The good news is that initial production rates from Goodrich Petroleum Corp.’s Tuscaloosa Marine Shale wells are “very positive and improving.” The bad news is that oil prices remain depressed and Goodrich lost $233.3 million during the fourth quarter.
Goodrich said well costs have been cut by more than 20 percent and the oil field’s economics are potentially superior to the Eagle Ford Shale in Texas.
Well cost estimates have been cut from about $13 million in 2013 to roughly $10 million, and $9.4 million where two wells have been drilled from the same site, according to Goodrich. The reduction is the result of slashing the time it takes to drill a well from 40 days to an average of 26.
Goodrich has 327,000 acres under lease in the Tuscaloosa Marine Shale, an oil-rich formation that stretches across Louisiana and into Mississippi. The company said it still plans to spend $80 million to $100 million in 2015 for drilling and completion, almost all of it in the Tuscaloosa.
Because of low oil prices, Goodrich had to write-down the value of its oil and gas properties, taking a one-time, noncash charge of $246.6 million.
Its resulting fourth-quarter $233.3 million loss amounted to $5.23 per share, compared to a loss of $30.9 million, or 73 cents per share, a year ago.
For the year, Goodrich lost $382.9 million, or $8.62 per share, compared to a loss of $113.8 million, or $2.99 per share in 2013. The 2014 loss was largely driven by a noncash write-down of $331.9 million.
The company had three rigs running in the Tuscaloosa during the fourth quarter. The company has completed its Kent 41H-1 well in Tangipahoa Parish. Goodrich is drilling three wells in Tangipahoa Parish and another in Washington Parish. In addition, the company has seven TMS wells drilled and waiting on completion, with plans to begin completion operations on these wells late in the first quarter through early 2016, pending better market conditions.