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PDC Energy Announces 2013 Capital Budget Of $324 Million And Production Guidance Of 55 To 57 Bcfe; Successful Initial Utica Shale Results; Update Of Activity In The Wattenberg Field And Marcellus Shale

Stocks in this article: PDCE

Utica Shale

PDC's Onega Commissioners 14-25H well in Guernsey County, Ohio tested through tubing at a peak rate of 1,796 barrels of oil equivalent ("Boe") per day on a 26/64" choke with an average rate of 1,501 Boe per day for 24 consecutive hours. The Onega Commissioners 14-25H well flow test was conducted following a 60-day resting period.

Based upon composition analysis, the gas being produced is 1254 BTU rich gas. Assuming full ethane recovery with a natural gas shrink of 20%, the composition mix of the production is 56% condensate, 23% NGLs and 21% residue gas. The well was drilled to a lateral length of 3,950 feet and completed with 13 frac stages.

PDC is currently evaluating midstream options and anticipates the Onega Commissioners 14-25H will begin flowing into a sales pipeline during the second quarter of 2013. The Company's second horizontal well, the Detweiler 42-3H, is expected to be completed in mid-December and should be flow tested in the first quarter of 2013 following a 60-day rest period.

The Company plans to begin drilling a three-well pad in Guernsey County in the first quarter of 2013 followed by two horizontal wells in Washington County, Ohio to further delineate its 45,000 net acre position in the Utica Shale play.

Wattenberg Field

PDC is presently drilling its 53rd horizontal well in the core area of the Wattenberg Field, including 45 Niobrara B wells and eight Codell wells. Early production results from the Codell wells are comparable to the average type curve of 350 thousand barrels of oil equivalent ("MBoe") for the Niobrara B wells and yielding 70%-80% liquids. The Company is drilling all wells from multi-well pads to improve drill times and other operating efficiencies. PDC has brought two downspacing projects online to test an increased density of 12 wells per 640 acres, targeting the Niobrara B and Codell formations. The Company is now developing horizontal wells in the Wattenberg Field based on an increased density of 12 or more wells per section, which could provide the Company with an estimated 1,800 or more potential horizontal locations on its 103,000 net acre position in the core Wattenberg. PDC is also conducting its first horizontal tests of the Niobrara A and C benches to evaluate their potential. As part of the Company's 2013 capital budget the Company plans to deploy a third drilling rig during the third quarter of 2013 to coincide with anticipated third-party midstream expansions.

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