PDC Energy snaps up property in Texas’ Delaware Basin
Aug 23 (Reuters) – Oil and gas producer PDC Energy Inc said it would buy two privately held companies for about $1.5 billion to add acreage in the Delaware Basin in Texas.
Both the privately held companies are managed by Kimmeridge Energy Management Co.
The deal includes about 57,000 net acres, with 7,000 barrels of oil equivalent per day (boe/d) of net production.
In a press release, President and CEO Bart Brookman said, “Through a methodical approach, we were able to execute our stated acquisition strategy and add an extensive inventory of highly-economic drilling locations that complement our already strong portfolio.”
The company says for the rest of 2016, PDC plans to spud approximately nine horizontal wells; seven of the wells have 1.5 or 2 mile laterals. PDC is also looking to expand some midstream infrastructure for an expected total capital outlay of approximately $55 to $65 million.
As well, the company is finishing completion operations on two horizontal wells and plans to operate two drilling rigs by year-end 2016.
“Adding this Delaware position to our Core Wattenberg acreage gives us more than one billion net Boe of liquid-rich reserve potential in two of the top-tier U.S. onshore basins.”, said Lance Lauck, Executive VP Corporate Development and Strategy at PDC.
PDC Energy said the transaction will be financed with $915 million of cash and about 9.4 million shares of its common stock, valued at about $590 million.
The Denver-based company said it intends to fund the cash portion of the acquisition through potential equity and debt financings prior to closing.
J.P. Morgan served as the financial adviser to PDC, while Davis Graham & Stubbs LLP served as legal counsel to PDC.
Evercore served as financial adviser and Sidley Austin LLP served as legal counsel to both the private companies.
(Reporting by Vishaka George in Bengaluru; Editing by Shounak Dasgupta)