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PDC Energy acquires liquid-rich assets for $330.6 mln

Published: 09:56 14 May 2012 EDT

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Petroleum Development Corp (PDC)(NASDAQ:PETD) agreed to buy liquid-rich assets in Wattenberg field from a private seller in a deal valued at $330.6 million.

The acquired assets, which are located in Colorado, currently produce 2,800 barrels of oil equivalent per day (boed) from 700 wells in the Niobrara and Codell formations.

The acquired leasehold is 100 percent held by production and has an average working interest of some 93 percent, with an average net revenue interest of nearly 81 percent, the company said.

Denver, Colorado-based PDC Energy expects the deal to wrap up by June 29, and is subject to customary closing conditions. 

"This acquisition provides substantial upside opportunities and is a very significant step towards completing our transition to a liquid-rich company," PDC chief executive James Trimble said.

"We now have the capability to reach a 50 percent liquids production mix over the next several years," he said.

Its leasehold position is expected to increase to 103,000 acres in the Core Wattenberg, with a combined inventory of 546 liquid-rich horizontal Niobrara drilling locations.

In addition, the company said it estimates 2012 net production to grow to roughly 54.5 billion cubic feet equivalent.

PDC Energy also projected that its 2012 net exit rate will increase to 160 million cubic feet equivalent a day, adding that liquids-only exit rate for the year will likely rise 22 percent.

Currently, the company is focused on developing the liquid-rich Niobrara play in the Wattenberg Field, where liquid content has averaged 70 to 80 percent liquids.

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