the decrease in total operating revenues and average daily production year over year was driven by our divestitures in 2017. in 2017 , we participated in the drilling of 124 gross ( 33.7 net ) wells , none of which were dry holes . our financial results depend upon many factors , but are largely driven by the volume of our oil and natural gas production and the price that we receive for that production . our production volumes will decline as reserves are produced unless we expend capital in successful development and exploration activities or acquire properties with existing production . the amount we realize for our 52 production depends predominantly upon commodity prices and our related commodity price hedging activities , which are affected by changes in market demand and supply , as impacted by overall economic activity , weather , pipeline capacity constraints , inventory storage levels , basis differentials and other factors . accordingly , finding and developing oil and natural gas reserves at economical costs is critical to our long-term success . in 2017 , we incurred capital expenditures for drilling and completions of approximately $ 309.6 million . we expect to spend approximately $ 280 million to $ 320 million on drilling and completion capital expenditures during 2018. in addition , we expect to spend approximately $ 30 million to $ 40 million on infrastructure , seismic and other in 2018. our 2018 drilling and completion budget currently contemplates running an average of three operated rigs in the delaware basin during the year , and is subject to change . after the pending acquisition of the west quito draw properties closes , discussed below under `` recent developments , `` our 2018 capital budget will be revised . we expect to fund our budgeted 2018 capital expenditures with cash on hand , cash flows from operations , proceeds from debt and equity issuances and borrowings under our senior credit agreement . we strive to maintain financial flexibility and may access capital markets as necessary to maintain adequate borrowing capacity under our senior credit agreement , facilitate drilling on our large undeveloped acreage position and permit us to selectively expand our acreage position and infrastructure projects . in the event our cash flows are materially less than anticipated and other sources of capital we historically have utilized are not available on acceptable terms , we may reduce our capital spending , however significant or prolonged reductions in capital spending will adversely impact our production and may negatively affect our future cash flows . oil and natural gas prices are inherently volatile and declined dramatically during the latter half of 2014. in response to this , in 2015 and 2016 we significantly curtailed our capital spending , reduced operating costs , concluded discounted debt exchanges , and incurred substantial asset impairments , primarily as a result of the full cost ceiling test calculation . despite these efforts , low commodity prices persisted and we decided to reorganize under chapter 11 on september 9 , 2016 , as discussed in greater detail below . we utilize the full cost method of accounting for our oil and natural gas exploration and development activities . under full cost accounting , we are required by sec regulations to perform a ceiling test each quarter . the ceiling test calculation dictates that we use the unweighted arithmetic average price of crude oil and natural gas as of the first day of each month for the 12-month period ending at the balance sheet date . using the crude oil price for february 2018 of $ 65.80 per bbl , and holding it constant for one month to create a trailing 12-month period of average prices that is more reflective of recent price trends , our ceiling test limitation would not have generated an impairment at december 31 , 2017 holding all other inputs and factors constant . sustained lower commodity prices would have a material impact upon our full cost ceiling test calculation . in addition to commodity prices , our production rates , levels of proved reserves , future development costs , transfers of unevaluated properties to our full cost pool , capital spending and other factors will determine our actual ceiling test calculation and impairment analyses in future periods . recent developments pending acquisition of west quito draw properties on february 6 , 2018 , one of our wholly owned subsidiaries entered into a purchase and sale agreement ( the shell psa ) with swepi lp ( shell ) , an affiliate of shell oil company , pursuant to which we agreed to purchase an aggregate 10,524 net acres and related assets in the southern delaware basin located in ward county , texas ( the west quito draw properties ) for a total purchase price of $ 200.0 million . the effective date of the proposed acquisition is february 1 , 2018 , and we expect the closing to occur early april 2018 . 53 the purchase price is subject to adjustments for ( i ) operating expenses , capital expenditures and revenues between the effective date and the closing date , ( ii ) title and environmental defects , and ( iii ) other purchase price adjustments customary in oil and gas purchase and sale agreements . pursuant to the terms of the shell psa , we paid a deposit into escrow totaling $ 20.0 million , which amount will be applied to the purchase price if the transaction closes . the completion of the acquisition of the west quito draw properties is subject to customary closing conditions . either party may terminate the shell psa if certain closing conditions have not been satisfied , or if the transaction has not closed on or before april 20 , 2018. if one or more of the closing conditions are not satisfied , or if the transaction is otherwise terminated , the acquisition may not be completed . story_separator_special_tag 57 divestiture of east texas eagle ford assets on january 24 , 2017 , certain of our subsidiaries entered into an agreement with a subsidiary of hawkwood energy , llc ( hawkwood ) for the sale of all of our oil and natural gas properties and related assets located in the eagle ford formation of east texas ( the el halcón assets ) for a total adjusted sales price of $ 491.1 million ( the el halcón divestiture ) . the effective date of the el halcón divestiture was january 1 , 2017 , and the transaction closed on march 9 , 2017. we used the net proceeds from the sale to repay amounts outstanding under our senior credit agreement and for general corporate purposes . the el halcón assets included approximately 80,500 net acres prospective for the eagle ford formation in east texas . as of december 31 , 2016 , estimated proved reserves from the el halcón assets were approximately 35.1 mmboe , or 24 % of our estimated year-end 2016 proved reserves . the el halcón assets generated net production of approximately 7,600 boe/d ( 80 % oil ) for the year ended december 31 , 2016. we use the full cost method of accounting for our investment in oil and natural gas properties . under this method of accounting , sales of oil and gas properties are accounted for as adjustments of capitalized costs with no gain or loss recognized , unless the adjustment significantly alters the relationship between capitalized costs and proved reserves . if the el halcón divestiture was accounted for as an adjustment of capitalized costs with no gain or loss recognized , the adjustment would have significantly altered the relationship between capitalized costs and proved reserves . accordingly , we recognized a gain on the sale in connection with this transaction of $ 235.7 million during the year ended december 31 , 2017. the carrying value of the properties sold was determined by allocating total capitalized costs within the full cost pool between properties sold and properties retained based on their relative fair values . the gain was recorded in `` gain ( loss ) on sale of oil and natural gas properties , `` on the consolidated statements of operations . private placement of automatically convertible preferred stock on january 24 , 2017 , we entered into a stock purchase agreement with certain accredited investors to sell , in a private placement exempt from the registration requirements of the securities act pursuant to section 4 ( a ) ( 2 ) , approximately 5,518 shares of 8 % automatically convertible preferred stock , par value $ 0.0001 per share ( the preferred stock ) , each share of which was convertible into 10,000 shares of common stock . also on january 24 , 2017 , we received an executed written consent in lieu of a stockholders ' meeting authorizing and approving the conversion of the preferred stock into common stock . on february 27 , 2017 , we issued the preferred stock at $ 72,500 per share . gross proceeds were approximately $ 400.1 million , or $ 7.25 per share of common stock . we incurred approximately $ 11.9 million in expenses associated with this offering , including placement agent fees . we used the net proceeds from the sale of the preferred stock to partially fund the pecos county acquisition , which is discussed further below . on march 16 , 2017 , we mailed a definitive information statement to stockholders of record notifying them that a majority of our stockholders approved the issuance of common stock , par value $ 0.0001 per share , and upon the automatic conversion of the preferred stock , we issued 55.2 million shares of common stock on april 6 , 2017. no cash dividends were paid on the preferred stock since conversion occurred prior to june 1 , 2017. we determined that the conversion feature in the preferred stock represented a beneficial conversion feature of $ 48.0 million . this portion of the proceeds received from the issuance of the preferred stock was allocated to `` additional paid-in capital , `` creating a discount on the preferred stock . the $ 48.0 million discount was fully amortized during the year ended december 31 , 2017 and is reflected in `` non-cash preferred dividend `` in the consolidated statements of operations . the preferred dividend was charged against additional paid-in capital since no retained earnings were available . 58 in accordance with the stock purchase agreement , we agreed to file a registration statement to register the resale of the shares of common stock issued upon conversion of the preferred stock and to pay penalties in the event such registration was not effective by june 27 , 2017. we filed such registration statement on march 3 , 2017 and it was declared effective by the sec on april 7 , 2017. acquisition of hackberry draw assets ( pecos and reeves counties , texas ) on january 18 , 2017 , we entered into an agreement with samson exploration , llc ( samson ) , pursuant to which we acquired a total of 20,901 net acres and related assets in the hackberry draw area of the delaware basin , located in pecos and reeves counties , texas ( collectively , the pecos county assets ) , for a total purchase price of $ 699.2 million ( the pecos county acquisition ) . the effective date of the pecos county acquisition was november 1 , 2016 , and we closed the transaction on february 28 , 2017. based on information provided by samson , we estimate that net production from the pecos county assets at the acquisition date was approximately 2,200 boe/d ( 72 % oil , 15 % ngls , 13 % natural gas ) . as of the acquisition date , we estimate that the pecos county assets included a 75 % average

cash flow historically , our primary sources of cash were from operating and financing activities . in 2017 , cash generated by operating activities , as well as proceeds from the sale of the williston assets , the non-operated williston assets and the el halcón assets , were used to fund our acquisition initiatives , primarily in the hackberry draw and monument draw areas of the delaware basin and our drilling and completion program . see `` results of operations '' for a review of the impact of prices and volumes on sales . net increase ( decrease ) in cash is summarized as follows ( in thousands ) : replace_table_token_13_th operating activities . net cash provided by operating activities for the year ended december 31 , 2017 was $ 114.6 million . net cash provided by operating activities for the period of september 10 , 2016 through december 31 , 2016 and the period of january 1 , 2016 through september 9 , 2016 were $ 103.1 million and $ 175.3 million , respectively . net cash provided by operating activities was $ 467.0 million for the years ended december 31 , 2015. key drivers of net operating cash flows are commodity prices , production volumes , operating costs , and in 2016 and 2015 , realized settlements on our derivative contracts . the $ 114.6 million of operating cash flows for the year ended december 31 , 2017 were lower than the prior year primarily due to a decrease in realized settlements . realized settlements on derivative contracts decreased $ 312.7 million over the prior year period . our oil and natural gas revenues also decreased approximately $ 42.2 million over the prior year period due to a decrease in our average daily production . average realized prices ( excluding the effects of hedging arrangements ) were $ 37.58 per boe , $ 35.87 per boe and $ 28.53 per boe for the year ended december 31 , 2017 , for the period september 10 , 2016 through december 31 , 2016 and the period of january 1 , 2016 through september 9 , 2016 , respectively .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```cash flow historically , our primary sources of cash were from operating and financing activities . in 2017 , cash generated by operating activities , as well as proceeds from the sale of the williston assets , the non-operated williston assets and the el halcón assets , were used to fund our acquisition initiatives , primarily in the hackberry draw and monument draw areas of the delaware basin and our drilling and completion program . see `` results of operations '' for a review of the impact of prices and volumes on sales . net increase ( decrease ) in cash is summarized as follows ( in thousands ) : replace_table_token_13_th operating activities . net cash provided by operating activities for the year ended december 31 , 2017 was $ 114.6 million . net cash provided by operating activities for the period of september 10 , 2016 through december 31 , 2016 and the period of january 1 , 2016 through september 9 , 2016 were $ 103.1 million and $ 175.3 million , respectively . net cash provided by operating activities was $ 467.0 million for the years ended december 31 , 2015. key drivers of net operating cash flows are commodity prices , production volumes , operating costs , and in 2016 and 2015 , realized settlements on our derivative contracts . the $ 114.6 million of operating cash flows for the year ended december 31 , 2017 were lower than the prior year primarily due to a decrease in realized settlements . realized settlements on derivative contracts decreased $ 312.7 million over the prior year period . our oil and natural gas revenues also decreased approximately $ 42.2 million over the prior year period due to a decrease in our average daily production . average realized prices ( excluding the effects of hedging arrangements ) were $ 37.58 per boe , $ 35.87 per boe and $ 28.53 per boe for the year ended december 31 , 2017 , for the period september 10 , 2016 through december 31 , 2016 and the period of january 1 , 2016 through september 9 , 2016 , respectively .
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 Suspicious Activity Report : the decrease in total operating revenues and average daily production year over year was driven by our divestitures in 2017. in 2017 , we participated in the drilling of 124 gross ( 33.7 net ) wells , none of which were dry holes . our financial results depend upon many factors , but are largely driven by the volume of our oil and natural gas production and the price that we receive for that production . our production volumes will decline as reserves are produced unless we expend capital in successful development and exploration activities or acquire properties with existing production . the amount we realize for our 52 production depends predominantly upon commodity prices and our related commodity price hedging activities , which are affected by changes in market demand and supply , as impacted by overall economic activity , weather , pipeline capacity constraints , inventory storage levels , basis differentials and other factors . accordingly , finding and developing oil and natural gas reserves at economical costs is critical to our long-term success . in 2017 , we incurred capital expenditures for drilling and completions of approximately $ 309.6 million . we expect to spend approximately $ 280 million to $ 320 million on drilling and completion capital expenditures during 2018. in addition , we expect to spend approximately $ 30 million to $ 40 million on infrastructure , seismic and other in 2018. our 2018 drilling and completion budget currently contemplates running an average of three operated rigs in the delaware basin during the year , and is subject to change . after the pending acquisition of the west quito draw properties closes , discussed below under `` recent developments , `` our 2018 capital budget will be revised . we expect to fund our budgeted 2018 capital expenditures with cash on hand , cash flows from operations , proceeds from debt and equity issuances and borrowings under our senior credit agreement . we strive to maintain financial flexibility and may access capital markets as necessary to maintain adequate borrowing capacity under our senior credit agreement , facilitate drilling on our large undeveloped acreage position and permit us to selectively expand our acreage position and infrastructure projects . in the event our cash flows are materially less than anticipated and other sources of capital we historically have utilized are not available on acceptable terms , we may reduce our capital spending , however significant or prolonged reductions in capital spending will adversely impact our production and may negatively affect our future cash flows . oil and natural gas prices are inherently volatile and declined dramatically during the latter half of 2014. in response to this , in 2015 and 2016 we significantly curtailed our capital spending , reduced operating costs , concluded discounted debt exchanges , and incurred substantial asset impairments , primarily as a result of the full cost ceiling test calculation . despite these efforts , low commodity prices persisted and we decided to reorganize under chapter 11 on september 9 , 2016 , as discussed in greater detail below . we utilize the full cost method of accounting for our oil and natural gas exploration and development activities . under full cost accounting , we are required by sec regulations to perform a ceiling test each quarter . the ceiling test calculation dictates that we use the unweighted arithmetic average price of crude oil and natural gas as of the first day of each month for the 12-month period ending at the balance sheet date . using the crude oil price for february 2018 of $ 65.80 per bbl , and holding it constant for one month to create a trailing 12-month period of average prices that is more reflective of recent price trends , our ceiling test limitation would not have generated an impairment at december 31 , 2017 holding all other inputs and factors constant . sustained lower commodity prices would have a material impact upon our full cost ceiling test calculation . in addition to commodity prices , our production rates , levels of proved reserves , future development costs , transfers of unevaluated properties to our full cost pool , capital spending and other factors will determine our actual ceiling test calculation and impairment analyses in future periods . recent developments pending acquisition of west quito draw properties on february 6 , 2018 , one of our wholly owned subsidiaries entered into a purchase and sale agreement ( the shell psa ) with swepi lp ( shell ) , an affiliate of shell oil company , pursuant to which we agreed to purchase an aggregate 10,524 net acres and related assets in the southern delaware basin located in ward county , texas ( the west quito draw properties ) for a total purchase price of $ 200.0 million . the effective date of the proposed acquisition is february 1 , 2018 , and we expect the closing to occur early april 2018 . 53 the purchase price is subject to adjustments for ( i ) operating expenses , capital expenditures and revenues between the effective date and the closing date , ( ii ) title and environmental defects , and ( iii ) other purchase price adjustments customary in oil and gas purchase and sale agreements . pursuant to the terms of the shell psa , we paid a deposit into escrow totaling $ 20.0 million , which amount will be applied to the purchase price if the transaction closes . the completion of the acquisition of the west quito draw properties is subject to customary closing conditions . either party may terminate the shell psa if certain closing conditions have not been satisfied , or if the transaction has not closed on or before april 20 , 2018. if one or more of the closing conditions are not satisfied , or if the transaction is otherwise terminated , the acquisition may not be completed . story_separator_special_tag 57 divestiture of east texas eagle ford assets on january 24 , 2017 , certain of our subsidiaries entered into an agreement with a subsidiary of hawkwood energy , llc ( hawkwood ) for the sale of all of our oil and natural gas properties and related assets located in the eagle ford formation of east texas ( the el halcón assets ) for a total adjusted sales price of $ 491.1 million ( the el halcón divestiture ) . the effective date of the el halcón divestiture was january 1 , 2017 , and the transaction closed on march 9 , 2017. we used the net proceeds from the sale to repay amounts outstanding under our senior credit agreement and for general corporate purposes . the el halcón assets included approximately 80,500 net acres prospective for the eagle ford formation in east texas . as of december 31 , 2016 , estimated proved reserves from the el halcón assets were approximately 35.1 mmboe , or 24 % of our estimated year-end 2016 proved reserves . the el halcón assets generated net production of approximately 7,600 boe/d ( 80 % oil ) for the year ended december 31 , 2016. we use the full cost method of accounting for our investment in oil and natural gas properties . under this method of accounting , sales of oil and gas properties are accounted for as adjustments of capitalized costs with no gain or loss recognized , unless the adjustment significantly alters the relationship between capitalized costs and proved reserves . if the el halcón divestiture was accounted for as an adjustment of capitalized costs with no gain or loss recognized , the adjustment would have significantly altered the relationship between capitalized costs and proved reserves . accordingly , we recognized a gain on the sale in connection with this transaction of $ 235.7 million during the year ended december 31 , 2017. the carrying value of the properties sold was determined by allocating total capitalized costs within the full cost pool between properties sold and properties retained based on their relative fair values . the gain was recorded in `` gain ( loss ) on sale of oil and natural gas properties , `` on the consolidated statements of operations . private placement of automatically convertible preferred stock on january 24 , 2017 , we entered into a stock purchase agreement with certain accredited investors to sell , in a private placement exempt from the registration requirements of the securities act pursuant to section 4 ( a ) ( 2 ) , approximately 5,518 shares of 8 % automatically convertible preferred stock , par value $ 0.0001 per share ( the preferred stock ) , each share of which was convertible into 10,000 shares of common stock . also on january 24 , 2017 , we received an executed written consent in lieu of a stockholders ' meeting authorizing and approving the conversion of the preferred stock into common stock . on february 27 , 2017 , we issued the preferred stock at $ 72,500 per share . gross proceeds were approximately $ 400.1 million , or $ 7.25 per share of common stock . we incurred approximately $ 11.9 million in expenses associated with this offering , including placement agent fees . we used the net proceeds from the sale of the preferred stock to partially fund the pecos county acquisition , which is discussed further below . on march 16 , 2017 , we mailed a definitive information statement to stockholders of record notifying them that a majority of our stockholders approved the issuance of common stock , par value $ 0.0001 per share , and upon the automatic conversion of the preferred stock , we issued 55.2 million shares of common stock on april 6 , 2017. no cash dividends were paid on the preferred stock since conversion occurred prior to june 1 , 2017. we determined that the conversion feature in the preferred stock represented a beneficial conversion feature of $ 48.0 million . this portion of the proceeds received from the issuance of the preferred stock was allocated to `` additional paid-in capital , `` creating a discount on the preferred stock . the $ 48.0 million discount was fully amortized during the year ended december 31 , 2017 and is reflected in `` non-cash preferred dividend `` in the consolidated statements of operations . the preferred dividend was charged against additional paid-in capital since no retained earnings were available . 58 in accordance with the stock purchase agreement , we agreed to file a registration statement to register the resale of the shares of common stock issued upon conversion of the preferred stock and to pay penalties in the event such registration was not effective by june 27 , 2017. we filed such registration statement on march 3 , 2017 and it was declared effective by the sec on april 7 , 2017. acquisition of hackberry draw assets ( pecos and reeves counties , texas ) on january 18 , 2017 , we entered into an agreement with samson exploration , llc ( samson ) , pursuant to which we acquired a total of 20,901 net acres and related assets in the hackberry draw area of the delaware basin , located in pecos and reeves counties , texas ( collectively , the pecos county assets ) , for a total purchase price of $ 699.2 million ( the pecos county acquisition ) . the effective date of the pecos county acquisition was november 1 , 2016 , and we closed the transaction on february 28 , 2017. based on information provided by samson , we estimate that net production from the pecos county assets at the acquisition date was approximately 2,200 boe/d ( 72 % oil , 15 % ngls , 13 % natural gas ) . as of the acquisition date , we estimate that the pecos county assets included a 75 % average

