as the u.s. oil and gas industry continues to confront volatile commodity prices , we experience adverse effects on our business , financial condition , results of operations , operating cash flows , liquidity and ability to finance planned capital expenditures . lower prices may also reduce the amount of oil , natural gas and ngls that we can produce economically and therefore , potentially lower our oil , natural gas and ngl reserves . decreasing reserves may also reduce the borrowing base under our credit agreement , which is determined at the discretion of the lenders and is based on the collateral value of our 46 index to financial statements proved reserves . our ability to access capital markets may be restricted , which could have an impact on our flexibility to react to changing economic and business conditions . further , oversupply and high inventory storage levels could put downward pressure on commodity prices and have an adverse impact on our business partners , customers and lenders , potentially causing them to fail to meet their obligations to us . factors affecting the comparability of our results of operations our historical results of operations for the periods presented may not be comparable , either to each other or to our future results of operations , primarily for the reasons described below . incentive unit awards in conjunction with the closing of the ipo , we recognized equity-based compensation expense for : ( 1 ) a charge of $ 379.0 million related to management incentive units ( “ mius ” ) in jpe llc that vested at the time of the ipo ; and ( 2 ) a charge for the year ended december 31 , 2017 of $ 60.4 million related to shares of common stock transferred to jpe management holdings llc ( “ management holdco ” ) . please refer to note 6 , equity-based compensation , for additional information on equity-based compensation . public company expenses subsequent to our ipo , we incur direct , incremental general and administrative ( “ g & a ” ) expenses as a result of being a publicly traded company , including , but not limited to , costs associated with hiring new personnel , implementation of compensation programs that are competitive with our public company peer group , annual and quarterly reports to stockholders , corporate tax return preparation , increased independent auditor fees , investor relations activities , registrar and transfer agent fees , incremental director and officer liability insurance costs and independent director compensation . these direct , incremental g & a expenses are not included in our historical results of operations . income taxes as a result of our corporate reorganization , we became subject to federal and state income tax . the change in tax status required the recognition of deferred tax assets and liabilities for the temporary differences at the time of the change in status . the resulting net deferred tax liability of approximately $ 80.7 million was recognized as tax expense from continuing operations . for periods following completion of the corporate reorganization , we began recording income taxes associated with our status as a corporation . from the date of the corporate reorganization through december 31 , 2017 , we recognized $ 22.8 million of income tax benefit which includes the favorable impact of the tax act ( as defined below ) . please refer to note 8 , income taxes , for more information on income taxes . on december 22 , 2017 , the president signed into law public law no . 115-97 , a comprehensive tax reform bill commonly referred to as the tax cuts and jobs act ( the “ tax act ” ) , that significantly changes the federal income taxation of business entities . the tax act , among other things , reduces the corporate income tax rate from 35 % to 21 % , partially limits the deductibility of business interest expense and net operating losses , allows the immediate deduction of certain new investments instead of deductions for depreciation expense over time , and eliminates the corporate alternative minimum tax . due principally to the elimination of the corporate alternative minimum tax and our ability to immediately deduct intangible drilling and completion expenditures , we do not anticipate paying cash income taxes in the near term . increased drilling activity since commencing our drilling program in late 2013 , we operated an average of one horizontal drilling rig through june 2016. we began operating our second and third rigs in july of 2016. at december 31 , 2017 , we were operating six horizontal rigs . during 2017 we completed , or participated in completing , 51 gross ( 46.1 net ) operated wells . our average daily production has grown from 5,613 boe/d in 2016 to 16,974 boe/d in 2017 . during 2017 we spent $ 597.5 million for drilling and completing wells and on water infrastructure costs , which included $ 1.6 million to purchase surface acreage . this compares to $ 158.5 million that we spent in 2016 for drilling , completion and infrastructure . our board of directors approved a capital budget for 2018 which is projected to range from $ 560.0 million to $ 615.0 million , excluding acquisitions . we expect to allocate between $ 540.0 million and $ 590.0 million of our 2018 capital budget for the drilling and completion of operated and non-operated wells , and $ 20.0 million to $ 25.0 million for water infrastructure costs , excluding any potential additions to surface acreage . at the midpoint , our 2018 capital budget is nearly flat compared to 47 index to financial statements our 2017 drilling and completion spending of $ 597.5 million . the ultimate amount of capital that we expend may fluctuate materially based on market conditions , availability and or attractiveness of acquisitions and our drilling results . story_separator_special_tag the decrease in our dd & a rate was largely due to an increase in reserve volumes due to continued successful drilling activities , whereas the rate of increase in capitalized costs related to those drilling activities was lower than the rate of reserve increase . 52 index to financial statements impairment of unproved oil and natural gas properties . we incurred $ 0.4 million of impairment costs in 2017 and 2016 , which were primarily due to the expiration of certain leases on unproved properties . no impairments were recorded on proved properties during 2017 and 2016 . other operating expenses . other operating expenses decreased $ 0.4 million to $ 0.2 million in 2017 from $ 0.6 million in 2016 . the $ 0.2 million of other operating expenses in 2017 was primarily due to sales of fresh water and water disposal to third parties . during 2016 , other operating expenses of $ 0.6 million related to rig termination fees of $ 0.2 million and $ 0.4 million of costs related to selling fresh water and water disposal . general and administrative and equity-based compensation . g & a ( excluding equity-based compensation ) increased 98 % to $ 23.1 million for the year ended december 31 , 2017 , from $ 11.7 million for the same period of 2016 . the increase is primarily due to a $ 9.2 million increase in costs related to salaries , employee benefits , contract personnel and other general business expenses required to support the growth of our capital program and production levels . the number of our full-time employees increased from 23 at january 1 , 2016 to 59 at december 31 , 2017 . additionally , we incurred $ 1.0 million in higher audit , tax and legal fees , which increases are largely a result of becoming a publicly traded company . equity-based compensation expense for the year ended december 31 , 2017 was $ 443.0 million , as summarized in the table below : ( in thousands ) incentive unit awards $ 439,411 restricted stock unit awards 2,068 performance stock unit awards 1,497 total equity-based compensation expense $ 442,976 the equity-based compensation expense for the incentive unit awards relates to the common stock transferred to management holdco , which is subject to the terms of the amended and restated jpe management holdings llc limited liability company agreement ( the “ management holdco llc agreement ” ) , and includes approximately $ 379.0 million of equity-based compensation expense relative to the common stock issued to miu holders that vested upon the ipo . also included in the $ 439.4 million is $ 22.2 million of equity-based compensation recognized during the first quarter of 2017 related to incentive unit awards , which were modified in conjunction with a march 2017 separation agreement of a former executive officer . the restricted stock unit ( “ rsus ” ) and performance stock unit ( “ psus ” ) awards were granted throughout 2017. we expect to recognize additional noncash compensation expense of approximately $ 10.2 million over approximately 2.1 years for the rsus and psus . in february 2018 , certain employees notified the company of their desire to terminate their employment . under the terms of the management holdco llc agreement , upon voluntary termination of employment by an incentive unit award holder , the board of directors has the discretion to allow outstanding unvested incentive unit awards to immediately vest , to continue to vest post-termination , and or to be automatically forfeited , or any combination thereof . any forfeited incentive units are reallocated to the remaining incentive unit holders employed by the company . in february 2018 , the board of directors modified these employees ' unvested incentive units to either immediately accelerate vesting , in the case of retiring employees , or continue to vest post-termination under the original vesting period . the company determined that these are accounted for as modifications under asc 718 in the first quarter of 2018. as a result of these modifications to the service requirements , the company determined that , for accounting purposes under asc 718 , the incentive unit awards allocated at ipo no longer met the substantive service condition , and that any previously unrecognized equity-based compensation expense should be recognized immediately . the acceleration of all previously unrecognized equity-based compensation expense for incentive unit awards allocated at the time of the ipo will result in the recognition of approximately $ 71.2 million of noncash equity-based compensation expense in the first quarter of 2018. this accounting does not alter the legal service obligations under the management holdco llc agreement for remaining employees whose awards were not modified . equity-based compensation expense recognition related to incentive unit awards that were unallocated at the time of the ipo is unaffected . 53 index to financial statements other income and expense the following table summarizes our other income and expenses for the periods indicated : replace_table_token_15_th gain ( loss ) on commodity derivatives . net gains and losses on our derivative instruments are a function of fluctuations in the underlying commodity prices and the monthly settlement , if any , of the instruments . as a result , settlements on the contracts are included as a component of other income and expense as either a net gain or loss on noncash derivative instruments . to the extent the future commodity price outlook declines between measurement periods , we will have noncash mark-to-market gains , while to the extent future commodity price outlook increases between measurement periods , we will have noncash mark-to-market losses . the following table sets forth the net gain ( loss ) from settlements and changes in the fair value of our derivative contracts , as well as the net cash receipts ( payments ) on settlements for the years ended december 31 , 2017 and 2016 : ( in thousands ) 2017 2016 gain (

net cash provided by financing activities during 2017 was primarily due to $ 398.4 million of net proceeds from the sale of common stock in the ipo and $ 165.0 million of borrowings on our credit facility , which was partially offset by a repayment on our credit facility of $ 142.0 million after the ipo . net cash provided by financing activities in 2016 included $ 51.5 million of cash provided by contributions from jpe llc members and $ 112.0 million of borrowings under our credit facility . net cash provided by financing activities in 2015 included $ 51.0 million of cash provided by member unit issuances and $ 20.0 million of borrowings under our credit facility . credit facility on june 19 , 2015 , our predecessor entered into a credit agreement that provided for a senior secured revolving credit facility with an aggregate commitment of $ 500.0 million ( subject to the then-effective borrowing base ) . in january 2017 , the borrowing base increased to $ 180.0 million . in connection with the ipo , we , as parent guarantor , and our predecessor , as borrower , entered into an amended and restated credit facility . the amended and restated credit facility matures on february 1 , 2022. after giving effect to such amendment and restatement , the aggregate principal commitment increased to $ 1.0 billion and the borrowing base under the amended and restated credit facility remained at $ 180.0 million . also in connection with the ipo , we fully repaid the outstanding borrowings under the credit facility of $ 142.0 million . in april 2017 , the borrowing base was increased to $ 250.0 million , and in october 2017 we entered into amendment no . 1 to the amended and restated credit facility which increased the borrowing base to $ 425.0 million . in march 2018 , we entered into amendment no .


 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.
     ```net cash provided by financing activities during 2017 was primarily due to $ 398.4 million of net proceeds from the sale of common stock in the ipo and $ 165.0 million of borrowings on our credit facility , which was partially offset by a repayment on our credit facility of $ 142.0 million after the ipo . net cash provided by financing activities in 2016 included $ 51.5 million of cash provided by contributions from jpe llc members and $ 112.0 million of borrowings under our credit facility . net cash provided by financing activities in 2015 included $ 51.0 million of cash provided by member unit issuances and $ 20.0 million of borrowings under our credit facility . credit facility on june 19 , 2015 , our predecessor entered into a credit agreement that provided for a senior secured revolving credit facility with an aggregate commitment of $ 500.0 million ( subject to the then-effective borrowing base ) . in january 2017 , the borrowing base increased to $ 180.0 million . in connection with the ipo , we , as parent guarantor , and our predecessor , as borrower , entered into an amended and restated credit facility . the amended and restated credit facility matures on february 1 , 2022. after giving effect to such amendment and restatement , the aggregate principal commitment increased to $ 1.0 billion and the borrowing base under the amended and restated credit facility remained at $ 180.0 million . also in connection with the ipo , we fully repaid the outstanding borrowings under the credit facility of $ 142.0 million . in april 2017 , the borrowing base was increased to $ 250.0 million , and in october 2017 we entered into amendment no . 1 to the amended and restated credit facility which increased the borrowing base to $ 425.0 million . in march 2018 , we entered into amendment no .
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 Suspicious Activity Report : as the u.s. oil and gas industry continues to confront volatile commodity prices , we experience adverse effects on our business , financial condition , results of operations , operating cash flows , liquidity and ability to finance planned capital expenditures . lower prices may also reduce the amount of oil , natural gas and ngls that we can produce economically and therefore , potentially lower our oil , natural gas and ngl reserves . decreasing reserves may also reduce the borrowing base under our credit agreement , which is determined at the discretion of the lenders and is based on the collateral value of our 46 index to financial statements proved reserves . our ability to access capital markets may be restricted , which could have an impact on our flexibility to react to changing economic and business conditions . further , oversupply and high inventory storage levels could put downward pressure on commodity prices and have an adverse impact on our business partners , customers and lenders , potentially causing them to fail to meet their obligations to us . factors affecting the comparability of our results of operations our historical results of operations for the periods presented may not be comparable , either to each other or to our future results of operations , primarily for the reasons described below . incentive unit awards in conjunction with the closing of the ipo , we recognized equity-based compensation expense for : ( 1 ) a charge of $ 379.0 million related to management incentive units ( “ mius ” ) in jpe llc that vested at the time of the ipo ; and ( 2 ) a charge for the year ended december 31 , 2017 of $ 60.4 million related to shares of common stock transferred to jpe management holdings llc ( “ management holdco ” ) . please refer to note 6 , equity-based compensation , for additional information on equity-based compensation . public company expenses subsequent to our ipo , we incur direct , incremental general and administrative ( “ g & a ” ) expenses as a result of being a publicly traded company , including , but not limited to , costs associated with hiring new personnel , implementation of compensation programs that are competitive with our public company peer group , annual and quarterly reports to stockholders , corporate tax return preparation , increased independent auditor fees , investor relations activities , registrar and transfer agent fees , incremental director and officer liability insurance costs and independent director compensation . these direct , incremental g & a expenses are not included in our historical results of operations . income taxes as a result of our corporate reorganization , we became subject to federal and state income tax . the change in tax status required the recognition of deferred tax assets and liabilities for the temporary differences at the time of the change in status . the resulting net deferred tax liability of approximately $ 80.7 million was recognized as tax expense from continuing operations . for periods following completion of the corporate reorganization , we began recording income taxes associated with our status as a corporation . from the date of the corporate reorganization through december 31 , 2017 , we recognized $ 22.8 million of income tax benefit which includes the favorable impact of the tax act ( as defined below ) . please refer to note 8 , income taxes , for more information on income taxes . on december 22 , 2017 , the president signed into law public law no . 115-97 , a comprehensive tax reform bill commonly referred to as the tax cuts and jobs act ( the “ tax act ” ) , that significantly changes the federal income taxation of business entities . the tax act , among other things , reduces the corporate income tax rate from 35 % to 21 % , partially limits the deductibility of business interest expense and net operating losses , allows the immediate deduction of certain new investments instead of deductions for depreciation expense over time , and eliminates the corporate alternative minimum tax . due principally to the elimination of the corporate alternative minimum tax and our ability to immediately deduct intangible drilling and completion expenditures , we do not anticipate paying cash income taxes in the near term . increased drilling activity since commencing our drilling program in late 2013 , we operated an average of one horizontal drilling rig through june 2016. we began operating our second and third rigs in july of 2016. at december 31 , 2017 , we were operating six horizontal rigs . during 2017 we completed , or participated in completing , 51 gross ( 46.1 net ) operated wells . our average daily production has grown from 5,613 boe/d in 2016 to 16,974 boe/d in 2017 . during 2017 we spent $ 597.5 million for drilling and completing wells and on water infrastructure costs , which included $ 1.6 million to purchase surface acreage . this compares to $ 158.5 million that we spent in 2016 for drilling , completion and infrastructure . our board of directors approved a capital budget for 2018 which is projected to range from $ 560.0 million to $ 615.0 million , excluding acquisitions . we expect to allocate between $ 540.0 million and $ 590.0 million of our 2018 capital budget for the drilling and completion of operated and non-operated wells , and $ 20.0 million to $ 25.0 million for water infrastructure costs , excluding any potential additions to surface acreage . at the midpoint , our 2018 capital budget is nearly flat compared to 47 index to financial statements our 2017 drilling and completion spending of $ 597.5 million . the ultimate amount of capital that we expend may fluctuate materially based on market conditions , availability and or attractiveness of acquisitions and our drilling results . story_separator_special_tag the decrease in our dd & a rate was largely due to an increase in reserve volumes due to continued successful drilling activities , whereas the rate of increase in capitalized costs related to those drilling activities was lower than the rate of reserve increase . 52 index to financial statements impairment of unproved oil and natural gas properties . we incurred $ 0.4 million of impairment costs in 2017 and 2016 , which were primarily due to the expiration of certain leases on unproved properties . no impairments were recorded on proved properties during 2017 and 2016 . other operating expenses . other operating expenses decreased $ 0.4 million to $ 0.2 million in 2017 from $ 0.6 million in 2016 . the $ 0.2 million of other operating expenses in 2017 was primarily due to sales of fresh water and water disposal to third parties . during 2016 , other operating expenses of $ 0.6 million related to rig termination fees of $ 0.2 million and $ 0.4 million of costs related to selling fresh water and water disposal . general and administrative and equity-based compensation . g & a ( excluding equity-based compensation ) increased 98 % to $ 23.1 million for the year ended december 31 , 2017 , from $ 11.7 million for the same period of 2016 . the increase is primarily due to a $ 9.2 million increase in costs related to salaries , employee benefits , contract personnel and other general business expenses required to support the growth of our capital program and production levels . the number of our full-time employees increased from 23 at january 1 , 2016 to 59 at december 31 , 2017 . additionally , we incurred $ 1.0 million in higher audit , tax and legal fees , which increases are largely a result of becoming a publicly traded company . equity-based compensation expense for the year ended december 31 , 2017 was $ 443.0 million , as summarized in the table below : ( in thousands ) incentive unit awards $ 439,411 restricted stock unit awards 2,068 performance stock unit awards 1,497 total equity-based compensation expense $ 442,976 the equity-based compensation expense for the incentive unit awards relates to the common stock transferred to management holdco , which is subject to the terms of the amended and restated jpe management holdings llc limited liability company agreement ( the “ management holdco llc agreement ” ) , and includes approximately $ 379.0 million of equity-based compensation expense relative to the common stock issued to miu holders that vested upon the ipo . also included in the $ 439.4 million is $ 22.2 million of equity-based compensation recognized during the first quarter of 2017 related to incentive unit awards , which were modified in conjunction with a march 2017 separation agreement of a former executive officer . the restricted stock unit ( “ rsus ” ) and performance stock unit ( “ psus ” ) awards were granted throughout 2017. we expect to recognize additional noncash compensation expense of approximately $ 10.2 million over approximately 2.1 years for the rsus and psus . in february 2018 , certain employees notified the company of their desire to terminate their employment . under the terms of the management holdco llc agreement , upon voluntary termination of employment by an incentive unit award holder , the board of directors has the discretion to allow outstanding unvested incentive unit awards to immediately vest , to continue to vest post-termination , and or to be automatically forfeited , or any combination thereof . any forfeited incentive units are reallocated to the remaining incentive unit holders employed by the company . in february 2018 , the board of directors modified these employees ' unvested incentive units to either immediately accelerate vesting , in the case of retiring employees , or continue to vest post-termination under the original vesting period . the company determined that these are accounted for as modifications under asc 718 in the first quarter of 2018. as a result of these modifications to the service requirements , the company determined that , for accounting purposes under asc 718 , the incentive unit awards allocated at ipo no longer met the substantive service condition , and that any previously unrecognized equity-based compensation expense should be recognized immediately . the acceleration of all previously unrecognized equity-based compensation expense for incentive unit awards allocated at the time of the ipo will result in the recognition of approximately $ 71.2 million of noncash equity-based compensation expense in the first quarter of 2018. this accounting does not alter the legal service obligations under the management holdco llc agreement for remaining employees whose awards were not modified . equity-based compensation expense recognition related to incentive unit awards that were unallocated at the time of the ipo is unaffected . 53 index to financial statements other income and expense the following table summarizes our other income and expenses for the periods indicated : replace_table_token_15_th gain ( loss ) on commodity derivatives . net gains and losses on our derivative instruments are a function of fluctuations in the underlying commodity prices and the monthly settlement , if any , of the instruments . as a result , settlements on the contracts are included as a component of other income and expense as either a net gain or loss on noncash derivative instruments . to the extent the future commodity price outlook declines between measurement periods , we will have noncash mark-to-market gains , while to the extent future commodity price outlook increases between measurement periods , we will have noncash mark-to-market losses . the following table sets forth the net gain ( loss ) from settlements and changes in the fair value of our derivative contracts , as well as the net cash receipts ( payments ) on settlements for the years ended december 31 , 2017 and 2016 : ( in thousands ) 2017 2016 gain (

