Oil and gas producers Noble Energy Inc. and PDC Energy Inc. announced Thursday that they have agreed to trade leased land in the greater Wattenberg area in Northern Colorado, allowing each company better opportunities for longer lateral drilling that they say will result in less surface impact.
Houston-based Noble Energy (NYSE: NBL) will receive approximately 11,700 acres in the company’s Wells Ranch development area, and Denver-based PDC Energy (Nasdaq: PDCE) will receive approximately 13,500 acres located southwest of Wells Ranch.
The difference in acreage exchanged is driven primarily by variances in net revenue interest, the companies said in separate statements. Existing production on the acreage will remain with each party. The transaction is expected to close early in the fourth quarter.
“This strategic acreage exchange expands our Wells Ranch acreage position by approximately 20 percent and provides substantial operating synergies and cost efficiencies for both ourselves and PDC Energy,” Charles J. Rimer, a Noble Energy senior vice president, said in a prepared statement. He also said the trade will simplify the company’s long-term development of the DJ Basin.
The new acreage will increase opportunities for long lateral drilling. “The higher contiguous acreage positions for both companies should result in fewer surface locations, reducing the above ground impact,” Rimer said.
Bart Brookman, PDC’s president and chief executive, said the trade will enable PDC to design more comprehensive, long-term development plans, take advantage of operational synergies and streamline costs for transporting its raw product to wholesalers.