Denver-based Extraction Oil & Gas Inc., whose exploration focus is trained in the Denver-Julesburg (DJ), is forecasting full-year 2018 net volumes to jump up to 76% year/year, averaging 87,000-93,00 boe/d, even with capital spending slightly below 2017.

Drilling and completion capital expenditures (capex) are set at $770-840 million, with land and other capex predicted to be $120-150 million. In the coming year, Extraction plans to drill up to 175 wells gross in Colorado with up to 190 slated to be completed and 175 turned to sales.

“We are looking forward to a robust 2018 as we expect to realize additional capital efficiencies driven by the development of our high-quality acreage in the city of Greeley along with drilling a higher mix of long laterals across our development program,” said CEO Mark Erickson.

The coming year’s capex program is “modestly smaller” than this year, but as output and cash flow continue to grow, assuming $50.00 West Texas Intermediate crude oil and $3.00/Mcf Henry Hub natural gas prices, “we expect our capital program to be funded within our cash flow from operations sometime in the second half of 2018.

“We also have some exciting spacing and optimization tests planned for our Broomfield and Hawkeye areas along with results forthcoming for our Grover area and a host of other high-potential projects.”

Extraction is negotiating third-party financing for infrastructure related to its Broomfield and Hawkeye areas, which is not included in capex guidance, that may include joint ventures or preferred equity financings.

To navigate the high line pressures impacting northern portions of the Wattenberg field in the DJ, Extraction’s turn-inline efforts are to be focused primarily on the southwestern acreage, where it expects to have “ample” gas gathering and processing capacity until a DCP Midstream project is completed next year, said the CEO.

“I think Extraction is uniquely positioned to execute efficiently and effectively despite the line pressure issues most operators have been facing in the northern portion of the Wattenberg,” Erickson said.

“Specifically, over 75% of our core DJ Basin acreage is in areas outside of DCP’s gathering system and has ample capacity and multiple options to service our growth needs while we await the completion of DCP’s expansion projects.

“We have taken the line pressures into account in both our guidance and our operational plans as we’ll be completing and turning-inline wells on our southwest Wattenberg acreage while we await the expansion in the northern Wattenberg.”