Jagged Peak Energy Inc. (NYSE:JAG) Q3 2019 Earnings Conference Call - Final Transcript

Thank you for standing by and welcome to Jagged Peak Energy's Third Quarter Earnings and Operational Update. At this time, all participants are in a listen-only mode. Please be advised, today's conference call is being recorded. [Operator Instructions]

I'd now like to hand the conference over to your speaker today, James Edwards, Director of Investor Relations. Thank you. Please go ahead.

Thank you, Jessie. Good morning everyone and welcome to Jagged Peak Energy's Third Quarter 2019 Earnings and Operational Update Conference Call. This morning, Jim Kleckner, our President and CEO, who will be providing a short set of prepared remarks.

As noted in our press release last evening, we will not be hosting a Q&A session on the call today, nor do we have an investor presentation that will accompany this call. A copy of the release and our 10-Q can both be found on our website at jaggedpeakenergy.com.

During this call, we'll make certain forward-looking statements about the Company's financial condition, results of operations, plans, objectives, future performance and business activities. We caution that our actual results could differ materially from these results -- from the results that are indicated in the forward-looking statements, due to a variety of factors. Information about these factors can be found in the company's SEC filings, including the 2018 10-K and 2019 10-Qs.

Our material also includes certain non-GAAP financial measures such as adjusted EBITDAX and adjusted net income. We believe these non-GAAP measures provide a comparison across periods of activity, with other oil and gas operators. The reconciliation of the appropriate GAAP financial measures to the non-GAAP financial measures can be found in our earnings release.

I'll now turn the call over to Jim for his review of the quarter.

Thanks, James. Good morning everyone and thank you for joining us for our review to third-quarter conference call. Overall, our third quarter performance was strong, as we continue to successfully execute on our 2019 plan, particularly our ability to drive down CapEx and keep production on track. We brought online 17 wells during the quarter. On the high end of our expectations, were our capital expenditures for the quarter came in lower than the budgeted amount, as we continue to drive improved capital efficiency.

Through the third quarter, DC&E cost an average of $1,160 per lateral foot, down from $1,250 in the second quarter, 7% below our 2019 annual goal of $1,250 per lateral foot. These efficiencies were driven by continuous execution improvements and moving to larger pads.

For production, we averaged 30,000 barrels of oil per day, right at the midpoint of our third quarter guidance range. We're pleased with the drilling and completion activities on our first two larger-scale pads, Coriander and Venom, but they both came online on time and on budget. Through these first two larger pad projects, we were able to capture lessons learned and provide an immediate benefit on the adjacent subsequent wells, driving down per lateral foot project costs. Our Coriander project has a DC&E cost