Mail Stop 4628
August 22, 2018
Via Email
Russell T. Kelley, Jr.
Chief Financial Officer
Extraction Oil & Gas, Inc.
370 17th Street, Suite 5300
Denver, Colorado 80202
Re: Extraction Oil & Gas, Inc.
Form 10-K for Fiscal Year Ended December 31, 2017
Filed February 27, 2018
File No. 001-37907
Dear Mr. Kelley:
We have limited our review of your filing to the financial statements
and related
disclosures and have the following comments. In some of our comments, we may
ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing
the requested
information or advise us as soon as possible when you will respond. If you do
not believe our
comments apply to your facts and circumstances, please tell us why in your
response.
After reviewing your response to these comments, we may have additional
comments.
Form 10-K for the Fiscal Year Ended December 31, 2017
Item 2. Business and Properties, page 7
Oil, Natural Gas and NGL Data, page 11
Proved Undeveloped Reserves ("PUDs"), page 13
1. Your discussion of changes in PUDs indicates that you converted 43,798
MBoe to proved
developed producing reserves during 2017 but appears to omit other
changes in your
reported PUD volumes that occurred during the year. Review and revise
this disclosure
as necessary to disclose all material changes in proved undeveloped
reserves that
occurred during the year. See Item 1203(b) of Regulation S-K.
2. Disclosure in your 2017 10-K indicates that you had 97 drilled but
uncompleted wells on
a one-mile equivalent basis as of December 31, 2017, while disclosure in
your 2016 10-K
Russell T. Kelley, Jr.
Extraction Oil & Gas, Inc.
August 22, 2018
Page 2
indicates that you had 92 such wells as of December 31, 2016.
Separately, disclosure in
your 2017 10-K indicates that you drilled 186 gross wells and completed
198 gross wells
during 2017. Please provide us with a supplemental reconciliation of
your beginning and
ending drilled but uncompleted wells, on an actual well basis, for
2017. As part of your
response, indicate the reserve quantities associated with drilled but
uncompleted locations
as of the beginning and end of 2017.
3. Tell us whether you consider drilled but uncompleted wells to be
developed for purposes
of classifying reserves as developed or undeveloped and for purposes of
evaluating
compliance with the five year limitation on proved undeveloped
reserves. To the extent
you consider the wells to be developed for these purposes, explain to
us the basis for this
view. As part of your response, for uncompleted wells as of December
31, 2017, tell us
the remaining costs to complete the wells and how those costs compare
to the costs of a
new well. Additionally, describe, in reasonable detail, the remaining
work necessary to
complete the wells and the specific schedule under which that work will
be completed.
Item 8. Financial Statements and Supplemental Data, page 88
Notes to Consolidated Financial Statements, page 97
Note 15 Supplemental Oil and Gas Reserve Information (Unaudited), page 132
4. Your disclosure of the principal sources of change in your standardized
measure of
discounted future net cash flows includes an adjustment for "Other."
Provide us with a
reasonably detailed description of the nature of this adjustment.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Jeannette Wong, Staff Accountant, at (202) 551-2137 or me
at (202)
551-3489 with any questions.
Sincerely,
/s/ Brad Skinner
Brad Skinner
Senior Assistant
Chief Accountant
Office of Natural
Resources