PDC Energy (ticker: PDCE) is an independent natural gas and oil company that operates in Colorado within the liquid-rich Wattenberg Field and the Appalachian Basin including the emerging liquid-rich Utica Shale play in Ohio and the Marcellus Shale in West Virginia.
Gysle R. Shellum, CFO for PDC Energy, recently presented in San Francisco and focused on PDCE’s results in the Niobrara area. The following were a few key takeaways based on his presentation:
- From year end 2011 to year end 2012, PDCE grew its proved reserves by 80% to 179 MMBOE and more than doubled its 3P reserves to 589 MMBOE.
- Growth engine the last year and a half has been the Niobrara and Codell programs.
- PDCE’s weighted average EUR for 1,500 locations in the Wattenberg is 335 MBOE (generates an IRR of 74% with a PV-10 of $4.2 million)
- Inner Core EURs in the Niobrara are 500 MBOE with an IRR of 140%.
- Given returns, PDCE is contemplating bringing in an additional rig to the Wattenberg.
- Future growth opportunities exist with Niobrara downspacing, de-risking the Codell and its Utica program.
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