Abraxas Petroleum Corporation (AXAS) Q2 2018 Earnings Conference Call Transcript
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Abraxas Petroleum Corp (NASDAQ: AXAS)
Q2 2018 Earnings Conference Call
Aug. 8, 2018, 11:00 a.m. ET
Contents:
Prepared Remarks
Questions and Answers
Call Participants
Prepared Remarks:
Operator
Good day, ladies and gentlemen, and welcome to the Q2 2018 Abraxas Petroleum Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions)
I would now like to introduce your host for this conference call, Mr. Steve Harris. You may begin, sir.
Steven Harris -- Director of Finance and Capital Markets
Good morning. Thank you, Kevin, and welcome to the Abraxas Petroleum second quarter 2018 earnings conference call. Bob Watson, President and CEO of Abraxas joins me today. In addition, we have our Chief Accounting Officer and VP of Operations, Land and Engineering available to answer any questions you may have after Bob's overview. As a reminder, today's call is being taped, and a webcast replay will be available immediately after the conclusion of the call.
I'd like to remind everyone that any statements made during this call that are not statements of historical fact are considered forward-looking statements, and actual results could vary materially from those contained in these statements. Factors that could cause our actual results to vary are described in our filings with the Securities and Exchange Commission, and I would encourage everyone to review the risk factors contained in these filings and in our press releases.
I will now turn the call over to Bob.
Robert Watson -- President and Chief Executive Officer
Thank you, Steve, and I must say that -- I understand that there are lot of conference calls at 10:00 AM on Central Time, both today and yesterday. So we're going to endeavor to change our time going forward, it's not that we're trying to play games, but we're trying to give more people an opportunity to not have a conflict of listening to conference calls.
So, with that being said, I'm not going to dwell on our press release, it was pretty self-explanatory. Production was lower because we had to shut in more wells than originally anticipated for offset frac protection. When we started the quarter we knew which of our wells we would have to shut-in and for approximately how long, but we didn't know where frac plans by two offset operators that ended up fracking during the quarter. That caused us to shut in even more wells. All total, we shut in 18 wells for various amounts of time during the quarter. 18 high-volume wells has a significant impact on a company our size. And furthermore, you can't predict how fast they'll come back on and achieve previous rates. Some came right back on, some are still cleaning up. The good news is none appear to be permanently damaged. Further good news, current production is in excess of 11,000 Boes per day.
So, how does the third quarter look? We continue to drill with one rig in each of the Bakken and the Delaware, approximately one, plus a fraction of a well per month in each area. In West Texas, the two-well Greasewood pad in which we own 100% interest, finished fracking yesterday. We pumped 100% of design prop in 53 stages. We're moving in a coiled tubing unit this morning to start drilling up frac plugs which is the first step in getting the wells ready for flow back which we hope to be on and around mid-August.
We currently have 10 DUCs; eight in the Bakken where we have roughly a 50% working interest; two in the Delaware, where we have a 73% working interest, all scheduled to start fracs in mid-September. So you should expect flowback spread out in October and November. We also will have one more Delaware well to frac in November and it's 100% well as well. When you add up all the new production from our published type curves on each of these new wells and DUCs to be completed, you can see our confidence in our year-end guidance.
On Permian takeaway, we have no change to report from our Q1 call. Our gatherer, Targa, assures us, we will have adequate takeaway for our existing barrels and any new barrels on their system. Our Caprito area is now 100% on Targa pipeline. However, in West Texas, we are price takers.
Now onto some interesting facts. Our Caprito 99 downspacing pad where we have two wells in the Upper Wolfcamp A-1 660 feet apart and 150 feet apart vertically from the Upper Wolfcamp A-2, and two wells in the Upper Wolfcamp A-2 660 apart, one of which is 660 feet from our original Wolfcamp A-2 producer, which has now been on production about two years. The four wells have been on production about one month. There is still flowing on choke, still inclining, so the data is still very, very preliminary.
Even though we frac-protected the original well by pumping water into it to hold pressure, it was still a low pressure sink as it had been on production for around two years. And during the two closest offset fracs, it took many hits. When we put it back on production after the fracs, it flowed water for over a month before producing oil and it's still cleaning up. Hopefully, there is no permanent damage. But definitely a parent-child relationship that we can only quantify with future production data. The two closest wells in the A-1 and the A-2 are lower pressure and lower rate with the A-2 which is in the same zone as the parent well being the lowest. We're currently analyzing our micro seis and tracers to help with new well-to-well interference. Production data will also help there. All-in-all, it's too early to make spacing statement on -- but we do have a definite parent-child relationship.
In closing my remarks, I would like to emphasize the news on Abraxas that will be forthcoming in the near future. We'll have 30 day peak rates on seven Bakken, four Delaware wells. We'll have initial results on our 100% owned Greasewood two-well pad. We're going to update you with our data analysis and current thinking on Delaware spacing. We're also going to update our current land activities in the Delaware with the new map showing our new Delaware footprint. It's changed considerably all for the better. We'll also show you a new inventory in the Delaware both on a gross and net future location basis, on both 660 spacing or 1320 spacing. And new for the first time, we're going to look at or give you our view on the present value of each new location and each of four or five zones. Our conference season starts late August, we hope to have all of this out to you before then.
I'll now open it up for questions.
Questions and Answers:
Operator
(Operator Instructions) First question comes from John Aschenbeck with Seaport Global.
John Aschenbeck -- Seaport Global -- Analyst
Good morning, Bob. Thanks for taking my questions.
Robert Watson -- President and Chief Executive Officer
Good morning, John.
John Aschenbeck -- Seaport Global -- Analyst
The first one, I wanted to dig into your progression in the second half of the year a little bit more, both on the production and the CapEx front. I've got July production over 11 MBoe per net (technical difficulty).
Robert Watson -- President and Chief Executive Officer
Hello? Hello? John, if you can hear me -- you cut out.
Operator
Yeah, it looks like he might have lost service on his phone.
Robert Watson -- President and Chief Executive Officer
Okay, we'll go onto the next one then.
Operator
I'm not actually showing any other questions, would you want me to repeat the instructions?
Robert Watson -- President and Chief Executive Officer
Yes, go on and repeat and we'll see if he wants to call back.
Operator
Sure. (Operator Instructions) Our next question comes from Eric Engel with Stifel.
Eric Engel -- Stifel -- Analyst
Hi, good morning.
Robert Watson -- President and Chief Executive Officer
Good morning, Eric.
Eric Engel -- Stifel -- Analyst
Hey. Just wondering how does the parent-child interference effect your future spacing? I mean, how you're going to develop the acreage?
Robert Watson -- President and Chief Executive Officer
Well, it's too early to tell for sure. Obviously, there will be a parent-child relationship. The immediate impact will be, we will -- when we go into a full development mode, we will make sure that we are minimizing the amount of time between the parent and the child. It's difficult to do in places where you have your initial wells on one section and then the rig leaves for a while and then comes back eventually. But a lot of that's going to be dictated by analysis of the data that we get over the next several months. The more production data we get, the better feel we'll have for the parent-child relationship. I've seen others indicate that it's about an 80% -- or it's 80% of what the parent does to the child. If that's the case, then it shouldn't really impact our future plans going forward as that will still be extremely economic.
Eric Engel -- Stifel -- Analyst
Okay, thanks. And then what's the status of the acquisitions and when do you expect them to close? And then, is there more opportunity out there to add additional acreage?
Robert Watson -- President and Chief Executive Officer
We're always looking, we're dealing on a number of deals right now. Some of them are in the very, very final stages and those are the ones that we'll update you on, on the next release you hear from us. And there are some opportunities to pick up additional acreage. We're very mindful of the economics. We know that there is a price that we can pay that makes our operation not attractive from an economic standpoint, so we're not going to exceed that number. Luckily, we've been able to continue to cobblegate [ph] acreage together little by little at an attractive price that it does allow us to have a good rate of return. So I've said before that I think the consolidation swapping game will probably be over by the end of this year, not only from us but everybody, because everybody is doing that right now but there will be limited opportunities on a go-forward basis. And hopefully, everybody, including ourselves, will have our blocks in good shape for an effective development program going forward.
Eric Engel -- Stifel -- Analyst
Great. Thank you very much.
Robert Watson -- President and Chief Executive Officer
Thank you.
Operator
(Operator Instructions) And I'm not showing any further questions at this time, I'd like to turn the call back over to our host.
Steven Harris -- Director of Finance and Capital Markets
Right. We appreciate everyone's participation in the Abraxas earnings conference call today. As I mentioned at the start of the call, a webcast replay will be available on our website and a transcript will be posted approximately in 24 hours. Thanks, everyone, and have a great day.
Operator
Ladies and gentlemen, that concludes today's presentation. You may now disconnect and have a wonderful day.
Duration: 12 minutes
Call participants:
Steven Harris -- Director of Finance and Capital Markets
Robert Watson -- President and Chief Executive Officer
John Aschenbeck -- Seaport Global -- Analyst
Eric Engel -- Stifel -- Analyst
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