PDC Energy Inc. continued to lean on its core assets in the Denver-Julesburg Basin during the third quarter, while it built momentum and further delineated its position in the Permian Basin’s Delaware sub-basin, which also helped push up the oil volumes.

The company produced 8.5 million boe, or 92,500 boe/d during the quarter, an increase of 42% from the year-ago period and 5% from 2Q2017. Oil production accounted for 40% of third quarter volumes and increased 47% from the year-ago period.

PDC has increasingly focused on a wetter production mix in recent years, divesting assets in the Appalachian Basin and deferring activity in Ohio’s Utica Shale in favor of the Delaware and Colorado’s Wattenberg field, where it focuses on the Niobrara and Codell formations. The company acquired its West Texas assets in a $1.5 billion deal last year for properties in Reeves and Culberson counties, where it focused on building a program into its core this year.

The Wattenberg backstopped PDC’s third quarter results. The field accounted for 77,580 boe/d, up about 3% from 2Q2017. PDC drilled 46 wells and turned-in-line 39 in the Wattenberg during the quarter. Increased drilling efficiencies, bolt-ons and acreage swaps during the quarter also allowed it to drop from four to three rigs in the play this month.

Delaware volumes continued to grow, reaching 12,845 boe/d for an increase of 28% from 2Q2017. The company drilled six wells and turned-in-line four in the sub-basin. The Elkhead well, which is testing the Wolfcamp Shale’s B interval and has yet to reach peak production, has flowed at 2,250 boe/d for the last 45 days. The Lost Saddle well in the Wolfcamp A, which is the company’s first to use an enhanced perforation completion, had an average 30-day peak production rate of 1,450 boe. Three rigs are now in operation in the play.

However, the exploratory efforts haven’t been without snags. Following a “detailed technical evaluation” of the western acreage block in the Delaware, management said it decided that future drilling is unlikely to take place before leasehold expires. The company was forced to record a $252.7 million impairment on 13,400 net acres, which pushed down profits for the third quarter.

Executive Vice President Lance Lauck, who handles corporate development, said the western area accounts for 40 of the 785 Delaware locations. PDC plans to update its inventory early next year as delineation efforts continue.

PDC reported an average realized price of $27.35/boe for the third quarter, compared with $23.62/boe in the year-ago period. Revenue increased on higher volumes from $163.9 million in 3Q2016 to $183.2 million.

The one-time impairment, combined with $41.9 million of capital expenses related to two dry holes in the Delaware, contributed to a net loss of $292.5 million (minus $4.44/share), versus a year-ago net loss of $23.3 million (minus 48 cents).