PDC Energy to slow Front Range drilling, cuts capital expenditures by up to 25% after oil price collapse

DENVER — The second-largest oil producer in Weld County is cutting spending on new wells through 2021 by nearly a quarter, days after oil prices sank to their lowest levels in decades.

In a statement to investors, Denver-based PDC Energy Inc. (Nasdaq: PDCE) said it will slow new drilling in the Wattenberg Field from three drilling rigs and two completion crews to just two rigs and one crew beginning in the second quarter of this year and revert overall production levels to the 2019 averages of 200,000 barrel equivalents per day.

The Wattenberg Field covers most of southwest Weld County and extends partially into eastern Boulder County and parts of northern Broomfield and Adams counties.

The company will also stop building pads in the west Texas Delaware basin through 2020 and defer building 10 to 15 wells next year. PDC previously expected to invest around $1 billion in capital spending over the next two years.

It’s unclear how many employees may be temporarily out of work for the rest of the year. A representative for PDC did not respond to a request for comment Wednesday night.

PDC’s new budget assumes the price of West Texas Intermediate oil will remain around $35 per barrel through 2020 and reach $40 by 2021.

Saudi Arabia and Russia said they would each increase production last weekend after OPEC and affiliated countries failed to agree to cut output to match lower fuel demand because of the spread of the COVID-19 virus globally.

The expected flooding of cheap oil into the world market by the second- and third-largest oil-producing countries sank prices by nearly a quarter and almost as low as $30 per barrel Monday.

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