Rosetta Resources tested a 8,100-acre tract for the first time in the third quarter of 2012. The Lasseter & Eppright 1 well is located in central Dimmit County (oil window). The well has a 5,404-ft lateral and was completed with 15 frac stages. In the first seven days online, the well produced 667 b/d of oil, 1.8 mmcfd of residue gas, 262 b/d of NGLs for an equivalent rate of 1,228 boe/d. I'll step out on a limb and say more than 1,000 boe/d is really good sign. We'll likely see the company attribute additional wells to its development program in this area in the coming months.

The promising well wasn't the only news for the company. The company spent a little more than $188 million during the quarter and increased its 2012 capex guidance to $660-680 million for the year (a $20-40 million increase). Otherwise, Rosetta reported good results across the board. The company drilled 25 gross operated wells, while completing 16 wells. Production grew 13% from the previous quarter to 36.5 mboe/d.

The company ran five rigs during the quarter. The bulk of the company's activity is at Gates Ranch (15 of 25 wells drilled in the quarter) where the company continues to see positive well results at 55-acre spacing. Rosetta will keep 2-3 rigs running in the Gates Ranch area and will move its other two rigs around its acreage in other areas. The company has almost 350 more drilling locations left to develop at Gates Ranch.