Lonestar Resources Ltd has provided 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 3Q015 will average 6500 boe/d, representing a 39% increase in production over prior year results. 3Q15 production results mark a new record for Lonestar, and also represent an approximate 12% sequential increase in production over 2Q15 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% y/y in of 3Q15, and 15% sequentially over 2Q15 results.
Lonestar's production momentum is continuing into the 4Q15, with 3Q15 exit rates expected to average in excess of 7000 boe/d. 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 5900 to 6300 boe/d.
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/bbl 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 2276 bpd of oil over 2016 at a price of $77.15/d, which equates to more than half of its projected 2016 crude oil volumes, and providing the company with significant crude oil price insulation.
Lonestar's CEO, 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."
Edited from press release by Angharad Lock