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PDC Energy Announces 2012 Fourth Quarter And Year-End Results; Successful Results From Second Horizontal Utica Shale Well

Stocks in this article: PDCE

DENVER, Feb. 27, 2013 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today reported its 2012 fourth quarter and year-end financial and operating results.

In mid-February 2013, the Company flow tested its second horizontal Utica Shale well in Guernsey County, Ohio. The Detweiler 42-3H well tested through tubing at a peak rate of 2,197 barrels of oil equivalent ("Boe") per day on a 20/64" choke with an average rate of 2,039 Boe per day for 24 consecutive hours. The Detweiler 42-3H well flow test was conducted following a 60-day resting period. Based upon composition analysis, the gas being produced is 1,263 BTU rich gas. Assuming full ethane recovery with a natural gas shrink of 21%, the composition mix of the production is 49% condensate, 26% NGLs and 25% residue gas. The well was drilled to a lateral length of 3,868 feet and completed with 13 frac stages. The Company is currently drilling a three-well pad in Guernsey County, which will be followed by two horizontal wells in Washington County, Ohio.

2012 Highlights

PDC focused on expanding its inventory of liquid-rich projects in 2012 and increasing its ratio of oil and natural gas liquids ("NGLs") to total production. Some of the key events that took place during the year were:

  • Total proved reserves at year-end 2012 increased 14% from year-end 2011 to approximately 1.2 trillion cubic feet equivalent (Tcfe). Oil and NGLs made up 48% of proved reserves at year-end 2012.  
  • Total 3P (proved, probable and possible) reserves increased approximately 70% from year-end 2011 to 3.6 Tcfe at year-end 2012.  
  • PDC acquired approximately 30,000 net acres and related production in the core Wattenberg Field.  
  • The Company increased its inventory of drilling locations to over 1,400 proved and probable locations in the core Wattenberg Field through downspacing and the Wattenberg Field acquisition.  
  • PDC completed its acquisition of approximately 45,000 net acres in the emerging liquid-rich Utica Shale play in southeastern Ohio and began a drilling program to delineate and de-risk its leasehold position.

The Company strengthened its balance sheet and liquidity in 2012 through a series of transactions:

  • PDC closed the divestiture of its Permian Basin assets for $189 million.  
  • The Company closed an equity offering of 6.5 million shares of common stock for net proceeds of approximately $164 million.  
  • In October, PDC completed a private placement of $500 million of 7.75% Senior Notes due in 2022. Additionally, in November, the Company redeemed its $203 million of 12% Senior Notes due in 2018.  
  • The Company's available liquidity position as of December 31, 2012 was $399 million, compared to $196 million as of December 31, 2011.

In February 2013, PDC announced an agreement to sell its non-core Colorado natural gas assets for approximately $200 million, positioning the Company to accelerate development of its liquid-rich horizontal programs in the core Wattenberg Field and Utica Shale. Completion of the expected sale will further strengthen the Company's liquidity position.

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