DENVER, Sept. 19, 2012 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today announced the Company is pursuing development of its Utica Shale ("Utica") position in southeast Ohio independently and is no longer actively seeking a joint venture ("JV") partner to develop the play. The Company received various joint ownership and development proposals from interested potential JV partners in August and early September, 2012 and has determined that the proposals do not meet PDC's value expectations. PDC believes that developing its approximate 45,000 net acre Utica position on a standalone basis will produce greater long-term value, particularly given the very high initial production rates and high liquids content from recent well results announced by other E&P companies in close proximity to the Company's acreage positions. While the 2013 budget is not finalized, the Company anticipates it will invest approximately $50 million in the Utica next year which is expected to be funded from cash flow and borrowings under its revolving credit facility. The emerging Utica play is exceeding the Company's expectations in several key areas including initial production rates, liquids mix, the pace of de-risking, and the delineation of the gas condensate window of the play which encompasses a substantial portion of PDC's leasehold position. One of the Company's initial criteria for establishing a Utica JV was to accelerate the de-risking of PDC's leasehold position, which has been substantially achieved by PDC and other operators' activity in the area. Furthermore, PDC has development flexibility for its estimated 200 horizontal locations given that approximately 50% of its acreage is held by production and the remaining 50% are multi-year primary term leases. 2012 Drilling Activity PDC has drilled its first two horizontal wells in Guernsey County, Ohio and is very encouraged by drilling, mud log and geological data results. The Company's first horizontal well, the Onega Commissioners #14-25H, is currently being completed. The well will be shut in for an approximate 60-day rest period and is anticipated to be flow tested in November 2012. The Company's second horizontal well, the Detweiler #42-3H, is expected to be completed around year-end 2012 and flow tested in the first quarter of 2013 subsequent to its rest period. A third horizontal well is expected to be spud in the fourth quarter of 2012 in northern Washington County. The well will be the first horizontal well drilled in the Company's southern acreage. First sales from the three horizontal wells are anticipated in the second quarter of 2013.
Utica Development PlanPDC plans to continue to de-risk and develop its existing 45,000 net acre position, and does not expect to materially increase its leasehold. The Company plans to finalize its mid-stream strategy for gas gathering and processing and complete its marketing arrangements to sell condensate, natural gas and NGLs by year-end 2012. PDC anticipates establishing a district field office in southeast Ohio in the first quarter of 2013. The Company's 2012 Utica capital program is expected to total approximately $95 million for drilling, completion and leasing activity. PDC anticipates a Utica capital budget of approximately $50 million in 2013 to drill, complete and connect four to five horizontal wells in Guernsey, northern Noble and northwest Washington Counties. The 2012 and 2013 drilling programs will test a substantial portion of the Company's leasehold. James Trimble, President and Chief Executive Officer, stated, "We are extremely pleased with our Utica position and believe it is in the best long-term interest of our shareholders to develop our current position without a joint venture partner. Results from PDC and the industry continue to reinforce our position that the Utica could be one of the top tier economic shale plays in the US onshore. The high liquids mix from initial Utica well results further enhances our corporate strategy to transition towards more liquid-rich assets in our portfolio. We have formulated a Utica development plan and believe we have the financial capacity to execute this plan in 2012 and beyond." Upcoming Industry Conference Participation PDC is scheduled to present at the Johnson Rice Energy Conference in New Orleans, Louisiana on Tuesday, October 2, 2012. Please see the Company's website at www.pdce.com for full details and webcast information. About PDC Energy, Inc. PDC is an independent energy company engaged in the development, production and marketing of natural gas and oil. Its operations are focused primarily in the Wattenberg Field of Colorado, including the horizontal Niobrara and Codell, the Utica Shale in Ohio and the Marcellus Shale development in West Virginia. PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.
NOTE REGARDING FORWARD-LOOKING STATEMENTSThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 ("Securities Act") and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act") regarding PDC's business, financial condition, results of operations and prospects. All statements other than statements of historical facts included in and incorporated by reference into this report are forward-looking statements. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements herein, which include statements regarding the Company's development plans, future capital projects and expenditures, the availability of capital resources to fund those projects and expenditures, the timing of the drilling, completion and testing of wells, the availability of gathering, processing and marketing arrangements for production from those wells, the timing of sales from those wells, future acquisition activity, and management's strategies, plans and objectives. However, these are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this report reflect the Company's good faith judgment, such statements can only be based on facts and factors currently known to PDC. Consequently, forward-looking statements are inherently subject to risks and uncertainties, including risks and uncertainties incidental to the exploration for, and the acquisition, development, production and marketing of natural gas and oil, and actual outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:
- changes in production volumes, worldwide demand and commodity prices for natural gas and oil;
- the availability of sufficient pipeline and other transportation facilities and related gathering, processing and marketing arrangements and the impact of these facilities and arrangements on price;
- changes in estimates of proved reserves;
- declines in the values of PDC's natural gas and oil properties resulting in impairments;
- the timing and extent of the Company's success in discovering, acquiring, developing and producing natural gas and oil reserves;
- PDC's ability to acquire leases, drilling rigs, supplies and services at reasonable prices;
- reductions in the borrowing base under the Company's credit facility or other limitations on the anticipated availability of capital;
- risks incident to the drilling and operation of natural gas and oil wells;
- the discovery of unanticipated title problems;
- future production and development costs;
- the effect of existing and future laws, governmental regulations and the political and economic climate of the United States of America;
- changes in environmental laws and the regulations and enforcement related to those laws;
- the identification of and severity of environmental events and governmental responses to the events;
- the effect of natural gas and oil derivative activities;
- conditions in the capital markets; and
- losses possible from pending or future litigation.
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