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PDC says it is pleased with liquid-rich Utica shale wells

By Bob Downing Published: January 29, 2014

From PDC Energy:

 

 

DENVER, January 28, 2014 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today reported 2013 year-end reserves and production.

2013 Proved Reserves

Total proved reserves as of December 31, 2013 were 266 million barrels of oil equivalent ("MMBoe"), compared to 193 MMBoe reported as of December 31, 2012. Taking into account the Company's sale of approximately 16 MMBoe of proved developed ("PD") reserves in the divestiture of its non-core Colorado dry gas assets and Appalachian shallow Upper Devonian dry gas assets, the reserve increase from continuing operations was approximately 50%. The Company's before tax PV-10 proved reserve value increased to $2.7 billion at December 31, 2013 compared with $1.7 billion at year-end 2012, driven primarily by highly economic reserve additions in the liquid-rich Wattenberg Field. Proved reserves at year-end 2013 were comprised of approximately 54% liquids and 46% natural gas.

The Company's proved reserve additions included further Wattenberg downspacing and an increase in per well reserves in the horizontal Niobrara and Codell formations, as well as initial proved reserve bookings in the Utica Shale play. Total proved undeveloped ("PUD") horizontal locations in the Wattenberg Field increased to 623, including 543 in the Niobrara play and 80 in the Codell play.

James Trimble, Chief Executive Officer and President, stated, "Our 2013 year-end reserve estimates set several records for the Company, including total proven and 3P reserves, reserve additions, percent liquids, and before tax PV-10 value. Additionally, we booked initial reserves from our Utica Shale play and are seeing strong production growth from this emerging liquid-rich area. We also experienced solid production for the full-year 2013 of approximately 7.3 MMBoe. Our plan is to ramp up the pace of development by adding a fifth drilling rig in Wattenberg in the second quarter of 2014 and a second drilling rig in the Utica in the second half of 2014."

The Company's independent reserve engineers, Ryder Scott Company, L.P., completed its estimate of PDC's year-end 2013 proved reserves in accordance with Securities and Exchange Commission ("SEC") guidelines, using NYMEX prices of $96.94 per barrel ("Bbl") for crude oil and $3.67 per million British Thermal Units ("MMBtu") for natural gas, before adjustments for energy content, quality, midstream fees, and basis differentials.

 

2013 Year-End Proved Reserves Summary
 
Proved
Reserves

(MMBoe)

BTAX
PV-10
($MM)

BTAX
PV-10
($/Boe)
Beginning balance at December 31, 2012 192.8 $1,709 $8.86
Drilling, improved well performance and pricing revisions 95.3    
Acquisitions 1.1    
Divestitures (16.1)    
2013 production (7.3)    
Ending balance at December 31, 2013 265.8 $2,704 $10.17

During 2013, PDC added 95 MMBoe of proved reserves through a combination of drilling, improved well performance and pricing revisions. The 95 MMBoe includes the benefit of increased well density on PUD locations in the Niobrara and Codell plays. In addition, the Company increased reserves 33% in the Appalachian Basin, primarily in the Marcellus Shale, and booked proved reserves of 14.4 MMBoe in the Utica Shale. The strong PUD reserve growth in the Wattenberg and the divestiture of PD reserves resulted in total PD reserves being 28% of total proved reserves as of December 31, 2013.

The following table provides PDC's 2012 and 2013 total proved reserves ("1P") by major operating area:

 

Total Proved Reserves (1P) at December 31,
(MMBoe)
 
  2012 2013
Wattenberg 148.9 211.9
Appalachia 29.8 39.5
Utica -- 14.4
Piceance 11.1 --
Northeast Colorado (NECO) 3.0 --
Total: 192.8 265.8

2013 Proved, Probable and Possible Reserves ("3P")

PDC's internal estimate of 3P reserves increased approximately 45% from 589 MMBoe at December 31, 2012 to 854 MMBoe at December 31, 2013, and contains an estimated 56% liquids and 44% natural gas mix. The increase in the Company's 3P reserves was primarily related to additional downspacing of the liquid-rich Wattenberg Niobrara and Codell plays to approximately 22 total wells per section, which increased the Company's Wattenberg 3P inventory to over 2,800 gross horizontal locations. Overall, the Company's total 3P horizontal inventory increased to 3,600 gross locations.

Upcoming Investor Presentations and Analyst Day

PDC is scheduled to present at the following conferences: SunTrust Appalachian Mini-Conference in Pittsburgh, Pennsylvania on Monday, February 3, 2014; the Credit Suisse Energy Summit in Vail, Colorado on February 11, 2014; and the IPAA-OGIS conference in Ft. Lauderdale, Florida on February 12, 2014. PDC also plans to host an analyst day in New York on Thursday, April 17, 2014. The event is scheduled to be held at the NASDAQ Market Site, 4 Times Square, New York, New York. Please see the Company's website at www.pdce.com for full details and webcast information. The related slide presentation is expected to be available on the Company's website immediately prior to the event.

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 2000 Index of Companies.

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