Extraction Oil & Gas, Inc. (NASDAQ:XOG) Q3 2018 Earnings Conference Call Transcript
Nov 06, 2018 • 04:30 pm ET
Good morning. I'm Amanda, and I will be your conference facilitator today. I would like to welcome everyone to the Extraction Oil & Gas's Third Quarter 2018 Financial and Operating Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer period. (Operator Instructions)
(Forward-Looking Cautionary Statements)
I would now like to turn the call over to Louis Baltimore, Extraction's Director of IR.
Thank you, and good afternoon to everyone. We're glad you could join us today for our third quarter earnings call. With us today on the call, we have Mark Erickson, our Chairman and CEO; Matt Owens, the company's President; Rusty Kelley, our CFO; Tom Brock, our Chief Accounting Officer; and Eric Jacobsen, our SVP of operations.
I'd like to remind you that today's call, in addition to the aforementioned forward-looking statements, also include a discussion of certain non-GAAP financial measures. Please be sure to read our full disclosure on forward-looking statements and GAAP reconciliations in our earnings release and in our filing on Form 10-Q, which we provided earlier today after the close of trading.
I'll now turn over the call to Mark Erickson, our CEO, to go through some highlights for this quarter.
Thanks, Louis. Good afternoon, everyone. Welcome to our third quarter earnings call. First, I would like to recap some of the outstanding achievements our team has made this year. We still expect to grow our production by over 45%, and we demonstrated the high productive potential within each of our Broomfield and Hawkeye Areas.
Our wholly owned midstream company, Elevation, is funded on a non-recourse basis requiring no capital outlays by the upstream company, exposing our shareholders to significant future upside. Currently, pipelines are being laid in Broomfield area, which is now fully permitted, with development expected to commence in early 2019. We've been able to monetize over $150 million of assets.
Our operations team continues to lead by example, setting a new milestone of over 1.2 million man-hours without a single recordable employee incident, along with being awarded a Gold Leadership Award by Colorado in recognition for our efforts to go beyond on compliance with state and federal environmental regulations, commitment to continual environmental improvements and demonstrating leadership in partnering with local communities. Finally, we expect to achieve free cash flow in Q4 and expect to continue to grow our production base in 2019 while generating free cash flow for the year, excluding the impacts of Elevation Midstream.
Now I want to touch on the impressive results from our first pad of operated wells in the Broomfield area. And next, we'll talk about the difficulties we've been having related to constraints on the DCP system. After that, we'll open the call up to Q&A. In late August, we started turning on a batch of 10 wells with two-mile laterals testing spacing of 16 to 18 wells per section drilled on our Coyote Trails pad within our Broomfield project area. The