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PDC Energy, which did not name the seller, said it will close on the deal June 29. The assets include an estimated 35,000 net acres for horizontal development of the Niobrara and Codell formations, the company said.
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“The acquisition solidifies PDC’s position as the third largest leaseholder with about 103,000 net acres in the highly sought-after Core Wattenberg Field,” PDC Chief Executive Officer James Trimble said in the statement.
The current net production of the area is about 2,800 barrels of oil equivalent per day from about 700 wells in the Niobrara and Codell formations. PDC Energy’s independent engineering consulting firm estimates the assets contain proven reserves of 29.2 million barrels of oil equivalent.
The proven reserves consist of 58 percent crude oil and natural-gas liquids. The company believes the acreage will deliver reserves of 300,000 to 500,000 barrels of oil equivalent per well.
PDC also plans to deploy a second horizontal rig to the Wattenberg beginning in the third quarter and drill about 37 horizontal Niobrara wells this year. It plans to add a third horizontal rig next year.
PDC also said Monday that the company, traded on the Nasdaq, intends to offer 6.5 million shares of common stock to the public through an underwritten offering. The company plans to use the net proceeds from the offering to finance a portion of the Wattenberg acquisition.