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EP Energy Corp (EPE)
Q4 2018 Earnings Conference Call
March 15, 2019, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
See all our earnings call transcripts.
Prepared Remarks:
Operator
Good morning and welcome to EP Energy's Fourth Quarter and Year End 2018 Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please also note, today's event is being recorded. At this time, I would like to turn the conference over to Mr. Jordan Strauss. Sir, please go ahead.
Jordan Strauss -- Investor and Media Relations
Thank you, operator, and good morning, everyone. Thank you for joining us today for EP Energy's fourth quarter and year end 2018 financial and operational results conference call. I hope you've had a chance to review the earnings release and the supplemental presentation we published yesterday. The earnings release and presentation are available in the Investors Section of our website at epenergy.com. Also, please note, we intend to communicate our key points on this call today and will not be hosting the Q&A session.
I'd like to remind everyone that on today's call we'll discuss forward-looking statements and certain non-GAAP financial measures. We encourage everyone to read our full disclosure on forward-looking statements and GAAP reconciliations, which can be found at the end of the Company's earnings release and our documents on file with the SEC. These documents are also available on our website.
Joining me on the call this morning are EP Energy's President and Chief Executive Officer, Russell Parker; and Senior Vice President and Chief Financial Officer, Kyle McCuen.
And with that, I'll turn the call over to Russell.
Russell E. Parker -- President and Chief Executive Officer
Thanks, Jordan, and good morning, everyone. Thank you for joining the call and your continued interest in EP Energy. For today's agenda, I'm going to start by reviewing a summary of our 2018 results and performance of our asset program. Kyle will then go through some of the key financial results and discuss our 2019 outlook. We also plan to do something a little different than previous calls and refer to certain slides to make sure that key points we want to make about each slide or understood. But before we get into the slides, I'd like to make a few remarks to explain how we adapted to this volatile commodity price cycle that came about in the second half of 2018. We've been maintaining a lower net completion count per month during the fourth and first quarters compared to prior period. We've also been utilizing our existing drilling rig fleet to build our DUC inventory, such that the company can quickly take advantage of commodity price changes in the future.
With all that said, there are few things we will not change. We will maintain our focus on capital efficiency, building off of the successes and completion design improvements seen in 2018, as well as expanding our horizontal program in Northeastern Utah. To that end, Slide 5 and 6 highlight how we delivered on driving down LOE and Cash G&A, while maintaining production flat from 2017. We refreshed the Northeastern Utah as horizontal cumulative oil production chart again this quarter. On Slide 7, you can see these two horizontals are still performing quite strongly. We expect to complete two more Northeastern Utah horizontal wells in the first quarter of 2019.
As seen on Slides 8 and 9 of the posted materials, the 2018 design wells continued to drive revenue per investment outperformance of the historical offset in both the Eagle Ford and in the Permian. In addition, we will continue to drive down costs, make continued progress and liability management, and maintain liquidity as we operate throughout 2019. Given the dynamic changes to the commodities market over the past several months, we find it necessary to operate and respond in a dynamic fashion. And as such, we will be issuing guidance on a quarter by quarter basis.
With that overview, I'll hand it off to Kyle for some more details on our financial results. Kyle?
Kyle A. McCuen -- Senior Vice President and Chief Financial Officer
Thank you, Russell, and good morning, everyone. Today I will highlight a few items for the quarter. During the quarter we recorded a $1.1 billion non-cash impairment to our Permian asset. The writedown is a result of significant reduction in assumed Permian activity in our five-year plan, as a result of the downturn in oil prices since Q3 2018, and a shift toward basing pricing advantage and more lucrative Eagle Ford in Northeastern Utah projects. In conjunction with this change, we eliminated all Permian-related PUD reserves in our 2018 reserve report.
We reported a year-end oil and gas reserve estimate of 325 million barrels of oil equivalent. We retained Ryder Scott for the first time this year to prepare a reserve estimate instead of audit -- instead of auditing an internally developed estimate. Due to the downturn in oil prices since Q3 2018 and the projected impact on our future liquidity, we shortened the PUD development time frame and our year end reserve estimate from the SEC's five year maximum time frame to a three year time frame. We don't expect the reduction in PUD reserves to have a negative impact on our RBL commitments.
As Russell mentioned, we aim to make continued progress on liability management and continued to actively evaluate options to improve our balance sheet. We bought back $133 million of face value debt at a discount -- at discounted prices since early 2018. The balance on the May 2020 maturity is now $182 million, and we continue to look at all liability management options to address this and other near-term debt maturities.
On Slide 10 you can see our hedge book as of March 12. We have added crude oil hedges since the last earnings call, principally in 2020, where we now have price protection. We now have approximately 12 million barrels hedged with a floor price of approximately $56 with upside to $65.
Slide 11 provides our first quarter 2019 guidance. During the quarter, we moved from four rigs in the Eagle Ford to three rigs, and from two rigs in Northeastern Utah to one that is focused on horizontal drilling only. We have lowered our completions and thus you see a slight uptick in our per unit metrics due to the lower volumes. As always, we will continue to manage the business in a cost efficient manner.
In regards to the NYSE non-compliance notice, we continue to evaluate all options. As disclosed in an 8-K in January, if we are unable to get back into compliance by the end of the six-month cure period that ends in July, the NYSE will commence the listing procedures.
With that, I'll turn it back over to Russell to wrap up. Russell?
Russell E. Parker -- President and Chief Executive Officer
Thank you, Kyle. I want to wrap up the call with a few closing comments. As you can see on Slide 4, the material 2018 was a year of solid execution from the new management team. We're very pleased with what we accomplished during the year. We improved capital efficiency in all basins, drilled and completed our first ever horizontal wells in Northeastern Utah, drilled our most productive Eagle Ford wells in the program history, expanded our Eagle Ford footprint and significantly improved our cost structure. In addition, 2018 was the only year in Company history in which EBITDA was significantly larger than capital spent over the same period without the benefit of hedge settlements. We have a great set of assets and a committed group of exceptional employees that helped us deliver on our operating objectives. We're uncertain in how long the current price conditions will last, however, we plan to stay disciplined, to continue to improve our capital efficiency, continue to improve our cost structure, continue to improve our portfolio mix, and continue to strengthen our financial profile in order to position the Company for success.
Thank you for your time and attention this morning. We'll now close the earnings call. Thank you.
Operator
Ladies and gentlemen, the conference has concluded. Thank you for attending today's presentation. You may now disconnect your line.
Duration: 08 minutes
Call participants:
Jordan Strauss -- Investor and Media Relations
Russell E. Parker -- President and Chief Executive Officer
Kyle A. McCuen -- Senior Vice President and Chief Financial Officer
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