Petroleum Development Adds to Natural Gas Commodity Options
September 23 2005 - 5:08PM
PR Newswire (US)
BRIDGEPORT, W.Va., Sept. 23 /PRNewswire-FirstCall/ -- Petroleum
Development Corporation (NASDAQ:PETDE) today announced that the
Company has added to previously announced natural gas and oil
commodities options positions to protect against possible price
instability in future months. The Company purchased natural gas put
options (floors) to provide downside protection. The new options
are intended to supplement floors previously set at lower levels.
The Company also set floors at $9.00 per million British thermal
unit (Mmbtu) at a cost of $.395 per Mmbtu for the period from
November 2005 through March 2006 for approximately two thirds of
current production from its Piceance Basin. These floors are based
upon Colorado Interstate Gas Index (CIG). The Company set floors at
$10.50 per Mmbtu at a cost of $.475 per Mmbtu for the period from
November 2005 through March 2006 for approximately two thirds of
current production from its Appalachian and Michigan Basins. These
floors are Nymex based. The Company set floors at $10.00 per Mmbtu
at a cost of $.575 per Mmbtu for the period from November 2005
through March 2006 for approximately two thirds of current
production from its NECO (Northeastern Colorado properties). These
floors are based upon Panhandle Eastern Index. By placing these
floors, the Company has insured a higher level of price protection
on most of its gas in the event that natural gas prices retreat
from the current record level this winter, while maintaining upside
potential on over two thirds of its gas. The accompanying tables
summarize all of the Company's current hedging positions. Floors
Ceilings Monthly Monthly Quantity Contract Quantity Contract Mmbtu
Price Mmbtu Price Month Set Month Colorado Interstate Gas (CIG)
Based Hedges (Piceance Basin) Feb-04 Apr 2005 - Oct 2005 33,000
$3.10 16,000 $4.43 Mar-05 Apr 2005 - Oct 2005 38,000 $4.75 19,000
$8.12 Jan-05 Nov 2005 - Mar 2006 60,000 $4.50 30,000 $7.15 Jul-05
Nov 2005 - Mar 2006 27,500 $6.50 13,750 $8.27 Sep-05 Nov 2005 - Mar
2006 78,700 $9.00 Mar-05 Apr 2006 - Oct 2006 42,000 $4.50 21,000
$7.25 Jul-05 Apr 2006 - Oct 2006 27,500 $5.50 13,750 $7.63 Jul-05
Nov 2006 - Mar 2007 27,500 $6.00 13,750 $8.40 NYMEX Based Hedges -
(Appalachian and Michigan Basins) Feb-04 Apr 2005 - Oct 2005
122,000 $4.28 61,000 $5.00 Mar-05 Apr 2005 - Oct 2005 39,000 $5.75
19,500 $8.37 Jan-05 Nov 2005 - Mar 2006 156,000 $5.00 78,000 $8.50
Sep-05 Nov 2005 - Mar 2006 156,000 $10.50 Mar-05 Apr 2006 - Oct
2006 78,000 $5.50 39,000 $7.40 Jul-05 Apr 2006 - Oct 2006 61,000
$6.25 30,000 $8.98 Jul-05 Nov 2006 - Mar 2007 68,000 $7.00 34,000
$9.27 NYMEX Based Hedges (NECO) Feb-04 Apr 2005 - Oct 2005 150,000
$4.26 75,000 $5.00 Jan-05 Nov 2005 - Mar 2006 150,000 $5.00 75,000
$8.45 Panhandle Based Hedges (NECO) Sep-05 Nov 2005 - Mar 2006
100,000 $10.00 Mar-05 Apr 2006 - Oct 2006 150,000 $5.00 75,000
$8.62 Jul-05 Nov 2006 - Mar 2007 150,000 $6.50 75,000 $8.56 Oil -
NYMEX Based (Wattenberg) Bbls Bbls Aug-04 Jan 2005 - Dec 2005
15,000 $32.30 7,500 $40.00 Petroleum Development Corporation
(http://www.petd.com/) is an independent energy company engaged in
the development, production and marketing of natural gas. The
Company operations are focused in the Rocky Mountains with
additional operations in the Appalachian Basin and Michigan. During
the third quarter of 2004, the Company was added to the S&P
SmallCap 600 Index. Additionally, PDC was added to the Russell 3000
Index of companies in 2003. PDC was named on the FSB: Fortune Small
Business Magazine list of America's 100 Fastest-Growing Small
Companies in 2001 and 2002. Certain matters discussed within this
press release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Although PDC
believes the expectations reflected in such forward- looking
statements are based on reasonable assumptions, it can give no
assurance that its expectations will be attained. Factors that
could cause actual results to differ materially from expectations
include financial performance, oil and gas prices, drilling program
results, drilling results, regulatory changes, changes in local or
national economic conditions and other risks detailed from time to
time in the Company's reports filed with the SEC, including
quarterly reports on Form 10-Q, reports on Form 8-K and annual
reports on Form 10-K. DATASOURCE: Petroleum Development Corporation
CONTACT: Steven R. Williams of Petroleum Development Corporation,
+1-304-842-3597 Web site: http://www.petd.com/
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