PETROL DEV 
By DENVER, Jan. 26, 2012 (GLOBE NEWSWIRE) -- Petroleum Development Corporation (dba PDC Energy) ("PDC" or the "Company") (Nasdaq:PETD) today reported 2011 key operating results including production and year-end reserves, and provided 2012 capital budget details and production estimates.
2011 Reserves
The Company's independent reserve engineers completed
their estimate of PDC's year-end 2011 proved reserves in
accordance with SEC guidelines. Total proved reserves as of
December 31, 2011 increased 18% to slightly over one trillion
cubic feet equivalent ("Tcfe"), from 861 billion
cubic feet equivalent ("Bcfe") reported as of
December 31, 2010. Reserve replacement from all sources was
435% of 2011 production. Proved developed (PD) reserves
increased to 46% of total reserves at December 31, 2011
compared to 35% of total reserves at December 31, 2010. The
increase in the proved developed reserve percentage was
attributable to the Company's development drilling
program and the reclassification of refracs and recompletions
in the Wattenberg Field from the proved undeveloped
("PUD") category to the proved developed
non-producing (PDNP) category. PDC's 2011 year-end
proved reserves of over one Tcfe were comprised of
approximately
66% natural gas, 22% crude oil, and 12% natural gas liquids
("NGLs"). The Company's internal estimate of
proved, probable and possible (3P) reserves increased from
1.4 Tcfe at December 31, 2010 to 2.1 Tcfe at December 31,
2011.
The Company's PV-10 value of proved reserves increased
95% to approximately $1.4 billion at December 31, 2011, from
$693 million at December 31, 2010, primarily driven by
reserve additions in the liquid-rich Wattenberg Field,
particularly from the horizontal Niobrara program.
Reserve values in 2011 were calculated utilizing NYMEX
prices(1) of $4.12 per million British Thermal
Units (MMBtu) for natural gas and $96.19 per barrel
("Bbl") for crude oil. The Company's average
realized prices were$3.41/Mcf for natural gas,
$88.94/Bbl for crude oil, and $39.59/Bbl for NGLs, after
adjustments to NYMEX prices for energy content, quality and
basis differentials. Average realized prices in 2010
were$3.54/Mcf for natural gas, $71.95/Bbl for crude oil, and
$34.12/Bbl for NGLs.
(1) Reflects the previous twelve months' first of the
month price average basSedEConpricing parameters.
Beginning balance, at December 31, 2010 86 $ $ 0
Drilling, improved well performance and pricing revisions 15
Acquisitions 4
Divestitures ( Production (4
Ending balance, at December 31, 2011
1,01
$ 1, $ 1
During 2011, PDC added 159 Bcfe of proved reserves through a
combination of drilling, improved well performance and
commodity price changes, which was offset partially by the
assumption of reduced investments in the Piceance Field over
the next five years. In addition, the Company added 48 Bcfe
of proved reserves from its portion of the Seneca Upshur
acquisition by its Appalachian joint venture and partnership
purchases. Proved reserves were decreased by five Bcfe in
2011 for the divestiture of non-core assets.
The following table provides PDC's 2011 total proved
reserves (1P) by major operating area:
Total Proved Reserves (1P)
2010 2011
Wattenberg 30 45
Piceance 41 32
NECO 4 3
Appalachian/Marcellus Shale JV 6 13
Permian 3 6
Other Areas -- Total: 861,01
On December 22, 2011, the Company announced the signing of a definitive agreement to sell its remaining Permian Basin assets for approximately $174 million. The sale is scheduled to close during the first quarter of 2012. The reserve report for December 31, 2011 includes these Permian reserves. The following table outlines the proforma effect of the anticipated sale o Permian assets:
Permian Basin Divestiture SummaryPre-Permian Post-Permian
Asset Sale | Asset Sale | |
Proved reserves (Bcfe) | 1,01 | 95 |
Before tax, PV-10 ($MM) | $ 1, | $ 1, |
Percent proved developed | 46% | 48% |
Percent crude oil / NGLs | 34% | 30% |
Net production exit rate (MMcfe/d at Y-E 2011) | 14 | 13 |
2011 Production and Activity
Total 2011 production, including the Permian Basin, increased
26% from 2010 production to 47.5 Bcfe compared to PDC's
guidance of 46.5 Bcfe. The daily exit rate for net production
onDecember 31, 2011, including the Permian Basin, was 146
million cubic feet equivalent ("MMcfe"), which was
comprised of 62% natural gas, 27% crude oil and 11% NGLs.
The Company drilled 200 gross wells in 2011, compared to 213
gross wells in 2010. The Company's 2011 operating focus
wa primarily in the Wattenberg Field where PDC drilled 17
horizontal Niobrara wells, 80 vertical wells, 190
refrac/recomplete projects, and participated in 49
non-operated drilling projects.
In the core Wattenberg Field, 14 of the Company's
horizontal Niobrara wells were on-line with reportable
production averaging peak 24-hour rates of 600 barrels of oil
equivalent per day ("Boe/d") and 30-day initial
production (IP) rates of 470
Boe/d. Based on these results, the Company has increased its
internal type curve estimate for horizontal Niobrara wells in
the core Wattenberg area to a range of 300 to 500 thousand
barrels of oil equivalent (MBoe). PDC also drilled 23 wells
and recompleted two wells in the Permian Basin, and 17 wells
in the Piceance Basin.
In 2011, the Company's 50-50 joint venture in the
Appalachian Basin ("PDCM") spud ten horizontal
Marcellus wells, completed six horizontal Marcellus wells and
initiated certain midstream projects. The most recent
thre-ewell pad, which came on-line at year-end 2011 and early
2012, was producing at an initial combined rate of
approximately 18 MMcf/d.
2012 Plans
PDC's capital budget for 2012, as previously announced,
has been approved for approximately $284 million, including
$198 million of development capital and $86 million for
acquisitions, leasehold, exploration and other expenditures.
Approximately
85% of the development capital, or $168 million, will be
invested in the Wattenberg Field to drill 27 horizontal
wells, complete approximately 210 refracs/recompletes and
fund $26 million of non-operated drilling projects. The
development capital budget also includes $12 million to
complete nine wells in the Piceance Basin which were drilled
in the first half of 2011. The Company plans to invest up to
$12 million in PDCM for drilling and midstream initiatives.
The balance of PDCM's capital budget will be provided by
the joint venture's cash flow from operations and
borrowings under the joint venture's revolving
credit
facility. Depending on the timing, structure and size of the
Company's consummation of a joint venture in theUtica
Shale, the remaining capital budget of $86 million may be
invested in Utica acreage purchases and development, a second
rig in the liquids-rich horizontal Niobrara play in the
Wattenberg Field, or used to fund the purchase of additional
partnerships.
The Company previously estimated 2012 production will
increase approximately 21% to 53 Bcfe, proforma for the sale
of the
Permian Basin assets. Based on actual net production for 2011
of 47.5 Bcfe, or 45 Bcfe net oPf ermian Basin production
for
2011, PDC estimates net production will increase
approximately 18% in 2012 compared to 2011 production net of
Permian. The 2012 production estimate excludes production
volumes which could be added in the event the Company
operates an
additional rig to drill horizontal Niobrara wells in the
Wattenberg Field or completes additional partnership
purchases in 2012.
James Trimble, President and Chief Executive Officer, stated,
"Our 2011 operating results were very positive and
exceeded our expectations. We realized strong double-digit
increases in both production and reserve volumes from 2010,
and our PV-10
value of proved reserves nearly doubled to approximately $1.4
billion. Reserve replacement was an impressive 435%. In 201
we plan to accelerate our drilling in the liquid-rich
horizontal Niobrara development in the Wattenberg Field and
expect to
further develop and de-risk our PDCM Marcellus Shale
position. We continue to build our acreage position in
theUtica Shale play as we implement our 2012 drilling
program. We look forward to forming a joint venture to
accelerate the development of the Utica Shale play."
Upcoming Conference Presentations
PDC is scheduled to attend the Credit Suisse Energy Summit in Vail, Colorado and host a dinner on February 6, 2012 and present at EnerCom's Oil and Services Conference in San Francisco, California on Tuesday, February 21, 2012. Please see the Company's website at www.petd.comfor full details and webcast information.
PDC Analyst Day
PDC plans to host an analyst day in Boston on Tuesday, March
13, 2012. This event is scheduled to be held at theBoston
Harbor Hotel, 70 Rowes Wharf, Boston, Massachusetts, 02110.
The related slide presentation will be available on the
Company's website immediately prior to the event.
About PDC Energy
PDC Energy is an independent energy company engaged in the
development, production and marketing of natural gas and oil.
Its operations are focused primarily in the Wattenberg Field
oCf olorado, including the horizontal Niobrara, the Marcellus
Shale
development in West Virginia and the Utica Shale in Ohio. PDC
is included in the S&P SmallCap 600 Index and the Russell
3000 Index of Companies.
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933
("Securities Act") and Section 21E of the
Securities Exchange Act of 1934 ("Exchange Act")
regarding PDC's business, financial condition, results
of operations and prospects. All statements other than
statements of historical facts included in and incorporated
by reference into this report are forward-looking statements.
Words such as expects, anticipates, intends, plans, believes,
seeks, estimates and similar expressions or variations of
such words are intended to identify forward-looking
statements herein, which include statements regarding the
Company's future financial and operating results; the
successful closing of the Permian divestiture in the first
quarter; PDC's expected use of proceeds from such
divestiture, PDC's continuing efforts to seek a working
interest partner in the Utica and the timing of finalizing
such plans; PDC's expected 2012 capital budget,including
anticipated liquidity and capital expenditures; 2012 drilling
and operations plans, including plans to accelerate drilling
in the liquid-rich horizontal Niobrara development in the
Wattenberg Field; 2012 estimated natural gas and oil
production and reserves, including expected 2012 production,
anticipated oil and NGLs mix, and approximated increase over
estimated 2011 production; planned investment in our joint
venture, PDCM, and our plan to continue to develop and
de-risk our Marcellus Shale position through PDCM; potential
investment in additional Utica acreage and development; the
potential purchase of additional partnerships; availability
of capital future cash flows; anticipated liquidity,
anticipated capital expenditures 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
press release reflect the Company's good faith judgment,
such statements can only be based on facts and factors
currently known to it. Consequently, forward- looking
statements are inherently subject to risks and uncertainties,
including 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 factors that could
cause actual results to differ materially from the
forward-looking statements include, but are not limited to:
