PDC Energy acquired and traded acreage in Weld County, Colo., creating two new positions in the core Wattenberg Field.
PDC Energy Inc. (NASDAQ: PDCE) shored up its core Wattenberg Field holdings with a pair of deals—a $210 million acquisition and a separate acreage swap—in Weld County, Colo., the company said Sept. 25.
The transactions will create two new positions in the Wattenberg, which, along with its existing Kersey Area operations, will be the Denver-based company’s focal points as it continues to develop its assets in the Denver-Julesburg Basin.
PDC president and CEO Bart Brookman said the deals offer a “great opportunity to not only drill more extended-reach lateral wells, but add to our existing inventory of highly economic projects in the core Wattenberg Field.”
“As we have experienced first-hand in our Kersey Area, there are significant capital and operational efficiencies, reduced surface impacts and incremental value created through consolidated acreage positions,” Brookman said.
In PDC’s bolt-on, the company will purchase about 8,300 net acres in what will be called the “Prairie Area” from Bayswater Exploration & Production LLC for $210 million in cash. Average net production is about 2,200 barrels of oil equivalent per day, of which about 60% is crude oil.
PDC estimates the deal adds an additional 240 gross drilling locations and increases its working interests in nearly 60 locations. The acquisition also adds 30 operated, drilled uncompleted (DUC) wells.
With the bolt-on, PDC said its holdings will increase to roughly 30,000 net acres in the middle and outer core areas of the Wattenberg Field. The company anticipates closing the transaction late in fourth-quarter 2017 and funding the acquisition with available cash and debt.
In PDC’s acreage swap, the company transacted leasehold, but not production, wellbores or facilities, in the “Plains Area.”
The “Plains Area” trade will give the company 11,700 net acres in exchange for 12,100 net acres. PDC said in a news release that the difference in the acreage is “primarily due to variances in working and net revenue interests.”
The acreage transfer, when combined with the company’s existing acreage and portions of a previous acreage trade, will give PDC about 17,500 net acres in the inner and middle core areas of the Wattenberg. The other party PDC traded with wasn’t disclosed.
The deal will have to pass muster with title examinations and other adjustments before closing sometime in the fourth quarter, the company said.
Darren Barbee can be reached at dbarbee@hartenergy.com.
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