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Seven Gen Reduced D&C Cost ~$0.8MM in Q3; Ties Increased Well Productivity to More Stages

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Seven Generations released its Q3 results where it discussed highlights from the quarter and its intent to announce 2018 plans in middle November. Highlights include:

Operations

SevenGen ran 7 rigs in Q3 and drilled 18 wells, completed 25 wells, and brought 39 wells on production. This well inventory is in line with SevenGen's 2017 drilling plans.

SevenGen reduced its well cost in Q3 to $4 million, down from $4.2 million in Q2 2017. Its completion cost in Q3 was $7 million, which was down from $7.6 million in the previous quarter. SevenGen, additionally continued to make changes to its well designs, with higher stage counts of 45 stages and ~6,400 ton of proppant after the company observed a positive relationship between well production and increased stage counts.

Production

The company produced an average of 183,920 boe/d in Q3, up 39% from Q3 2016 when production averaged 132,600 boe/d. Condensate production was 57.8 mbbl/d in Q3, up from 46.5 mbbl/d in Q3 2016. NGLs production averaged 50.6 mbbl/d, up from 33.8 mbbl/d in Q3 2016. Lastly, natural gas production in Q3 averaged 453.2 mmcf/d, up from 314 mmcf/d in Q3 2016.

Capital Expenditures

SevenGen's capital expenditures were $454.3 million in Q3 bringing the year to date total to $1.3 billion. In Q4, the company expects to spend between $300 and $350 million dollars, which will bring the total full year spending to ~$1.65 billion, which is slightly above the capital guidance of $1.5 to $1.6 billion. 

SevenGen will announce its 2018 capital budget on November 16, 2017.