- Strong new well performance in Loving County has increased current production average for first week of March to a record high of 13,000 net barrels of oil equivalent per day "BOEPD" (72% oil) with significant increase expected by the end of March;
- White Wolf acreage acquisition agreement expired with no additional acres acquired in 2018;
- Development in White Wolf currently underway with surveying, staking and permitting activities, with plan to begin drilling four wells in early second quarter; and
- Oil and gas marketing contracts currently being negotiated for White Wolf production.
Operational UpdateIn late December, the Company's net daily production exceeded 10,000 net BOE. Due to severe cold weather, simultaneous operations downtime from Rosehill and offset operator activities, production in January was limited to under 9,000 net BOEPD. As new wells continued to clean up from initial flowback and downtime decreased, the average Company production in February improved to almost 11,000 net BOEPD. The first week of March has seen a continued ramp up of production, with total Company production averaging approximately 13,000 net BOEPD (72% oil). The Company has six wells completed with initial flowback and clean up planned over the next few weeks and expects March's exit production rate to be up significantly from current levels. Rosehill continues to demonstrate and expect strong production growth in 2018 and beyond and currently has two rigs drilling and one dedicated frac crew. White Wolf Acquisition Update On March 8, 2018 the 90-day period for acquiring additional acreage under the White Wolf purchase agreement expired. Rosehill did not acquire any additional acreage in the White Wolf area in 2018 and its total acreage position in this area stands at 6,505 net acres (11,150 total net acres in both of our core areas in the Delaware Basin). The Company is surveying, staking and permitting the first four White Wolf well locations with the first well expected to spud in April, with early well results expected this summer. The Company plans to obtain cores and perform extensive data gathering and scientific analysis on the first four wells to best determine the optimal development of the new White Wolf acreage. Initial drilling at White Wolf will provide a technical framework for full-scale development and will also help anchor the new 3D seismic survey expected to be acquired in the second quarter of 2018. All four initial wells will target the Wolfcamp B, which has proven to be a very prolific reservoir in the White Wolf area.
The Company has been planning and building out the infrastructure as well as negotiating and securing marketing contracts for future production in the White Wolf area. Rosehill has secured a gas market for its production and is analyzing various oil marketing options. Rosehill expects to drill 16 to 22 new wells in the White Wolf area in 2018 and expects to complete 12 to 16 of those wells. While most of these wells will have lateral lengths of approximately 5,000 feet, the Company is projecting four to eight extended lateral wells greater than 7,000 feet in 2018.About Rosehill Resources Inc. Rosehill Resources Inc. is an oil and gas exploration company with producing assets in Texas and New Mexico with its investment activity focused in the Delaware Basin portion of the Permian Basin. The Company's strategy for growth includes the organic development of its two core acreage areas in the Northern Delaware Basin and the Southern Delaware Basin, as well as focused acquisitions in the Delaware Basin. Forward-Looking Statements This communication includes certain statements that may constitute "forward-looking statements" for purposes of the federal securities laws. All statements, other than statements of historical fact included in this communication, regarding our opportunities in the Delaware Basin, our strategy, future operations, financial position, estimated results of operations, future earnings, future capital spending plans, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words "could," "believe," "anticipate," "intend," "estimate," "expect," "will," "project," "guidance," "forecast" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. You should not place undue reliance on these forward-looking statements. Although the Company believes that the plans, intentions and expectations reflected in or suggested by the forward-looking statements in this communication are reasonable, no assurance can be given that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied by the forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to, the ultimate timing, outcome and results of integrating the assets acquired in the White Wolf acquisition into its business and its ability to realize the anticipated benefits, commodity price volatility, inflation, lack of availability of drilling and completion equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating oil and natural gas reserves and in projecting future rates of production, cash flow and access to capital, the timing of development expenditures and the other risks and uncertainties discussed under Risk Factors in the Company's Registration Statement on Form S-3, as amended, filed with the SEC on June 14, 2017, and in other public filings with the Securities and Exchange Commission (the "SEC") by the Company. The Company's SEC filings are available publicly on the SEC's website at www.sec.gov. These forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. All forward-looking statements speak only as of the date of this communication. Except as otherwise required by applicable law, the Company disclaims any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this communication.
Contact Information:Alan TownsendPresident and Chief Executive Officer281-675-3400 Craig OwenChief Financial Officer281-675-3400