In the midst of reports of more losses in 2016, Denver-based QEP Resources Inc. senior executives said Thursday they have begun this year with more cash, less debt and improved assets focused on expected significant growth in their Permian Basin plays in 2017-2018.

After running three rigs spread across its Wyoming, North Dakota and Texas operations last year, QEP plans to have five rigs in the Permian alone by the mid part of this year, according to CEO Chuck Stanley. As part of what he called an "aggressive" capital investment program this year, 60% of the funds will be focused on the Permian, particularly operations in Mustang Springs.

"In early January, we added a fourth rig in the Permian, and we should have a fifth rig operating before the end of the first quarter," Stanley said during a conference call in which QEP reported larger year-over-year losses for both 4Q2016 and the full year.

"The addition of our two rigs at County Line [in the North Midland Basin part of the Permian] allowed us to accelerate our well density testing in the Spraberry Shale, which we think will be pertinent for both of our Permian assets going forward," Stanley said, adding that at the end of last year the company saw an increase in DUCs [drilled but uncompleted] wells to 13 in the Permian because it had three rigs drilling on multiple pads late in the year.

"We plan to operate a total of five rigs for the last nine months of this year in the Permian."

In addition to the stepped-up drilling in the Permian, QEP plans to build much of its own gathering infrastructure -- oil and gas gathering pipelines, centralized oil storage and measurement facilities, and centralized gas dehydration and compression (about $50-60 million of infill projects this year). "For crude oil, we plan to interconnect with pipes providing access to multiple downstream markets and buyers, and for gas we're building interconnections with at least two gathering systems and several processing plants that will provide access to multiple markets for both residual gas and NGLs," Stanley said.

Over the life of the field, QEP estimates that it will save 25-50% of the cost of third-party services with its own infrastructure.

In  response to questions, Stanley acknowledged that as the Permian is ramped up, QEP's Bakken assets will be de-emphasized in relation to the Texas-New Mexico play. There will be an emphasis on building infill infrastructure and with that QEP will be shutting in more offset wells for both drilling and completion activity in its South Antelope field.

"On the Fort Berthold Reservation [in North Dakota] we can add a rig and not negatively impact current production volumes; however, the well costs are higher there and the returns not as attractive as adding six or eight rigs in the Permian Basin," Stanley said.

Responding to other questions, Stanley emphasized that QEP management and staff try to be "good students" and are adept at "copying the success of others. We've been watching the evolution of proppant loading [ever-larger loads of sand] and total fluid counts [in hydraulic fracturing]." In addition to these two factors, he said QEP thinks cluster spacing is also a key to maximizing the efficiencies of the fracking process.

For 4Q2016, QEP reported at net loss of $133.3 million (minus 56 cents/share), compared to a net loss of $38.6 million (minus 22 cents) for the same period the previous year. For all of 2016, the company reported a net loss of $1.24 billion (minus $5.62), compared to a net loss of $149.4 million (minus 85 cents) for all of 2015.