SilverBow Resources Announces New Dry Gas Position in the Dorado Play of Webb County

Rhea-AI Summary

SilverBow Resources, Inc. (NYSE: SBOW) has expanded its presence in the Dorado play by acquiring an additional 7,500 net acres in Webb County, Texas, incurring around $50 million in total costs. This acquisition doubles its existing acreage and includes approximately 650 BCF of net recoverable resource. The company has already initiated production with one well from each of the Eagle Ford and Austin Chalk formations, achieving initial production rates of 13 MMcf/d and 17 MMcf/d respectively. This strategic move is expected to enhance SilverBow's core inventory and production capacity.

Positive

• Doubled Webb County acreage, enhancing strategic positioning.
• Estimated recoverable resources of approximately 650 BCF.
• Initial production rates from new wells exceed expectations.

Negative

• None.

HOUSTON--(BUSINESS WIRE)-- SilverBow Resources, Inc. (NYSE: SBOW) (“SilverBow” or “the Company”) today announced the addition of a new acreage block in the Dorado play of Webb County, Texas. Through a series of transactions, including bolt-on acquisitions, leasing and drill-to-earn agreements, the Company has assembled 7,500 net acres with current net production of approximately 30 million cubic feet per day (“MMcf/d”). Consideration for SilverBow’s new Dorado position has totaled approximately $50 million, representing a combination of leasing, acquisition and drilling capital. Approximately $40 million of the total was incurred during the third quarter of 2022.

Highlights:

• The new position doubles SilverBow’s current Webb County acreage, with similar reservoir characteristics and economics as the Company’s prolific Fasken position
• The new block adds stacked pay, co-development inventory with over 50 net high rate of return drilling locations across the Austin Chalk and Eagle Ford formations
• The Company estimates net recoverable resource of approximately 650 BCF from the new block, demonstrating the prolific quality of the Dorado play
• The Company has already drilled and brought online one Eagle Ford well and one Austin Chalk well on the new acreage. Both wells came online in late July and are producing approximately 13 MMcf/d and 17 MMcf/d gross, respectively
• The Austin Chalk well represents the Company’s seventh Chalk well drilled in Webb County with the 17 MMcf/d initial production rate being the best performing well to date
• All seven Chalk wells are exceeding the Company’s two billion cubic feet (“BCF”) per 1,000’ of lateral length estimated ultimate recovery (“EUR”) type curve

MANAGEMENT COMMENTS

Sean Woolverton, SilverBow’s Chief Executive Officer, commented, “We are excited to announce our new position in the Dorado play, which we assembled by leveraging our long standing relationships in the area and our basin specific expertise. This new area closely resembles the reservoir quality of our prolific Fasken asset, and aligns with our strategy of adding scale in core areas and bolstering our Austin Chalk and Eagle Ford inventory. The first two wells that we have brought online in this position are exceeding our expectations and further confirm the robust economics of both the Eagle Ford and Austin Chalk reservoirs across Webb County.”

Mr. Woolverton commented further, “Our total net acreage position in Webb County now totals 15,000 acres and with estimated drilling inventory exceeding 200 gross locations. This represents approximately eight years of development at a one rig pace. Our current plan is to run a contiguous rig to develop the inventory as we ramp our gas production into a very favorable price environment.”

ABOUT SILVERBOW RESOURCES, INC.

SilverBow Resources, Inc. (NYSE: SBOW) is a Houston-based energy company actively engaged in the exploration, development and production of oil and gas in the Eagle Ford Shale and Austin Chalk in South Texas. With over 30 years of history operating in South Texas, the Company possesses a significant understanding of regional reservoirs that it leverages to assemble high quality drilling inventory while continuously enhancing its operations to maximize returns on capital invested. For more information, please visit www.sbow.com. Information on the Company’s website is not part of this release.

FORWARD-LOOKING STATEMENTS

This release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent management's expectations or beliefs concerning future events, and it is possible that the results described in this release will not be achieved. These forward-looking statements are based on current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this press release, including those regarding our strategy, the benefits of the transactions, future operations, guidance and outlook, financial position, well expectations and drilling plans, estimated production levels, expected oil and natural gas pricing, estimated oil and natural gas reserves or the present value thereof, reserve increases, service costs, impacts of inflation, future free cash flow and expected leverage ratio, capital expenditures, budget, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this report, the words “will,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “budgeted,” "guidance," “expect,” “may,” “continue,” “predict,” “potential,” “plan," “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, risks and uncertainties discussed in the Company’s reports filed with the SEC.

All forward-looking statements speak only as of the date of this news release. You should not place undue reliance on these forward-looking statements. The Company’s capital budget, operating plan, service cost outlook and development plans are subject to change at any time. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this release are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. The risk factors and other factors noted herein and in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. We undertake no obligation to publicly release the results of any revisions to any such forward-looking statements that may be made to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220915005369/en/

Jeff Magids

Director of Finance & Investor Relations

(281) 874-2700, (888) 991-SBOW

Source: SilverBow Resources, Inc.

FAQ

What recent acquisition has SilverBow Resources (NYSE: SBOW) made?

SilverBow Resources has acquired 7,500 net acres in the Dorado play, Webb County, Texas.

How much did SilverBow Resources spend on the new Dorado position?

The total consideration for the new Dorado position totaled approximately $50 million.

What are the initial production rates from SilverBow's new wells?

The new Eagle Ford well produces approximately 13 MMcf/d and the Austin Chalk well produces around 17 MMcf/d.

How does the new acreage affect SilverBow's existing operations?

The new acreage doubles SilverBow’s existing Webb County acreage and adds over 50 high rate of return drilling locations.

What is the estimated recoverable resource from the new block acquired by SilverBow?

The estimated net recoverable resource from the new block is approximately 650 BCF.