Drilling & Completions | Quarterly / Earnings Reports | Third Quarter (3Q) Update | Key Wells | Forecast - Production | Capital Markets | Drilling Activity | Capex Increase | Capital Expenditure - 2018
SRC IDs 22% YOY Output Growth in Q3; Adds Second Completion Crew, Ups Capex
Print
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SRC Energy Inc. has detailed its preliminary Q3 2018 operating results and recent well activity.
Production Summary
Production is up +22% YOY at 49.2 MBOEPD and up +3% from the prior quarter.
| Three Months Ended | ||||
| 9/30/2018 | 6/30/2018 | Sequential % Chg. | 9/30/2017 | |
| Average Daily Volumes | ||||
| Total Production (BOE) | 49,165 | 47,646 | 3% | 40,378 |
| Liquids % | 65% | 65% | 67% | |
| Product Price Received | ||||
| Crude Oil ($/Bbl)* | $63.48 | $61.22 | 4% | $42.37 |
| Natural Gas Liquids ($/Bbl) | $19.93 | $17.65 | 13% | $17.32 |
| Natural Gas ($/Mcf) | $1.79 | $1.64 | 9% | $2.35 |
| Differentials | ||||
| NYMEX WTI* | $(6.27) | $(6.81) | 8% | $(5.81) |
| NYMEX Henry Hub | $(1.11) | $(1.16) | 4% | $(0.64) |
| Unit Costs | ||||
| Lease Operating Expense ($/BOE) | $2.29 | $2.68 | -15% | $1.17 |
| * Includes transportation and gathering expense | ||||
Operations Update - Second Completion Crew Added
In anticipation of the Mewbourn 3 plant opening, SRC added a second completion crew and will maintain the two crews through year-end to complete certain pads ahead of the onset of winter and in anticipation of the O'Connor 2 plant expansion in the spring of 2019.
| Gross Well Count by Zone | |||||
| Pad Name | Lateral Length | Avg. WI | Niobrara | Codell | Status |
| Ag | 12 LL | 86% | 7 | 5 | TTS Q2/Q3 |
| Goetzel II | 12 ML | 93% | 8 | 4 | TTS Q3 |
| Falken | 12 LL, 6 SL | 95% | 11 | 7 | TTS Q3 |
| Boomerang | 12 ML, 4 LL | 84% | 10 | 6 | TTS Q4 |
| Donn | 13 LL | 97% | 8 | 5 | TTS Q4 |
| Harvesters | 12 ML | 88% | 8 | 4 | TTS Q4 |
| Troudt I | 12 LL | 93% | 9 | 3 | Completing |
| Greeley Rothe | 12 LL | 67% | 8 | 4 | Completing |
| Troudt II | 12 ML | 100% | 7 | 5 | WOC |
| Lincoln | 12 ML | 68% | 9 | 3 | Drilling |
| McNear | 12 LL | 92% | 8 | 4 | Drilling |
| TTS - Turned to sales | WOC - Waiting on completion | DCNP - Drilled & completed but not producing | SL -Standard Lateral | ML - Mid-Reach Lateral | LL- Long Lateral | |||||
Guidance Update - $40MM Added to 2018 Capex
The table below details selected results for the three and nine months ended September 30, 2018 and current full-year guidance:
| 3rd Qtr 2018 Actual |
9 Months 2018 Actual |
Original 2018 Guidance |
Adjusted 2018 Guidance |
|
| Production (Boe/d) | 49,165 | 47,416 | 48,000 52,000 | 50,000 |
| Oil % | 42% | 45% | 47% | 45% |
| D&C Capex ($mil) | $178 | $408 | $540 | $580 |
| Wells Drilled (Gross/net) | 30/26 | 89/77 | 117/100 | 118/101 |
| Wells Completed (Gross/net) | 44/39 | 89/81 | 116/103 | 127/112 |
| Wells TTS (Gross/net) | 38/35 | 54/49 | 101/92 |
The Company has tightened its full year 2018 production guidance to approximately 50 Mboe/d as a result of gas processing developments and incremental increases reflecting the second closing of the GCII acquisition.
In addition, SRC has adjusted guidance for drilling and completion capital expenditures to approximately $580 million from prior guidance of $540 million. The increase reflects a combination of the additional wells that are now expected to be completed during the year due to efficiency gains, recent acreage trades and acquisitions that have led to higher working interests across our operating areas, as well as higher than expected non-operated activities.
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