PDC Energy To Sell Non-Core Colorado Natural Gas Assets For Approximately $200 Million; Positions Company To Accelerate Development Of Its Liquid-Rich Horizontal Programs In Core Wattenberg And Utica Shale
DENVER, Feb. 5, 2013 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today announced the Company has signed a definitive agreement to sell its Piceance, NECO, and other non-core Colorado holdings to Denver-based Caerus Oil and Gas LLC for approximately $200 million in cash, subject to purchase price adjustments. The transaction includes the buyer's assumption of all PDC's firm transportation obligations related to the sale assets as well as certain natural gas hedging positions for the years 2013 through 2015.
The effective date of the transaction is January 1, 2013 and it is expected to close in the second quarter of 2013, subject to customary closing conditions. The assets to be sold are approximately 99% natural gas and include an estimated 85 billion cubic feet equivalent ("Bcfe") of net proved developed producing reserves as of December 31, 2012. The assets currently produce approximately 42 million cubic feet equivalent per day net and the sale is expected to reduce PDC's net production volume in 2013 by approximately 10 Bcfe. Petrie Partners LLC advised PDC on the sale.
CEO CommentJames Trimble, President and Chief Executive Officer, stated, "We are extremely pleased that this planned divestiture positions us to accelerate the development of our high-return, liquid-rich Wattenberg and Utica Shale horizontal drilling inventory. The sale represents a major step in our transition towards a high quality, liquid-rich asset base by increasing our year-end 2012 pro forma proved reserve mix to 52% oil/liquids. The transaction also strengthens our balance sheet and debt metrics, increases per-unit margins, and improves our long-term growth profile. Proceeds from this sale and internally generated cash flow are expected to more than fully fund our previously announced 2013 capital program. In order to more accurately reflect the increased liquids mix of our asset base, the Company will begin to report our 2013 production and reserves in terms of barrels equivalent, rather than MCF equivalent."
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