- Year-over-year production growth of approximately 25 percent to an estimated 38 to 42 million barrels of oil equivalent ("MMBoe").
- Oil production to account for approximately 42 percent of total production, representing a year-over-year oil volume increase of approximately 30 percent.
- Year-over-year Delaware Basin production growth estimated to exceed 80 percent.
- Anticipated capital investment between $850 and $920 million with an expected outspend of approximately $130 million utilizing a $50 oil and $3 gas price deck.
- Anticipate operating in a cash flow neutral environment over the second half of 2018, including an anticipated cash flow positive fourth quarter assuming $50 oil and $3 gas.
- Spud approximately 153 operated wells and turn-in-line ("TIL") approximately 161 operated wells.
PDC's current borrowing base has been established at $1.1 billion, with an elected commitment amount of $700 million. Given the recent issuance of $600 million of 5.75% Senior Notes due in 2026, the anticipated redemption of the $500 million 7.75% Senior Notes, and considering the anticipated closing of its Wattenberg acquisition, the Company anticipates to be minimally drawn on its revolving credit facility at year-end 2017. Assuming $50 oil and $3 gas pricing, PDC anticipates its 2018 capital investment to modestly exceed its expected cash flows from operations by approximately $130 million. PDC plans to be cash flow positive in the fourth quarter of 2018. Additionally, the Company expects to further improve its year-end leverage ratio, as defined by its revolving credit facility, from an estimated 1.8 times at year-end 2017, to approximately 1.6 times at year-end 2018.The Company continues to focus on delivering a strong balance sheet and improved operational execution, resulting in 2018 expected production of 38 to 42 MMBoe, or approximately 104,000 to 115,000 Boe per day, representing year-over-year growth of approximately 25 percent compared to anticipated 2017 volumes. In Wattenberg, the Company plans to manage its TIL cadence to coincide with the expected fourth quarter expansion of third party processing in the field; while Delaware Basin TILs are expected to deliver initial production late in the first quarter as completion activity is expected to resume early in 2018. 2018 corporate production growth is expected to be modest in the early part of the year, with more robust growth expected later in the year with the Delaware contributions and the anticipated relief of Wattenberg midstream constraints. The December 2018 exit rate is anticipated to be more than 120,000 Boe per day. The Company anticipates closing the sale of its Utica Shale assets in early 2018. Operational Details In 2018, the Company plans to invest approximately $480 million in the Wattenberg Field, of which approximately $425 million is expected to be invested in operated drilling and completion activity, with the majority of the remaining capital related to participation in non-operated projects. PDC plans to spud and TIL approximately 131 and 139 operated wells, respectively. Activity in 2018 is expected to be primarily focused in the Company's Kersey area, with approximately 60 percent of 2018 TILs anticipated to be mid- or extended-reach lateral wells. Average operated working interests in Wattenberg in 2018 is expected to be approximately 85 percent with well costs projected to remain flat compared to 2017 levels.
In the Delaware Basin, the Company plans to invest approximately $395 million, of which approximately $275 million is expected to be dedicated to operated drilling and completions investments. PDC plans to spud 22 wells, 20 of which are expected to be located in the Company's Eastern area. The Company plans to TIL 22 wells in 2018, approximately 50 percent of which are projected to be in the Company's consolidated position within its Eastern area. Driven by early successful outperformance in its Eastern area wells, the Company has included an increase to its Eastern area type curves to a range of 1 million to 2.6 million Boe per well, depending on lateral length, targeted completion zone and drilling location. Estimated well costs for 2018 are projected to be between $9 million and $14 million per well, depending on lateral length. Estimated well costs include the Company's enhanced completion design, which it believes is the primary contributor to early production outperformance of its acquisition type curves.Included in the Company's 2018 Delaware Basin capital program is approximately $60 million to expand its midstream asset infrastructure, of which approximately $20 million is allocated to constructing crude oil gathering systems in the Company's Eastern area. The Company anticipates delivering crude oil volumes on this system to third party purchasers in the fourth quarter of 2018. Similar to 2017, the Company plans to invest in salt water disposal wells, compressor station upgrades and production gathering lines across its Eastern and Central areas. Lastly, the Company plans to allocate approximately $60 million in non-operated drilling and completion activities, leasing, seismic and other miscellaneous capital. Upcoming Investor Conferences PDC is scheduled to attend the Goldman Sachs Energy Conference in Miami, on Tuesday, January 9, 2018. There is no webcast scheduled for this event, however, the Company expects to post an updated presentation prior to attending the event.
About PDC Energy, Inc.PDC Energy, Inc. is a domestic independent exploration and production company that produces, develops, and explores for crude oil, natural gas, and NGLs, with primary operations in the Wattenberg Field in Colorado and the Delaware Basin in Reeves and Culberson Counties, Texas. The Company also has operations in the Utica Shale in Southeastern Ohio, which it plans to divest. PDC's operations are focused in the horizontal Niobrara and Codell plays in the Wattenberg Field and in the Wolfcamp zones in the Delaware Basin. NOTE REGARDING FORWARD-LOOKING STATEMENTS Statements in this news release and all other statements other than statements of historical fact, are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements including those related to pending acquisitions are subject to a number of risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, outlook, targets, and similar expressions or variations of such words are intended to identify forward-looking statements herein. Forward-looking statements may include, among other things, statements regarding PDC's future production, cash flows, capital expenditures and projects, cost-saving initiatives, operational enhancements, rates-of-return, debt metrics, liquidity, future differentials and management's strategies, plans and objectives; the closing of the pending acquisition of certain properties owned by Bayswater Exploration and Production, LLC and certain related parties are subject to continuing diligence between the parties and may not occur within the expected timeframe or may not successfully close such transactions. Throughout the press release we may use the terms "projection", "outlook" or similar terms or expressions, or indicate that we have "modeled" certain future scenarios. We typically use these terms to indicate our current thoughts on possible outcomes relating to our business in periods beyond the current fiscal year. Because such statements relate to events or conditions further in the future, they are subject to increased levels of uncertainty. PDC urges you to carefully review and consider the cautionary statements made in this press release, the Item 1-A Risk Factors in the 2016 Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission ("SEC") on February 28, 2017, and other filings with the SEC for further information on risks and uncertainties that could affect the Company's business, financial condition and results of operations, which are incorporated by this reference as though fully set forth herein. The Company cautions you not to place undue reliance on forward-looking statements, which speak only as of the date made. PDC undertakes no obligation to update any forward-looking statements in order to reflect any event or circumstance occurring after the date of this release or currently unknown facts or conditions or the occurrence of unanticipated events. All forward looking statements are qualified in their entirety by this cautionary statement . Investor Contacts: Michael EdwardsSenior Director Investor Relations email@example.com
Kyle SourkManager Investor Relations303firstname.lastname@example.org