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PDC Energy, Inc. ("PDC" or the
"Company")
PDCE today announced an increase in the Company's capital
budget and estimated net production for 2013. The Company also announced the
signing of an agreement for the provision of midstream services in the Utica
Shale.
PDC's capital budget increased from $365 million to $443 million, 85% of which
is allocated to accelerate development of liquid-rich projects in the
Wattenberg Field and Utica Shale. The Wattenberg Field budget increased $26
million to $280 million to accommodate the projected start-up of a third rig
in May, 2013. For the year, the Company expects to drill a total of 69
horizontal wells in the liquid-rich Niobrara and Codell formations.
The Company also increased its budget for the Utica Shale from $53 million to
$96 million to maintain a one-rig drilling program throughout 2013 and drill a
total of 11 horizontal wells. The Utica budget includes approximately $7
million for leasehold acquisitions. The full-year drilling program was
facilitated by the execution of long-term agreements with a subsidiary of
MarkWest Energy Partners, LP
MWE ("MarkWest") to provide midstream
services, including gas gathering, processing, fractionation, and marketing to
support PDC's Utica operations in Guernsey County in southeast Ohio. PDC
expects MarkWest to begin gathering its Guernsey County gas by the end of the
second quarter of 2013 and marketing its residue gas and natural gas liquids
at the tailgate of the MarkWest processing facilities.
The remaining $9 million increase is related to the Company's joint venture
("PDCM") in the Marcellus Shale to reflect the startup of its 2013 horizontal
drilling program in January rather than March as originally budgeted. PDCM's
capital budget is expected to be funded largely by the joint venture's cash
flow and borrowings under the joint venture's revolving credit facility.
Guidance for 2013 net production, pro forma for the sale of non-core Colorado
assets, has been adjusted to a range of 7.0 to 7.5 million barrels of oil
equivalent (MMboe) as a result of the increase in the capital budget and the
drilling of 13 additional horizontal wells. Net production volumes for 2013
are expected to be comprised of approximately 54% liquids and 46% natural gas.
The benefit of additional production from the accelerated drilling program is
expected to be realized beginning in the fourth quarter of 2013 and into 2014.
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