On Jan. 21, Lonestar Resources Ltd. (OTC: LNREF, ASX: LNR.AX) provided an update on its Gonzales County, Texas drilling and completions activities. The company also provided an update on its 2014 exit rate production levels.

In third-quarter 2014’s quarterly report, Lonestar said the year-end exit rates would be between 6,500 barrels of oil equivalent per day (boe/d) and 7,000 boe/d. December’s net production averaged 6,551 boe/d. During the month, net sales volumes went down by about 135 bbl/d of NGL and 538 thousand cubic feet per day (Mcf/d) of natural gas (225 boe/d), due to completions delays, Lonestar said.

Also, in December, the company deferred fracking the Gerke #1H, #2H and #3H wells to capitalize on reduced pressure pumping costs.

Three horizontal wells in the county were drilled and completed during 2014’s fourth quarter on leasehold acquired through a farm-in agreement, the company said. The wells were put on production for $6.8 million, Lonestar added, noting that they were placed on flowback.

  • Harvey Johnson #1H- Lonestar perforated a 5,592-foot interval and pumped 8.8 million pounds of proppant across 22 stages. The well tested at 1,135 bbl/d of oil and 322 Mcf/d of gas on a 20/64" choke. It also hit 30-day production rates of 610 bbl/d of oil and 313 Mcf/d of gas on a 20/64" choke.
  • Harvey Johnson #2H- Lonestar perforated a 6,726-foot interval and pumped 10.9 million pounds of proppant across 27 stages. The well tested at 954 bbl/d of oil and 418 Mcf/d of gas on a 22/64" choke. It also hit 30-day production rates of 767 bbl/d of oil and 421 Mcf/d of gas on a 22/64" choke.
  • Harvey Johnson #3H- Lonestar perforated a 6,737-foot interval and pumped 10.8 million pounds of proppant across 27 stages The well tested at 1,161 bbl/d of oil and 496 Mcf/d of gas on a 22/64" choke. It also hit 30-day production rates of 847 bbl/d of oil and 453 Mcf/d of gas on a 22/64" choke.

Lonestar has a 50% working interest in all three wells.

“Notwithstanding depressed oil prices, these attractive flow rates, along with our program of unlocking material cost savings and successful hedging policy, confirm our ability to deliver high IRRs [internal rates of return] and create value through drilling in the oil-rich window of the Eagle Ford," said Frank D. Bracken III, managing director and CEO.

Also, the company said it plans to drill three additional horizontal wells adjacent to the Harvey Johnson wells. Operations are scheduled to begin in 2015’s first quarter. Modern Exploration will share a 50% working interest with Lonestar, the company added.

Fort Worth, Texas-based Lonestar Resources Ltd. explores and produces oil and natural gas in the Eagle Ford Shale.