Goodrich Petroleum (GDP) Announces Capital Expenditure Budget And 2020 Guidance

Goodrich Petroleum Corporation (NYSE: GDP) today announced a preliminary 2020 capital expenditure budget of $55 - $65 million, an approximate 35% reduction from the midpoint of 2019 capital expenditure guidance. At natural gas and oil prices of $2.50 and $55.00, respectively, the Company expects to generate approximately $15 – $25 million of free cash flow, which at the midpoint of guidance would generate a free cash flow yield of approximately 9% and 16% on the Company's current enterprise value and market capitalization, respectively. At this price deck the Company anticipates exiting 2020 at approximately 1.0 times debt to EBITDA.

The Company expects to grow production by 12.5% – 17.5% versus 2019 to a range of approximately 53 – 56 Bcfe, or an average of 145,000 – 153,000 Mcfe per day for the year. Natural gas is expected to comprise approximately 99% of total production.

The Company's capital expenditure budget currently contemplates completing and turning in line 13 gross (5.8 net) horizontal wells for the year, with an estimated blended net average lateral length of approximately 8,500 feet. The budget currently contemplates that the Company will operate 72% of its net wells completed and turned in line 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 majority of the budget to drilling and completing core Haynesville Shale wells in the Bethany-Longstreet area of Caddo and DeSoto 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 2020:

In addition, the Company has hedged approximately 45% - 50% of its expected natural gas volumes for the year at a blended average price of approximately $2.60.

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