From PDC Energy:
PDC Energy Announces Increases in 2013 Capital Budget and Estimated Net Production, and Signing of Midstream Agreement in the Utica Shale
DENVER, March 18, 2013 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today announced an increase in the Company's capital budget and estimated net production for 2013. The Company also announced the signing of an agreement for the provision of midstream services in the Utica Shale.
PDC's capital budget increased from $365 million to $443 million, 85% of which is allocated to accelerate development of liquid-rich projects in the Wattenberg Field and Utica Shale. The Wattenberg Field budget increased $26 million to $280 million to accommodate the projected start-up of a third rig in May, 2013. For the year, the Company expects to drill a total of 69 horizontal wells in the liquid-rich Niobrara and Codell formations.
The Company also increased its budget for the Utica Shale from $53 million to $96 million to maintain a one-rig drilling program throughout 2013 and drill a total of 11 horizontal wells. The Utica budget includes approximately $7 million for leasehold acquisitions. The full-year drilling program was facilitated by the execution of long-term agreements with a subsidiary of MarkWest Energy Partners, LP (NYSE:MWE) ("MarkWest") to provide midstream services, including gas gathering, processing, fractionation, and marketing to support PDC's Utica operations in Guernsey County in southeast Ohio. PDC expects MarkWest to begin gathering its Guernsey County gas by the end of the second quarter of 2013 and marketing its residue gas and natural gas liquids at the tailgate of the MarkWest processing facilities.
The remaining $9 million increase is related to the Company's joint venture ("PDCM") in the Marcellus Shale to reflect the startup of its 2013 horizontal drilling program in January rather than March as originally budgeted. PDCM's capital budget is expected to be funded largely by the joint venture's cash flow and borrowings under the joint venture's revolving credit facility.
Guidance for 2013 net production, pro forma for the sale of non-core Colorado assets, has been adjusted to a range of 7.0 to 7.5 million barrels of oil equivalent (MMboe) as a result of the increase in the capital budget and the drilling of 13 additional horizontal wells. Net production volumes for 2013 are expected to be comprised of approximately 54% liquids and 46% natural gas. The benefit of additional production from the accelerated drilling program is expected to be realized beginning in the fourth quarter of 2013 and into 2014.
James Trimble, Chief Executive Officer and President, commented, "We are very excited to accelerate our liquid-rich development with the addition of a third horizontal rig in the prolific core Wattenberg Field and extending our one-rig drilling program in the Utica Shale for the full year 2013. These two plays are expected to drive the Company's organic growth for many years as we continue to increase the liquids percentage of our production and reserves and establish a more balanced portfolio of oil and natural gas."
Upcoming Investor Presentations and Analyst Day
PDC management is scheduled to present at the Howard Weil Energy Conference in New Orleans, Louisiana, on Wednesday, March 20, 2013. PDC management also plans to host an Analyst Day in New York on Thursday, April 4, 2013. Please see the Company's website at www.pdce.com for full details and webcast information. The related slide presentations are expected to be available on the Company's website immediately prior to the events.
About PDC Energy, Inc.
PDC Energy is a domestic independent energy company engaged in the exploration, development and production of crude oil, NGLs and natural gas. Its operations are focused primarily in the liquid-rich Wattenberg Field of Colorado, including the horizontal Niobrara and Codell plays, the Utica Shale in Ohio and the Marcellus Shale in West Virginia. PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.