This article was first published by Seeking Alpha on December 16, 2014.
By Sarfaraz A. Khan
On Friday, oil prices tumbled to under $60 a barrel, their
lowest levels in more than five years as International Energy Agency gave a
grim forecast of further downward pressure on
prices. That is bad news for most of the exploration and production companies,
but even worse for Goodrich
Petroleum (NYSE:GDP).
The
Houston, Texas based Goodrich Petroleum is a small oil and gas producer, valued
at nearly $175 million, which operates primarily in the Tuscaloosa Marine Shale
(TMS), Eagle Ford Shale and the Haynesville Shale formations in Louisiana,
Mississippi and Texas. The company owns more than 300,000 net acres at TMS,
around 76,000 net acres at Haynesville and 30,000 net acres at Eagle Ford.
In an
environment of depressed natural gas prices over the last couple of years,
Goodrich has been focusing on developing its oil rich properties. Last year,
the company spent 43% of its capital expenditure on Eagle Ford, 42% on TMS, and
15% on Haynesville Shale. The TMS and Eagle Ford are liquid rich properties,
with former holding up to 4 million barrels of oil equivalents of proven
reserves while the latter has 12 million barrels of oil equivalents.
Consequently,
the company was able to more than double its liquids production between 2011
and 2013. This year, Goodrich has focused on developing TMS, which will drive
its liquids production growth. For 2014, Goodrich has allocated between 70% and
80% of its capital expenditure for TMS.
Further, as compared
to last year, the company has almost doubled the size …. Read full article at
Seeking Alpha.
