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Legacy Reserves Spends 1250% More YOY; Expects Oil Output to Grow 46.6% in 2018

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   |    Monday,December 04,2017

  Legacy Reserves reported its Q3 results and discussed its preliminary 2018 production and capital plans. Highlights include:

• Reported average daily production of 45,891 boe/d, an increase of about 7% from Q2 when production was 43,000 boe/d
• Capital expenditures in Q3 were $93.2 million
• Total capital expenditures in 2017 are expected to be $141.5 million, an increase of about 664.9%

2017 Results

Legacy Reserves reported average daily production in Q3 as 45,891 boe/d, an increase of about 7% from Q2 production which was 43,000 boe/d. Average daily oil production in Q3 was a company record of 14,380 bbls/d, an increase of 25% from Q2.

The company expects to exit the year with total average daily production between 44,590 and 44,922 boe/d. Of this total, it expects oil production to range between 13,637 and 13,789 bbls/d, NGL production to range between 2,370 and 2,383 boe/d, and natural gas production to range between 171.5 and 172.5 mmcf/d.

Total development capital expenditures for Q3 were $93.2 million, an increase of 1,250.7% from Q3 2016. For the nine months that ended on September 30, 2017, capital expenditures totaled $141.5 million, an increase of 664.9% from the $18.5 million spent in the first nine months of 2016.

Legacy Reserves expects to exit the year with between $181.5 and $183.5 million in total capital expenditures.

Midland Acquisition

Legacy completed an acquisition in Q3 for acreage in the Midland and Central Basins for $3.3 million. With this acquisition, the company adds 24 horizontal locations in the Spraberry and Wolfcamp in the Midland and 9 horizontal locations in the San Andres in the Central Basin.

2018 Guidance

In addition to its Q3 results, Legacy released its preliminary expectations for production and capital expenditures for 2018. It expects total daily production to be between 47,908 and 53,283 boe/d, an increase of 13% from its expected 2017 end of year production of 44,590 to 44,922 boe/d. Most of this positive change will come from the company's expectation of a 46.6% increase in oil production from 13,637 to 13,789 bbl/din 2017 to 18,800 to 21,400 bbls/d forecasted for 2018.

Legacy reserves also expects its capital expenditures to increase in 2018. The company expects to exit 2017 with capital expenditures between $181.5 and $183.5 million. In 2018, it expects the range to be between $200 and $225 million.