Tuesday, December 21, 2010

Goodrich 2011 Capital Budget

Goodrich Petroleum announced its 2011 capital budget last week.  The company will spend $225 million in total, a reduction of $30 million from 2010.  Goodrich does not expect to have to borrow to fund the plan, as the funds will be sourced from cash flow and $70 million of expected "non-core asset" divestiture proceeds (although I tend to view asset sales sort of like mortgaging the future).

Goodrich will spend $90 million to develop the Haynesville Shale next year, $60 million in the Shelby Trough in Texas and $30 million in north Louisiana.  The company also expects to spend $22 million across its platform on leasehold acquisitions and infrastructure, but I don't suspect that much of that money will be spent in the Haynesville area, as Goodrich is intent on advancing its currently less well developed Eagle Ford Shale prospects.

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