Goodrich Petroleum Corporation is reducing its 2019 capital expenditure budget by approximately $40 million, yet expects to maintain its previous production guidance for 2019 due to outperformance of its wells relative to its type curves. The Company now expects its capital expenditure budget for 2019 to be in the range of $90 million to $100 million. At current commodity prices, the Company anticipates generating EBITDA approximately in-line with 2019 capital expenditures and expects to exit 2019 at approximately 1.0 times debt to EBITDA.

The Company expects to grow production by 90 – 105% versus 2018 to a range of approximately 49.3 – 52.9 Bcfe for the year, or an average of 135,000 – 145,000 Mcfe per day. Natural gas is expected to comprise approximately 98% of total production. 

The Company's capital expenditure budget contemplates drilling and/or completing 11 gross (9.8 net) horizontal wells for the year, with a blended net average lateral length of approximately 7,000 feet. The budget currently contemplates that the Company will operate 100% of its net wells for the year. The preliminary capital expenditure budget is subject to quarterly review and approval by the Company's board of directors, with the flexibility to accelerate in the second half of the year depending on commodity prices. The Company has allocated the vast majority of the budget to drilling and completing core Haynesville Shale wells in the Bethany-Longstreet and Thorn Lake areas of Caddo, DeSoto and Red River Parishes, Louisiana. 

Cash margin is expected to continue to expand as unit costs decrease with the growth in volumes, and the Company is issuing a guidance range for the following cash costs per Mcfe of production for 2019: 

The Company has hedged approximately 50 - 53% of its expected natural gas volumes for the year at a blended average price of $2.87 and approximately 62.5% of expected crude oil volumes for the year at $51.08. 

Operational Update

The Company expects to commence frac operations on two Cason – Dickson (98% WI) wells (approximately 9,300 foot laterals) in the Thorn Lake area of Red River Parish, Louisiana beginning in early January, to be followed by two Loftus (~90% WI) wells (7,500 foot laterals) in the Bethany-Longstreet field in DeSoto Parish, Louisiana.

The Company expects to begin the year with one rig running on its core North Louisiana Haynesville acreage and add a second rig in the second quarter.