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PDC Energy Announces 2014 Capital Budget of $647 Million and 2014 Production Guidance of 9.5 million BOE to 10 million BOE or Approximately 34% Year-Over-Year Growth; Solid Production Results From Wattenberg Downspacing Test and Ongoing Utica Development

Tuesday, December 10, 2013

PDC Energy Announces 2014 Capital Budget of $647 Million and 2014 Production Guidance of 9.5 million BOE to 10 million BOE or Approximately 34% Year-Over-Year Growth; Solid Production Results From Wattenberg Downspacing Test and Ongoing Utica Development

14:34 EST Tuesday, December 10, 2013

DENVER, Dec. 10, 2013 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today announced its capital budget and production estimates for 2014.

2014 Capital Budget and Production Guidance

PDC's capital budget for 2014 is approximately $647 million, including $576 million of development capital and $71 million for leasehold acquisitions, exploration and other expenditures. The 2014 capital budget is targeting organic growth within PDC's inventory of high-return, liquid-rich projects in the core Wattenberg Field and Utica Shale.

PDC estimates net production volumes for 2014 will average between 9.5 million and 10 million barrels of oil equivalent ("Boe") and anticipates that its crude oil and natural gas liquids ("NGLs") will increase to approximately 60%. Production guidance includes a reduction in dry gas volumes in 2014 due to the anticipated closing of the sale of its shallow Upper Devonian assets and the suspension of drilling in its Marcellus Shale assets. The Company estimates its 2014 production exit rate to be approximately 33,000 Boe/d.

2014 Wattenberg Field Capital Overview

The Company plans to invest a total of $469 million in the Wattenberg Field in Colorado, beginning 2014 with four horizontal drilling rigs and plans to add a fifth operated horizontal drilling rig in the second quarter of 2014. The Wattenberg budget for 2014 includes spudding 115 gross operated horizontal wells, with 59 horizontal Codell wells and 56 horizontal Niobrara wells. These drilling plans include 19 wells with extended length lateral completions of approximately 7,000'. The Company also plans to reinitiate its vertical well refrac program.

Approximately $100 million of the total Wattenberg capital budget is allocated for non-operated projects including participation in a 26-well per section downspacing test in the Niobrara formation in the northeastern portion of the core Wattenberg Field. Results from the test will target the Niobrara B and Niobrara C benches and could further expand the Company's 3P resource potential in the Field.

2014 Utica Shale Capital Overview

Approximately $162 million is expected to be invested in the Utica Shale in southeast Ohio to spud 18 horizontal wells, including 8 wells in the Company's northern acreage and 10 wells in its southern acreage. A second drilling rig is expected to be deployed in the second half of 2014. The Utica capital budget includes approximately $30 million to acquire additional contiguous leasehold.

2014 PDC Mountaineer JV ("PDCM") Capital Overview

PDC has budgeted approximately $16 million for its 50 percent share of PDCM in the Marcellus Shale to finalize drilling and completion operations on the remaining four horizontal wells and for midstream infrastructure. PDCM recently elected to suspend 2014 drilling in the Marcellus Shale play due to the natural gas price environment.

Operations Update – Wattenberg Field

The remaining eight wells on the Waste Management Section were brought online by November 12, 2013. The Waste Management Section is the Company's 16 horizontal wells per section test. The six Codell wells are tracking above the Company's Codell type curve with an average peak 24-hour rate of 500 Boe/d per well and the ten Niobrara wells completed in the B and C Benches are performing solidly between the Company's Niobrara type curves for the outer and middle core areas, with an average peak 24-hour rate of 560 Boe/d per well. To date, the peak, one-day production rate for the entire 16-well section is approximately 7,600 Boe/d with 88% crude oil. In addition to the Waste Management wells, the Company expects to bring approximately 15 wells online by the end of fourth quarter of 2013 for a strong exit rate from the Field.

Operations Update – Utica Shale

The Company recently turned its eighth, ninth and tenth Utica Shale horizontal wells to sales. One additional well is expected to be turned to sales before year-end 2013. The Company expects gross production from its 11 wells by the end of December 2013 to be approximately 5,200 Boe/d which assumes full ethane recovery with approximately 70% liquids. To optimize ultimate recoveries (EURs) for wells located in the retrograde condensate window, the Company plans to continue maintaining high reservoir pressures by restricting flow rates. Well performance has been very strong on the relatively small chokes with significant casing pressures supporting greater long-term production rates and higher EURs.

The Garvin 1H, the Company's first Utica Shale well in Washington County, Ohio, continues to produce on a restricted choke. Gross production, after approximately thirty days of sales, averaged slightly over 100 barrels of condensate per day and nearly 4 million cubic feet per day of high-BTU gas. The Company is actively drilling two offset wells on the Garvin pad which are expected to be completed in early 2014.

The Neill 1H well, located in northwest Washington County, with a 6,000' lateral and 33 frac stages, has been on flowback for over 30 days and continues to recover condensate, high-BTU natural gas and frac load water. The well is exhibiting different frac load recovery characteristics than prior Utica wells. To date, during the cleanup, 24-hour peak hydrocarbon recovery was approximately 327 Boe/d assuming full ethane recovery. The Company expects production to improve as the frac load is recovered.

Operations Update – Marcellus Shale

At its O.E.S. pad in northeast Taylor County, West Virginia, PDCM recently turned all three wells to sales with a gross combined rate of approximately 18 million cubic feet per day of natural gas. The O.E.S. pad helps de-risk a good portion of PDCM's acreage block in this area. PDCM plans to finish drilling four wells at its Armstrong/Reynolds pad in southwestern Taylor County by early 2014 and expects to have the wells turned to sales early in the second quarter of 2014 following completion operations.

CEO Comments

James Trimble, President and CEO, stated, "We expect strong production growth in the fourth quarter 2013 from our Wattenberg, Utica and Marcellus operations. The fourth rig recently arrived in the Wattenberg Field and we anticipate meaningful production growth from both the Niobrara and Codell formations in 2014. We are excited about participating in the 26-well per section test in Wattenberg that could add significantly to our liquid-rich 3P inventory. Production from this test is expected to begin in the fourth quarter of 2014. In the Utica, we are extremely pleased with early results which support ongoing development in both our northern and southern Utica acreage positions. Our 60% liquids mix forecast for total company production in 2014 further demonstrates our transition from a natural gas focused company to a liquids focused one."

Upcoming Industry Conference Participation

PDC management is currently scheduled to present at the Wells Fargo Conference in New York, New York on Wednesday, December 11, 2013, at 1:45pm ET, and at the Capital One SouthCoast 8th Annual Energy Conference in New Orleans, Louisiana on Friday, December 13, 2013, at 9:00am CT. Please see PDC's website at www.pdce.com for full details. The related slide presentations are expected to be available on the Company's website immediately prior to the events.

About PDC Energy, Inc.

PDC Energy is a domestic independent energy company engaged in the exploration, development and production of crude oil, NGLs and natural gas. Its operations are focused primarily in the liquid-rich Wattenberg Field of Colorado, including the horizontal Niobrara and Codell plays, the Utica Shale in Ohio and the Marcellus Shale in West Virginia. PDC is included in the S&P SmallCap 600 Index and the Russell 2000 Index of Companies.

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, results of operations and prospects. All statements other than statements of historical facts included in and incorporated by reference into this release are forward-looking statements. Words such as expects, forecast, guidance, 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 future production, including future production from the Garvin well and wells included in the Wattenberg Field downspacing project, expected additional midstream infrastructure, downspacing and other drilling opportunities, future capital expenditures, including the anticipated closing of Upper Devonian asset sale, the timing of various drilling projects, expected timing of the fifth rig in the Wattenberg and expected timing of the second rig in the Utica, 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 report 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 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:

  • changes in production volumes, demand and commodity prices for natural gas, oil and NGLs;
  • the availability of sufficient pipeline, gathering and other transportation facilities and related infrastructure to process and transport PDC's production, particularly in the Wattenberg Field and Utica Shale; the impact of these facilities and infrastructure on price and possible impediments to anticipated increases in midstream capacity;
  • changes in estimates of proved reserves;
  • declines in the values of PDC's natural gas and oil properties resulting in impairments;
  • 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 and services at reasonable prices;
  • reductions in the borrowing base under the Company's credit facility or other adverse changes to the Company's liquidity;
  • risks incident to the drilling and operation of natural gas and oil wells;
  • future production and development costs;
  • the effect of existing and future laws, governmental regulations and the political and economic climate of the United States of America;
  • changes in environmental laws and the regulations and enforcement related to those laws and the timely receipt of permits under those laws;
  • the identification of and severity of environmental events and governmental responses to the events;
  • the effect of natural gas and oil derivative activities;
  • potential obstacles to completing proposed transactions in a timely manner or at all, and purchase price or other adjustments relating to those transactions that may be unfavorable to PDC;
  • conditions in the capital markets; and
  • losses possible from pending or future litigation.

Further, PDC urges you to carefully review and consider the cautionary statements made in this press release, the Item 1-A Risk Factors in PDC's Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Securities and Exchange Commission ("SEC") on February 27, 2013, 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 hereof. 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. Estimates of non-proved reserves are subject to significantly greater risk of not being produced than proved reserves. Initial and test results from a well are not necessarily indicative of the well's long-term performance.

CONTACT: Michael Edwards
Senior Director Investor Relations
303-860-5820
michael.edwards@pdce.com
Marti Dowling
Manager Investor Relations
303-831-3926
marti.dowling@pdce.com

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