SRC Energy Inc. (SRCI) Issues Preliminary Q3 Result

SRC Energy Inc. (NYSE American: SRCI) (“SRC” or the “Company”), an oil and gas exploration and production company focused in the Denver-Julesburg Basin, today issues preliminary third quarter 2018 operating results, provides an operations update and announces its third quarter 2018 earnings release and conference call date.

Production and Average Realized Pricing Summary

Lynn A. Peterson, Chairman and CEO of SRC Energy Inc., commented, “The commissioning of Mewbourn 3 progressed as anticipated and operators have experienced varying levels of relief, depending upon the location of production. During September, we were able to maintain more consistent production flows and to systematically turn recently completed wells to sales. However, as expected, the plant reached capacity quickly but we expect to continue to see some incremental improvement throughout the entire system as pressures stabilize. With the continued completion of high quality wells in the Basin, it is imperative that planned midstream expansions, including DCP Midstream’s O’Connor 2 plant, continue to move forward as expected.”

Operations and Guidance Update

The table below details current activity:

In anticipation of the Mewbourn 3 plant opening, SRC added a second completion crew in June 2018 and will maintain the two crews through year-end to complete certain pads ahead of the onset of winter and in anticipation of the O’Connor 2 plant expansion in the spring of 2019. Drilling and completion capital expenditures for the three and nine months ended September 30, 2018 were approximately $178 million and $408 million, respectively, the majority of which continues to be funded by operating cash flows.

The table below details selected results for the three and nine months ended September 30, 2018 and current full-year guidance:

The Company has tightened its full year 2018 production guidance to approximately 50 Mboe/d as a result of gas processing developments and incremental increases reflecting the second closing of the GCII acquisition. In addition, SRC has adjusted guidance for drilling and completion capital expenditures to approximately $580 million from prior guidance of $540 million. The increase reflects a combination of the additional wells that are now expected to be completed during the year due to efficiency gains, recent acreage trades and acquisitions that have led to higher working interests across our operating areas, as well as higher than expected non-operated activities.

Greeley Crescent II - 2nd Closing

The Company recently closed the second portion of the Greeley Crescent II transaction, acquiring both vertical and horizontal producing wells. Production associated with these wells at the time of closing was approximately 3,000 BOE/d and the final purchase price was $64 million.

Management Comment

Mr. Peterson commented, “Our team continues to operate in a safe and efficient manner while working closely with the communities where we operate. We understand what is at stake in the upcoming elections and feel that our Company, along with our industry, has taken the appropriate steps to protect the future of the Colorado oil and gas industry and we look forward to working with our elected officials.”

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