PDC Energy presents at EnerCom’s The Oil & Gas Conference®
During PDC’s breakout session, management was asked the following questions:
- What has driven your LOEs to the lowest in class?
- Is there a Delta P issue with plunger-lift wells?
- Has there been any update on Initiatives 75 and 78 in Colorado?
- Would the defeat of these initiatives kill the issue?
- What were the outcomes of the orientation tests in the Northwestern Wattenberg?
- Are you looking towards orientation work to maximize production economics in the Utica?
- What effects will water issues have on LOEs?
- Regarding your NGL supply chain, where does it come from, who are your customers, and what is the cost to move it?
- Have improvements in rig efficiency and capex layouts affected your three-year plan?
- What gives you the confidence to put productivity improvements several years out into your plan?
- What’s the opportunity set for potential acquisitions in the Wattenberg right now?
- What percentage of your wells drilled will be XRL after the trade with Noble?
You can listen to PDC’s presentation by clicking here.
For the company’s second quarter results, click here.
PDC streamlines acreage position, increases production in the Wattenberg Field
PDC is a 40-year old independent E&P company operating in the Wattenberg filed in Colorado and in the Utica Shale play in Ohio. Its operations are focused in the liquids-rich horizontal Niobrara and Codell plays and the condensate and wet gas portion of the Utica. The company holds approximately 96,000 net acres in the Wattenberg, and approximately 65,000 net acres in the Utica shale.
PDC sold the company’s Marcellus assets in November 2014, and has focused operations on the Wattenberg and Utica. The company’s Q1 2016 net production increased approximately 56% year-over-year to 50.2 MMBoe/d, with increases across the board in oil, natural gas, and NGLs. The production was derived primarily from the Wattenberg Field, and consisted of 61% crude oil and NGLs, and 39% natural gas.
Production increases were driven by the successful execution of the horizontal development program in the Wattenberg. These increases occurred despite widespread down time from a severe late March snowstorm that resulted in an estimated 100,000 Boe impact.
On June 16, the company entered definitive agreements with Noble Energy, Inc. to increase the company’s position in the Wattenberg. PDC agreed to receive 13,500 leasehold acres in exchange for 11,700 acres in the Middle Core Wattenberg field in Weld Country, Colorado. Benefits of the trade include more comprehensive, long-term development plans, operational benefits, and streamlined marketing and midstream efforts.
In the first quarter, the company brought 47 gross wells online in the Wattenberg Field at a production rate of 47,840 Boe per day. Average wellhead differentials in Wattenberg were approximately $6.70 per barrel. First quarter Utica production stood at 2,376 Boe per day with average differentials of less than $7 per barrel. The 10,000-foot lateral Neff well and the 6,000-foot lateral Mason two-well pad are expected to be brought online in the third quarter.
Other highlights of the first quarter included the completion of a March equity offering of six million shares with net proceeds of $297 million. The company’s Senior Unsecured Notes were upgraded to BB- from B+ by Standard & Poor’s and Corporate Ratings at Moody’s and Standard & Poor’s were affirmed at B1 and B+, respectively.
On May 16, the company’s borrowing base on its revolving credit facility was reaffirmed at $700 million, with the company electing to keep its commitment level at $450 million. The company also settled its “3.25% Convertible Senior Notes due 2016” using the proceeds of the March equity offering. This move increased the liquidity available to PDC.
