production guidance to 6.0-6.4 MMBoe
and raising its capital expenditure guidance to $320-$350 million, which includes capital for the
second rig in NE Wattenberg, additional working interests in wells,
and a small number of obligation wells related to the retention of
leaseholds. The Company is also providing an initial 2016
corporate production growth target of 10%-15% over 2015 based on an
indicative 2016 capital spending level of between $225-$275 million, which assumes approximately 40
gross (32 net) operated XRL wells utilizing a two-rig drilling
program at current service cost levels and is subject to board
approval during the normal budgeting cycle.
Chief Executive Officer and President Scot Woodall commented, "We continue gaining
operational momentum based on the results of our XRL drilling
program. The initial thirty-day production data from our
latest completion design is yielding improved early well
performance and attractive returns of nearly 40%1 at
current commodity prices. With a large and significant
opportunity set in front of us, we recognize the benefit of
increasing our XRL activity at this time to be better positioned
for increased production growth and stronger cash flows in
2016. We expect DJ Basin production to significantly increase
as the full benefit of adding the second rig is realized. Our
financial position remains strong and is supported by an undrawn
revolving credit facility and a significant cash position. We
also have over 90% of our 2015 oil and natural gas production and
nearly half of 2016 hedged at favorable commodity prices. We
will remain capital disciplined and flexible in our capital
policies as we utilize a two-rig program to efficiently create
value from our DJ Basin acreage position."
The capital budget is expected to be funded internally through
operating cash flow, cash on hand, borrowings under the Company's
revolving credit facility, non-core asset divestitures and sales of
common stock from time to time.
1 Calculated for an XRL well utilizing a 9,500'
lateral, 55-stage plug-and-perf completion, $6.25 million well cost, flat pricing of
$65 NYMEX oil & $3.25 NYMEX gas and incorporates a $9/bbl long-term oil price differential
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall there be
any sale of any such securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are subject to events, risks and
uncertainties that may be outside the Company's control. Actual
results could differ materially from those discussed in the
forward-looking statements. In particular, the Company is providing
2015 and 2016 operating guidance, which contains projections for
certain 2015 and 2016 operational and financial metrics.
These and other forward-looking statements herein are based on
management's judgment as of the date hereof and are subject to
numerous risks and uncertainties. Actual results may vary
significantly from those indicated in the forward-looking
statements due to, among other things: oil, NGL and natural gas
price volatility, including regional price differentials; changes
in operational and capital plans; changes in capital costs,
operating costs, availability and timing of build-out of third
party facilities for gathering, processing, refining and
transportation; delays or other impediments to drilling and
completing wells arising from political or judicial developments at
the local, state or federal level, including voter initiatives
related to hydraulic fracturing; development drilling and testing
results; the potential for production decline rates to be greater
than expected; regulatory delays, including seasonal or other
wildlife restrictions on federal lands; exploration risks such as
drilling unsuccessful wells; higher than expected costs and
expenses, including the availability and cost of services and
materials; unexpected future capital expenditures; economic and
competitive conditions; debt and equity market conditions,
including the availability and costs of financing to fund the
Company's operations as well as the ability to raise capital
through the offer and sale of common stock by the Company from time
to time; the ability to obtain industry partners to jointly explore
certain prospects, and the willingness and ability of those
partners to meet capital obligations when requested; declines in
the values of our oil and gas properties resulting in impairments;
changes in estimates of proved reserves; compliance with
environmental and other regulations, including new emission control
requirements; derivative and hedging activities; risks associated
with operating in one major geographic area; the success of the
Company's risk management activities; title to properties;
litigation; and environmental liabilities. Please refer to the
Company's Annual Report on Form 10-K for the year ended
December 31, 2014 filed with the
Securities and Exchange Commission and other filings, including its
Current Reports on Form 8-K and Quarterly Reports on Form 10-Q, for
further discussion of risk factors that may affect the
forward-looking statements. The Company encourages you to
consider the risks and uncertainties associated with projections
and other forward-looking statements and to not place undue
reliance on any such statements. In addition, the Company assumes
no obligation to publicly revise or update any forward-looking
statements based on future events or circumstances.
ABOUT BILL BARRETT CORPORATION
Bill Barrett Corporation (NYSE: BBG), headquartered in
Denver, Colorado, develops oil and
natural gas in the Rocky Mountain region of the United States. Additional information
about the Company may be found on its website
www.billbarrettcorp.com.
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SOURCE Bill Barrett Corporation