Greetings, and welcome to the Gulfport Energy Corporation Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jessica Wills.
Thank you. You may begin.
Thank you, and good morning. Welcome to Gulfport Energy Corporation's Q3 of 2018 earnings conference call. I am Jessica Wills, Director of Investor Relations. Speakers on today's call include Donnie Moore, Interim Chief Executive Officer and Keri Kroll, Chief Financial Officer. In addition, with me today available for the question and answer portion of the call are Paul Heerwagen, Senior Vice President of Corporate Development and Strategy and Ty Peck, Senior Vice President of Midstream and Marketing.
I would like to remind everybody that during this conference call, the participants may make certain forward looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance and business. We caution you that the actual results could differ materially from those that are indicated in these forward looking statements due for a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we may make reference to other non GAAP measures. If this occurs, the appropriate reconciliations to the GAAP measures will be posted on our website.
Yesterday afternoon, Gulfport reported Q3 of 2018 net income of $95,200,000 or $0.55 per diluted share. These results contain several non cash items including an aggregate non cash derivative loss of $4,100,000 an expense of $917,000 in connection with a litigation settlement, a gain of $2,700,000 in connection with the sale of additional common stock held in Mammoth Energy Services following the underwriters' partial exercise of adoption granted in the June 2018 offering and a gain of $12,900,000 in connection with Gulfport's interest in certain other equity investments. Comparable to analyst estimates, our adjusted net income for the Q3 of 2018, which excludes all the previous mentioned items, was 84 point $6,000,000 or $0.49 per diluted share. An updated presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review this at your leisure.
At this time, I would like to turn the call over to Donnie Moore.
Thank you, Jessica. Welcome, everyone, thank you all for joining this morning. We had a solid Q3. I look forward to discussing it in more detail with you in a moment. First, I want to acknowledge the other announcement we made yesterday afternoon about Mike stepping down from his positions and resigning from the Board.
We've been very transparent, and there isn't much to add what we disclosed in our press release and filing yesterday. The Board has asked me to take charge, and that's what I plan to do. I have more than 3 decades of experience in the E and P industry, and I've had most of the year now as COO to get to know the team, the operations and the assets here at Gulfport. So your expectation of us should be that we'll drive forward and my aim is to raise the bar. I met with our team yesterday after the announcement.
We're all focused on moving forward. The Board and I will continue to act in the best interest of Gulfport, keeping our shareholders foremost in mind. In this spirit, we will be disciplined capital allocators and remain focused on developing attractive opportunities to enhance value and deliver profitable growth. With that, I want to move ahead to discuss our Q3 performance. As announced in our earnings report yesterday, for the Q3 of 2018, Gulfport reported approximately $84,600,000 of adjusted net income on $365,100,000 of adjusted oil and natural gas revenues and generated approximately $238,800,000 of adjusted EBITDA.
The Q3 marked a strong operational quarter for Gulfport, delivering a 7% increase in total production per day over the Q2 of 2018 and experiencing strong price realizations across all of our products. Total net production averaged approximately 1,430,000,000 cubic feet of gas equivalent per day, increasing 19% year over year and driven by the continued outperformance of our base production wedge and active turn in line scheduled in both of our core asset areas and an increase in ethane recovery during the quarter. Our midstream and marketing teams continued to enhance the value received for all of our products. And with the improvement in ethane prices during the Q3, Gulfport elected to adjust our ethane recovery in both the Utica Shale and SCOOP to optimize the barrel composition and maximize the value received for the NGL stream. On the natural gas front, we continue to benefit from our diversified portfolio as well as capitalize on opportunities created through the ever changing flow dynamics within the basins.
And during the 1st 9 months experienced very strong pricing for our natural gas, leading us to narrow anticipated 2018 gas differential alongside earnings yesterday evening. With regard to expenses, our total per unit operating expense during the quarter equaled $0.96 per Mcfe and when coupled with our strong price realizations resulted in adjusted EBITDA increasing 12% over the Q2 of 2018 and 22% over the Q3 of 2017. Driven by strong resource performance year to date and forecasted activity for the remainder of the year, we have again increased our 2018 production guidance and we now anticipate our total net production during 2018 will be in the range of 1,360,000,000 to 1,370,000,000 cubic feet of gas equivalent per day, an increase of 20 5% to 26% year over year. During the 9 months ended September 30, Gulfport's D and C capital totaled $638,100,000 and non D and C capital totaled $96,300,000 We remain committed to spending within the range of our previously provided capital budget, now forecasting total capital invested during 2018 to be within the book end of the range and approximately $815,000,000 for the full year. Capital spend will decrease significantly during the Q4 of 2018, with activity decreasing quarter over quarter and remaining nimble in our operations to adhere to our commitment of capital discipline in the 2018 capital budget.
Considering our large DUC inventory we hold in the Utica, totaling approximately 55 gross wells today, We have adjusted our activity during the Q4 to further emphasize our commitment to the 2018 capital budget, and we currently do not have a rig running in the play today. Lastly, completion activity in both the Utica and SCOOP concluded during the Q3 of 2018, and we do not expect to resume this activity until the beginning of 2019. Consistent with our previous comments, we are devoted to recognizing the most value for our shareholders as we evaluate the best uses of our available liquidity. During 2018, Gulfport has reduced our net debt levels and as of September 30, our leverage ratio decreased to 2.14 times at the low end of our targeted range and down from 2.6 times at year end 2017. Year to date, we have repurchased $110,000,000 of Gulfport shares in the open market and approximately $90,000,000 remains under the current authorization.
As of September 30, we had reduced the amount outstanding on our revolving credit facility to $60,000,000 and held $125,000,000 in cash on the balance sheet. Now the details. In the Utica, during the 1st 9 months of 2018, we spud 23 growth wells, utilizing on average 2 operated rigs. The wells had an average drilled lateral length of 10,350 feet, an increase of 27% over 2017. And when normalizing to an 8,000 foot lateral, we averaged a spud to rig release of 19.5 days, in line with our full year 2017 result and highlighting the consistency of the drilling phase in our Utica operations.
Turning to completions in the Utica shale, we completed 37 wells during 2018, averaging 5.3 stages per day and completing a stage total count of 1471 stages. During the 1st 9 months of 2018, we turned to sales 28 gross dry gas wells in the Utica with an average lateral length of 7,700 feet. This level of activity has led to very strong production from the asset, averaging 1,140,000,000 cubic feet equivalent per day during the 3rd quarter, an increase of 7% quarter over quarter and 16% year over year, as well as marking another quarter with a record level of net production for the asset. During the Q4, we plan to turn to sell 7 gross operated wells in the Utica, bringing our 2018 total to 35 gross wells turned to sales throughout the year. The Utica continues to be very Switching over to the SCOOP, we continue to see improvement in our drilling phase.
And during the 1st 9 months of 2018, we spud 12 gross wells in the play, including 11 Woodford and 1 Sycamore well, utilizing on average 3 operated rigs in the play. The wells released had an average lateral length of 8,100 feet, an increase of 10% over 2017 and when normalized to a 7,500 foot lateral, averaged a spud rig release of 64.9 days, a 10% improvement from our 2017 program average. When analyzing the wells released to date in the 2018 program, consistent with my comments from last quarter, roughly 40% of the 2018 Woodford well set have had a spud to rig release of 48 days or less and 60% have been drilled in 56 days or less. As a reminder, in 2017, Gulfport had 0 wells with a spud to rig release of less than 50 days. Our improvement continues to be further highlighted by establishing a new Gulfport record of releasing a well with a spud to rig release of just 43 point 7 days during the Q3.
As you can see, our focus on identifying, implementing and realizing efficiencies in the play is yielding results. We look to continue to build upon this momentum into the Q4 2019, remaining focused on identifying areas of improvement, not only to decrease drill days, but ultimately maximize value for every dollar we invest. On the completion front, during the 1st 9 months of 2018, we turned to sales 15 gross wells, including 14 Woodford and 1 Sycamore well with a stimulated lateral length of 7,750 feet. While running one completion crew throughout the year, we averaged 3.82 stages per day and completed 4 26 stages in total. Production during the quarter averaged 274,600,000 cubic feet equivalent per day, an increase of 11% quarter over quarter and 41% year over year.
Alongside earnings yesterday evening, we provided both initial and longer dated production results on several Woodford wells as well as our Upper Sycamore well, which I'll touch on further in a moment. And as you can see, we continue to see great results from the Woodford well set and remain very encouraged as we gain additional longer term production history on a larger set of wells. During 2018, we shifted our program to largely focus on full section development in the SCOOP, both in the drilling and completion phase of the operation, allowing us to realize cost efficiencies, maximize fracture complexity and have efficient resource recovery. Full section development allows us to take our learnings from the initial well and apply those to the remainder of the well set in the section. Optimization of the well design, casing requirements, tool selection are all refined with every well we drilled, driving performance increases and decreasing days well over well.
Observing the completion results, wells completed within the full section regime are yielding very strong results, benefiting from increased wellbore connectivity achieved during simultaneous completions. Our learnings to date led us to adjust our completion activity in the SCOOP, moving a few of the anticipated turn in lines expected late in the Q4 to early 2019 when we estimate drilling to be completed within the section and the completion of these wells can occur simultaneously. With regard to exploration activity, during the Q3, we turned to sales our Miller 8 well targeting the Upper Sycamore formation. While the well is still in the very early days of production, it has a strong liquids cut, producing approximately 46% oil on a 2 stream basis and 63% liquids on a 3 stream basis, confirming our expectation of this Upper Sycamore's potential for being a more liquids rich resource. We look forward to gaining more production history on the well.
And as we plan for additional Sycamore development in 2019, we are focused on the optimal development scheme for resource recovery, both in terms of density and timing of the development with respect to all producing horizons in the formation. As a reminder, during 2017, Gulfport co developed our Serenity well targeting the Lower Sycamore solid formation in conjunction with our Wyndham well targeting the Woodford, with the goal of receiving early indication of what co development could potentially look like across these two horizons. While it is still early in the long term development of these wells, we have seen outstanding results. After roughly 300 days online, the Serenity and Wyndham wells continue to outperform the type curve on a daily basis. And when normalizing to the Woodford wet gas type curve, the Serenity has cumulatively produced approximately 80% above the type curve after 300 days online.
And the Wyndham is well over 100% above the type curve since turning to sales. Proving there is a significant amount of resource in place and the co development of these zones provides strong results. As we plan for 2019, we're including the Sycamore into our development plan in a more meaningful way and currently plan to co develop a unit as part of our 2019 program, targeting multiple producing horizons in the play, the Woodford, Lower Sycamore Solid and Upper Sycamore Shale at the same time. In summary, we've learned a lot over the last year and a half, but we still have more to learn. We're very excited with the results to date out of the play.
It's no longer a question of if we have the resource, but now how do we get the most out of it, maximizing our recoveries and value across the play. With that, I will turn the call over to Keri for her comments.
Thank you, Donnie, and good morning, all. Goldford's 3rd quarter production came in ahead of expectations and, as Donnie mentioned, was driven by the continued strong performance of the existing asset base, turn in lines in both our core asset areas and increased ethane recovery. Production averaged 1,430,000,000 cubic feet of gas equivalent per day and consisted of 89% natural gas, 8% natural gas liquids and 3% oil. Based on results year to date and our forecasted activities for the remainder of the year, we now forecast our full year 2018 average daily production to be in the range of 1.36 1,000,000,000 to 1.37000000000 cubic feet per day, an increase of approximately 25% over 2017. On the realizations front, during the 1st 9 months of 2018, our realized natural gas price before the effect of hedges and including transportation costs settled $0.59 per Mcf below the average NYMEX price.
Based upon actual results and utilizing current strip pricing at the various regional pricing points at which the company sells its natural gas, we have narrowed our full year guidance and we now forecast to average in the range of 0 point $8 to 0 point 61 dollars per Mcf below NYMEX settlement prices in 2018. During the 1st 9 months of the year, before the effect of hedges, our realized oil price came in at $1.83 off WTI. Given the strength we have seen in oil pricing in all of our operating areas, we have updated our full year guidance and now expect to realize approximately $1.75 to $2 off WTI during 2018. Our realized NGL price came in approximately 45% of WTI, and we reiterate our expectation to realize 45% to 50% for NGLs during 2018. Our realized prices continue to be supported by our hedge position.
And during the 1st 9 months of 2018, we realized a settlement gain of $0.03 per Mcfe. Maintaining a strategic hedging program is an important element supporting the long term development of our assets and we will opportunistically layer on additional hedges and basis swaps to provide line of sight to our realizations and cash flows. For the 1st 9 months of 2018, our strong realized prices and hedge position resulted in adjusted oil and gas revenues of $1,050,000,000 which is composed of approximately 76% natural gas revenue and 24% liquids, including 13% natural gas liquids and 11% oil. In terms of cash operating expenses, our per unit operating expense, which includes LOE, production tax, midstream gathering and processing and G and A, totaled $0.94 per Mcfe during the 9 months ended September 30, down 2% from the 2nd quarter of 2018 and down 8% when compared to the full year of 2017. When coupled with our realized pricing uplift, we expanded our adjusted EBITDA and generated approximately $700,300,000 of EBITDA during the 1st 9 months of 2018.
As previously mentioned, we remain committed to our full year 2018 total capital budget and forecast to invest approximately $815,000,000 across our assets. Moving on to the balance sheet. As of September 30, 2018, Gulfport's net debt to EBITDA ratio decreased to 2.14 times. And based on our projected cash flows from the remainder of the year, at current strip prices, we forecast our leverage ratio at year end 2018 will be at or below 2x. I will now turn the call back over for closing remarks.
Thank you, Carrie. In closing, we continue to see outstanding performance from the resource base, exceeding our production estimates and increasing our 2018 production guidance, while remaining dedicated to funding our 2018 activities within cash flow and spending within the range of our previously provided guidance. As we exit 2018 and head into 2019, we are committed to sustainable cash flow discipline as we allocate capital. As we've highlighted in the past several quarters, funded entirely within cash flow at current strip prices, we are able to generate low double digit growth in 2019. This program is supported by the tremendous assets in our portfolio, which only require investment of approximately $500,000,000 in maintenance capital mode, which yields significant free cash flow at current strip prices and providing meaningful growth capital to be reinvested across our low cost resource base.
As we consider our plans for 2019 and beyond, Gulfport's investment of future cash flow, whether into the assets, returning cash to shareholders or debt repayment may vary over time, but will be underpinned by disciplined, thoughtful allocation process centered around recognizing the most value with every dollar invested. This concludes our prepared remarks. Now, as I'm sure you can appreciate, you're the first of many stakeholders we're touching base with today. With the time we have left for questions, I'd like to focus on our results and our business. As a team, we're moving forward and that's what we're focused on.
Operator, please open the phone lines for questions from the participants.
Thank you. At this time, we will be conducting a question and answer Our first question is from Neal Dingmann from SunTrust. Please go ahead.
Good morning, Donnie, Donnie, my first question, you referenced just at the end that the Utica certainly is a great cash flow vehicle. I'm wondering when you look at it for 'nineteen, do you plan to use this more as a cash flow vehicle to grow the SCOOP or you'll grow the Utica sort of independently also?
Yes. Good morning, Neil. I mean, that is a great benefit of having such a resource, such an asset like the Utica continues to deliver day in, day out for us. As we go into 2019, that's definitely an option for us. As we've always talked about continuing to shift more and more of our capital over toward the SCOOP.
I think 2019 with the DUC inventory I mentioned as well, the 55 DUCs, it's a little different dynamic as we begin to bring that inventory back down to more of a working inventory for us. But yes, great option for us and definitely on the table.
Okay. Okay. And then when you
look at the SCOOP, could you talk
a little bit about more just from a higher level how I know since you've been there, what you when you're looking at the SCOOP, the cost and sort of the results you're seeing, I know you did that one test here just recently on more of the Sycamore, But just nor the SCOOP, I guess, would for some of the more common results. Could you talk about cost and results and what you anticipate maybe changing for 'nineteen?
Absolutely. Yes. I mean as far as performance results from the well set, from the resource itself, I mean we continue to see just outstanding results there. Very excited about that as we've talked every quarter about our efficiencies that we're gaining on the drilling and completion side. We've continued to see that well after well.
I mentioned a little bit on my prepared remarks about the things we see in more of a development mode going from the first well to that 8th well or whatever in a section and the learnings we get and the improvements we see across that well set. So as I also mentioned, going into 2019, we're looking at more co development. And in that co development, you start getting completions, as well as the things that we don't talk about a lot with our facilities and infrastructure. So yes, efficiencies, cost will continue to go down as we get into co development next year and excited to see that play out.
Our next question is from Jason Wangler from Imperial Capital. Please go ahead.
Good morning, all.
Good morning, Jason.
Maybe kind of taking Neil's question a little further, just was curious with the results that you've had in the Sycamore so far, it looks pretty good. What's that balance that you're thinking as you look at 2019, maybe in a percentage of how many wells you kind of target the Woodford versus the Sycamore? Or how should we think about kind of the activity specifically into there given the results you've seen so far?
Yes, great question, Jason. And yes, we're very excited about what we're seeing, whether it's the lower Sycamore, the solid or what we just released there on our Miller well and that's upper Sycamore and the liquids content there. So as we're thinking about and I won't get into percentages, but as we're thinking about 2019 co development, Upper Sycamore, Lower Sycamore, Woodford, we will have a test next year of more of a cube type development in a section, testing all of those. And again excited about each of those targets and what they're delivering for us.
Jason, as we think about next year, that cube development Donnie mentioned, we feel like that's important from an aerial extent perspective. We feel like the Sycamore is pretty well derisked both from our activity and others. Really what we're here to get some color on is that density components. And so with regard to 2019, while we're not giving specific percentages on activities within each zone, it will include some density work to understand that.
That's helpful. And maybe one more on that, if I could too. I mean, the Woodford seems to be pretty well delineated across the entire acreage position. I mean, how do you feel how far along, as you were just saying, Paul, do you feel the Sycamore is? Is it still some work to be done kind of for the full extent of the acreage?
Or do you feel pretty good about it across the entire position?
Yes, Neal, this is Donnie Jason, this is Donnie. Yes, we feel good about it, as Paul mentioned. Now we're kind of focusing in on what's that density look like in more of a co development of all those zones. So yes, I mean, as you said, Woodford has had phenomenal results across the play, and we'll continue to work on that co development and again looking at density.
Your next question is from Ron Mills from Johnson Rice. Please go ahead. Ross,
just to follow-up on this co development concept. Donnie, I think you mentioned the Cerneo wells running 80% above your type curve, your Wyndham wells 100%. I know in terms of the Woodford, your Woodford wells are also running above type curve. Just curious of your thoughts in terms of what drove that level of outperformance in the serendipity in Wyndham? Do you think it's related to the co development of the 2 zones and just getting a better connectivity or just curious of what your thoughts are that have driven that co development and I'm assuming that's what's leading you to do more of that next year?
Yes, Ron. Thanks for that. Yes, I mean, those are great wells. As you said and repeated the numbers there, fantastic results. And yes, I do think that co development, that fracture connectivity that we're doing there is really paying off for us.
We're seeing it some in our Woodford as well across the board. So that's why we are moving that direction. I mean, to me, that's how you maximize efficient recovery in a resource play, and that's where we're headed to now. So what's really exciting for us is now being able to layer in that Upper Sycamore onto that and that's why we want to get it tested in the ground pretty early next year, so we can really see what those results look like.
And then as it relates to the upper Sycamore, I think the concept that you were trying to prove was more oily, obviously a strong proof concept. But when you think about the upper versus the lower Sycamore, the 40 plus percent oil versus 11% oil between the upper and lower And in terms of the initial deliverability of this Miller well, can you provide a little color in terms of what you're seeing versus what you may have hoped for? Is this in line? Or are you even potentially more encouraged than what you had hoped for?
Yes. No, absolutely, Ron. What we went into this well to really prove up was that liquid content. We weren't looking for an IP24 type well. We were wanting to prove up that liquid content.
We got it. We're very, very excited that we've done that. And again, ready to start folding that into our program as we move forward. So, yes.
Okay, great. And then lastly, just in terms of activity, you talked about 55 DUCs up in the Utica. I don't know if you really have many in the SCOOP, but it seems from CapEx standpoint to keep yourself within the high end, you may be pushing some activity from the Q4 into the Q1. But when you think about activity that you had in 2018, is that a pretty good proxy in terms of what 2019 will look like? Or what are your initial thoughts in terms of 2019 in terms of how that activity ramps back up once you get back to work?
Thank you. Yes.
And I'll touch on a couple of different places there. You mentioned the activity and the capital. And yes, when you have 55 DUCs in inventory to continue to drill and add to that inventory for us in this quarter just really didn't make sense. We pushed that out. If you think about activity for next year and we haven't come out of course with what our plan is, but more than likely in both assets, you'll be starting up your completion activity in the probably very similar to what we saw in the past year.
Drilling will continue on in the SCOOP, probably closer to the level we started this year with. And then in the Utica, you're probably looking at starting a rig early sometime next year, 1 to 2 rigs. But again, we haven't finalized plans for next year, but that's kind of part of the things that are on the table for us. Thank you. Thank you, Brian.
Our next question is from Tim Rezvan from Oppenheimer. Please go ahead.
Hi, good morning folks. On the topic of the Utica economics in the wet gas part of the play are improving with stronger NGL and oil prices. I know you have about 50 DUCs. How nimble can you be in 2019 with the wet gas program? And what would you be looking for to actually make that move?
Yes, Tim, it's Paul. Obviously, don't have the 2019 plan out yet, but I can tell you that the current base case assumptions we're working from right now include us shifting some activity in the Utica back to the condensate wet gas window side of things. As Donnie mentioned, the activity there is going to be a little lower than it has been historically on the drilling side. And so that activity occurs and then probably starts actually showing up in terms of production probably in the second half of the year. But look, yes, you're on point with regard to the economics in that window.
Things have shifted in its favor.
Okay. Okay, that's helpful. The midyear kind of maybe impact. And then if I could just shift gears a bit. I know you're not here to talk about the CEO search, but I was curious if you could kind of from an organizational point of view, Donnie, maybe in your conversations with the Board, kind of maybe from the organizational point of view on management level hires, cost inflation was a big issue for you all this year and there have been kind of budget overruns for a couple years in a row.
Can you speak to the Board's thoughts on kind of on staffing and on the organization and what can be done to deliver a more disciplined budgeting process going forward?
Yes. Tim, I'll probably start off and I'll throw it to Paul to add some comments. But we've talked about that all year and that has been a focus not only with our teams, but with the Board, and we're seeing continued improvement on that side. I mean, our capital efficiency is continuing to get better. I'll point out the discipline part of it.
I mean, we're coming in toward that high end of our range, which is not where we want to be. But to take the activity down and continue to manage that, have that commitment to it, I think says something for the progress we've made and are making. And we'll continue to get better at that. And I'm excited about next year to see the fruits of it. So Paul, I don't know if you want to add something to that.
Yes.
Tim, I may add that the Board and management are continuing to collaborate on the annual planning process there. I think it's probably worth noting that with Donnie at the helm, bringing his 3 decades of management across some large cap A and P companies. We view his fresh perspective as a tremendous positive and believe his deep expertise brings an advantage to us as we head into that budgeting process. I would also add that Donnie has built out a strong team here and we're working all closely together as we head into the end of the year and very focused on putting together a good plan that can be delivered upon.
Our next question is from Holly Stewart from Scotia Howard Weil. Please go ahead.
Good morning, ladies and gentlemen. Maybe first, just a higher level question for Donnie. You talked a little bit about 2019 and sort of activity levels starting off similar to 2018 in terms of completions. You've got that slide in the deck on, I think it's Slide 8 on just the cadence for 2018. Should we expect something similar?
And I think it's been like the last few years where CapEx is very sort of front end loaded?
Right. Yes. I mean, I think as we've kind of laid out at least what we've talked about over the past few quarters, that's probably a similar type thinking. But again, since we haven't finalized that, you don't know what that back end looks like. 2019 is a lot different than we've had in the previous years, especially as Paul mentioned earlier on the drilling side.
With that DUC count, you're really not starting out with the number of rigs we've had to start off with. So whether it's drilling or completion, I don't want to guide you one way or the other because you've got some options there that could make that look different to say. I mean those are very efficient economic wells, the DUCs, and we're going to be leaning into those.
Yes.
This is Paul. I'd also add as we head into more of that full section development in the SCOOP, I think it probably knocks some of the cyclicality out of that spending too. And that change occurs over time, but probably not immediately in 2019.
Okay. That's good color. Maybe just a couple for Ty on the realization slide. It looks side, looks like the slide deck also has your NGL barrel changing a little bit. I'm assuming that's related to ethane recovery.
So I guess the question is, first, is that the case? And then is there any other things we should be thinking about like those barrel changes over the next couple of quarters?
Yes, Hollen. Thanks. This is Tom.
Yes, so this quarter we did have
the opportunities to recover a little bit more ethane in both basins, both in the Utica and SCOOP. We thought where premiums are gas streams, so we have that opportunity we took advantage of it and that's what you're seeing reflected in Slide 25. Going forward, ethane prices have come down quite a bit. And we're continuing to look on a daily basis definitely on trying to optimize the streams regards to ethane, it's not
just about the frac spread.
It's the other with regards to ethane, it's not just about the frac spread. It's the other things that the factors that we have to look at and put into play. And we've seen a nice rally in our gas prices. So we continue to optimize that and think that as we look into the rest of the year, Slide 25 kind of shows that makeup of the barrel.
Okay. Well, maybe I'll ask this to what are your recovery levels right now on the ethane side in each of those areas?
It's probably like I said,
if you look at last quarter's mix well, actually the mixture is probably best suited to show you in 25% or showing the estimate for the year end. So I mentioned that 25% to 30% across those two areas brought down a little bit of the propane recoveries. But again, I just think of it the overall barrels that we're recovering are
higher. So hopefully that helps.
Yes. And then maybe one just one last one for me on the realization for Natty. It looks like the year to date you came so far been at $0.59 You brought down the guidance. Maybe just kind of what you're seeing given all the projects that have come on here as of late and kind of how you're thinking about 2019?
Yes. 2018 has been a
really good year for us.
We feel like we were we've been waiting for this
to come on with regards to pipeline, with regards to all of our Feet commitments and then being ready to take advantage of some of the volatility that's come along with the pipelines. I think if the numbers really highlight our midstream connectivity, our downstream portfolio and then really highlights the team that we have that's daily looking at these decisions and making them for the benefit of the revenue stream. So I've been really excited and proud of the team, what they've accomplished thus far. And I think as we look into 2019, some of that continues to play out. There's still pipelines coming on.
There's still low storage numbers. And I think there's a good opportunity for us to continue to deliver same kind of results as we look into 2019 and put that into the budget. So we're really excited on that side.
That's great. Thanks, guys.
Thank you, Holly. Well, I want to thank you all for joining us this morning. We appreciate your time and interest today. Should you have any questions, please do not hesitate to reach out to our Investor Relations team. This concludes our call.
And again, this concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.