Rosehill Resources Inc. (NASDAQ:ROSE) Q3 2018 Earnings Conference Call Transcript
Nov 09, 2018 • 11:00 am ET
Good day, ladies and gentlemen, and welcome to Rosehill Resources Third Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call may be recorded.
I would now like to turn the conference over to Senior Manager, Finance and Investor Relations, John Crain. Please go ahead.
Thank you, George. Good morning, everyone, and welcome to today's conference call to review Rosehill Resources Third Quarter 2018 Operating and Financial Performance. After I cover the forward-looking statements, Gary Hanna, our Chairman and Interim Chief Executive Officer, will review key items and operational results, and Craig Owen, our Chief Financial Officer, will then provide a financial review. We will have a question-and-answer session, and Gary will then close the call with some brief comments. Also joining us today on the call is Brian Ayers, our Vice President of Geology.
I'd like to remind you that today's call includes forward-looking statements and certain non-GAAP financial measures. We believe our expectations are based on reasonable assumptions. However, a number of factors could cause results to differ materially from what we discuss. We encourage you to read our full disclosure on forward-looking statements in our SEC filings and the GAAP reconciliations included in yesterday's earnings release.
With that, I will now turn the call over to Gary.
Thank you, John and thank you to everyone for attending Rosehill's third quarter earnings call today. I'm pleased to report that during the third quarter, we made significant progress on several key fronts, including continued production and cash flow growth and the announcement of initial results in our Southern Delaware area. It was a busy quarter for the company, which concluded with the equity offering we launched in late September.
For the third quarter, our average net production was 19,750 barrels of oil equivalent per day, up 7% compared to the second quarter of 2018. In mid-September, we announced that we exceeded 20,000 barrels of oil equivalent per day, a significant accomplishment given our production at the time of our business combination just 19 months ago. Since that time, we have grown production approximately 400%, all while maintaining a strong balance sheet with a healthy leverage profile.
Another highlight for the third quarter was our continued progress on cost control, which resulted in a $1.81 per BOE decrease and combined lease operating and cash G&A expense. These reductions were in addition to similar improvements in the second quarter. We now have reduced combined LOE and cash G&A per BOE by $4.65 or 35% since the first quarter of 2018. These efforts contributed to a strong adjusted EBITDAX for the third quarter of $56.7 million, a 15% increase over the second quarter and a nearly eight-fold increase over the third quarter of 2017.
During the third quarter, we began collecting the first well results in our Southern Delaware area. As of today, we have placed four