PDC Energy Announces Closing of Acquisition in the Liquid-Rich Core Wattenberg Field and Upsize of Its Revolving Credit Facil...
July 02 2012 - 8:56AM
PDC Energy ("PDC" or the "Company") today announced that it has
closed the previously announced acquisition of core Wattenberg
assets from a private party for a purchase price of approximately
$327 million subject to certain post-closing adjustments. The
acquisition was funded with cash and borrowings under its revolving
credit facility. The Company raised approximately $164 million in
net proceeds through an equity offering which closed on May 21,
2012 to partially fund the acquisition cost. The effective date of
the transaction is April 1, 2012.
The Company also announced its borrowing base under its
revolving credit facility has been increased by $100 million to
$525 million, effective June 29, 2012. The Company expects to have
approximately $250 million drawn on its facility upon closing of
the acquisition.
James Trimble, President and Chief Executive Officer of PDC
Energy, stated, "We are very excited to have expanded our position
in the horizontal Niobrara play. The acquired assets are located
almost entirely in the core Wattenberg Field, are largely
contiguous with our existing assets, and provide us with an
additional 180 horizontal Niobrara drilling locations as well as
additional opportunities from Niobrara downspacing and horizontal
Codell development. We plan to begin operating a second rig on our
horizontal Niobrara acreage in early July. We are also confident
the increase in our borrowing base, as a result of the acquisition,
will provide us with more than sufficient liquidity to execute our
accelerated drilling program in the Wattenberg Field while
maintaining strong balance sheet metrics."
Upcoming Conference
Presentations
PDC is scheduled to present at EnerCom's Oil & Gas
Conference in Denver, Colorado on Tuesday, August 14, 2012. Please
see the Company's website at www.petd.com for full details and
webcast information.
About PDC Energy
PDC Energy is a domestic independent exploration and production
company that acquires, develops, explores, and produces natural
gas, NGLs, and crude oil. The Company's Western Operating Region is
primarily focused on development in the Wattenberg Field in
Colorado, particularly in the liquid-rich horizontal Niobrara play
and on the ongoing development of refracture/recompletion of PDC's
existing Wattenberg vertical wells. In the Company's Eastern
Operating Region, PDC is focused on horizontal development in the
Marcellus Shale in northern West Virginia, and recently initiated
exploration and development activity in the liquid-rich portion of
the Utica Shale play in Ohio. PDC is included in the S&P
SmallCap 600 Index and the Russell 3000 Index of Companies.
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 regarding PDC's
business, financial condition and results of operations. These
statements and all other statements other than statements of
historical facts included in and incorporated by reference into
this press release are "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Words such as expects,
anticipates, intends, plans, believes, seeks, estimates, projects
and similar expressions or variations of such words are intended to
identify forward-looking statements herein. Such statements include
those regarding the Company's future financial and operating
results, including cash flows from Horizontal Niobrara wells and
the resulting present values of those wells; future capital
projects and expenditures; estimated natural gas and oil production
and reserves; future reserve estimates; anticipated increased
production from the acquired assets; anticipated synergies as a
result of the acquisition, including anticipated strong economic
returns; development plans for the acquired acreage; our
expectation that the increase in our borrowing base will provide us
with sufficient liquidity to execute our accelerated drilling
program in the Wattenberg Field; plans to deploy a second
horizontal rig beginning in the third quarter to drill in the Core
Wattenberg Field and management's strategies, plans and objectives.
However, these are not the exclusive means of identifying
forward-looking statements herein. Although forward-looking
statements contained in this release reflect the Company's good
faith judgment, such statements can only be based on facts and
factors currently known to PDC. Consequently, forward-looking
statements are inherently subject to risks and uncertainties,
including known and unknown risks and uncertainties incidental to
the exploration for, and the acquisition, development, production
and marketing of natural gas and oil, and actual outcomes may
differ materially from the results and outcomes discussed in the
forward-looking statements. Important risk factors that could cause
actual results to differ materially from the forward-looking
statements include, but are not limited to:
- changes in production volumes and worldwide demand;
- volatility of commodity prices for natural gas and oil;
- changes in estimates of proved reserves;
- inaccuracy in reserve estimates and expected production
rates;
- declines in the values of PDC's natural gas, NGL, and oil
properties resulting in impairments; and/or write-downs of
reserves
- the future cash flow, liquidity and financial position of the
Company;
- the timing and extent of the Company's success in discovering,
acquiring, developing and producing natural gas and oil
reserves;
- PDC's ability to acquire leases, drilling rigs, supplies,
services and personnel at reasonable prices;
- reductions in the borrowing base under the Company's credit
facility;
- risks incident to the drilling and operation of natural gas and
oil wells;
- future production and development costs;
- the availability of sufficient pipeline and other
transportation facilities to carry PDC's production and the impact
of these facilities on price;
- the effect of existing and future laws, governmental
regulations and the political and economic climate of the United
States;
- changes in environmental laws and the regulations and
enforcement related to those laws;
- the impact of weather and the occurrence of disasters such as
fires, floods and other events and natural disasters and
governmental responses to such events;
- competition in the oil and gas industry;
- the success of prospect development and property acquisition by
the Company;
- the success of the Company in marketing oil and gas;
- the effect of natural gas and oil derivative activities and
plans;
- conditions in the capital markets;
- unanticipated liabilities assumed as a result of, or other
problems with, the transaction;
- losses possible from pending or future litigation; and
- the success of strategic plans, expectations and objectives for
future operations of the Company.
Further, PDC urges you to carefully review and consider the
cautionary statements made in this press release, the Item 1-A Risk
Factors in the 2011 annual report on Form 10-K for the year ended
December 31, 2011, filed with the Securities and Exchange
Commission ("SEC") on March 1, 2012, the quarterly report on Form
10-Q for the quarter ended March 31, 2012, filed with the SEC on
May 10, 2012, and other filings with the SEC for further
information on risks and uncertainties that could affect the
Company's business, financial condition and results of operations,
which are incorporated by this reference as though fully set forth
herein. The Company cautions you not to place undue reliance on
forward-looking statements, which speak only as of the date made.
PDC undertakes no obligation to update any forward-looking
statements in order to reflect any event or circumstance occurring
after the date of this release or currently unknown facts or
conditions or the occurrence of unanticipated events. All forward
looking statements are qualified in their entirety by this
cautionary statement.
CONTACT: Ron Wirth
Director of Investor Relations
303-860-5830
rwirth@petd.com
Marti Dowling
Investor Relations Manager
303-831-3926
mdowling@petd.com
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