Denver-based independent QEP Resources Inc. continues its shift to an oilier production mix, completing its exit from the Pinedale Anticline in September while completing this week a $683.5 million purchase of 13,000 acres in the Permian Basin in West Texas.

The exploration and production (E&P) company said it closed Tuesday on the Permian acquisition, which includes acreage primarily in Martin County.

Also during the third quarter, QEP moved to simplify its portfolio through $34.5 million in asset sales in the Permian's Central Basin Platform, as well as assets in Southwest Wyoming and Utah. Management said the company "continues to evaluate the sale of certain upstream and midstream assets" as it "sharpens its focus on the development of its acreage in the core of the Permian Basin."

During a conference call Thursday to discuss 3Q2017 results, management said its strategy for 2018 and beyond centers on maintaining production growth in a $50/bbl oil and $3/MMBtu natural gas market while bringing capital expenditures (capex) in balance with cash flow.

"Our No. 1 focus in 2018 will be on execution, delivering results from all of our assets, particularly those in the Permian, to drive mid-teens oil production growth while managing down our capex outspend to more closely match forecasted cash flow while improving per-boe margins and returns on invested capital," CEO Chuck Stanley said. "Our goal, assuming $50 oil and $3 gas, is to achieve free cash flow generation before the end of 2019, which we believe we can do while still delivering mid-teens oil production growth."

Net production from the Permian for the quarter averaged 25,600 boe/d (88% liquids), a 21% increase sequentially and a 57% increase year/year. QEP exited the third quarter with six operated rigs running in the Permian, with an additional rig drilling salt water disposal wells.

The E&P also continued to see success from refracturing (refrack) programs in the Williston Basin and in the Haynesville Shale/Cotton Valley during the quarter. The refrack results in the resurgent Haynesville even prompted the E&P to move a rig to the play to drill wells there for the first time since 2012.

"The first well on the schedule was a roughly 5,000 foot lateral that had already been drilled to the intermediate casing point back in June of 2009," Stanley said. "Once we finished on that well, we moved the rig to a first of a series of planned 10,000-foot laterals. We plan to utilize the frack crew to continue our refrack program in the time between the activity to complete these new drills."

Production in the Haynesville/Cotton Valley averaged 216.6 MMcfe/d during the quarter, up 18% versus the second quarter and a 63% increase over the year-ago period. QEP credited the refrack program for the increase, with the E&P completing nine operated refracks in the Haynesville at an average clip of $4.9 million/well. The refracks achieved average incremental 24-hour production increases of 15.3 MMcfe/d, management said.

Quarterly production in the Williston averaged 46,200 boe/d (86% liquids), down 8% sequentially and a 19% decrease versus 3Q2016. The E&P completed four gross-operated refracs on its Fort Berthold acreage during the quarter, achieving an average 30-day initial production uplift of 627 boe/d, 81% weighted to oil. Refrack costs in the Williston averaged roughly $4.5 million/well. QEP exited the third quarter with one operated rig in the Williston.

Uinta production fell to an average 59 MMcfe/d (23% liquids), down 25% from the year-ago period and a decline of 1% versus the second quarter.

Company-wide production averaged 153,500 boe/d during the third quarter versus 157,000 boe/d in the year-ago period, a decrease of 2%. Total production for the quarter was 14.124 million boe, including 4.8 million bbl of oil, 46.7 Bcf of natural gas and 1.5 million bbl of natural gas liquids (NGL).

Net realized prices were $47.67/bbl for oil, $2.79/Mcf for gas and $21.28/bbl for NGLs, versus year-ago net realized prices of $43.93/bbl, $2.64/Mcf and $12.26/bbl, respectively.

Revenue for the quarter totaled $390.1 million versus $382.4 million in the year-ago quarter.

QEP reported a quarterly net loss of $3.3 million (minus 1 cent/share) versus a net loss of $50.9 million (minus 21 cents) in 3Q2016.