Denver-based independent PDC Energy Inc. has updated its 2022 production and spending guidance to the high side, citing year-to-date performance and the timing of closing its acquisition of Great Western Petroleum LLC.
PDC snapped up Great Western, a privately held operator focused on Colorado's Wattenberg field, in a $1.3 billion cash-and-stock deal announced in February. The transaction closed earlier this month.
PDC expects capital investments to total $950 million to $1 billion this year, up from a previous forecast of $900 million to $1 billion. Production is expected to range from 235,000-250,000 boe/d (78,000-83,000 b/d oil), versus prior guidance of 225,000-240,000 boe/d.
“In the face of significant inflation, our operating teams have done a tremendous job innovating, driving additional efficiencies, and ensuring our capital budget remains at or below $1 billion,” said CEO Bart Brookman. “As we streamline our operations, the Great Western acquisition provides the company with additional scale and high value inventory with increased shareholder returns.”
Management said earlier this month that with the Great Western assets fully integrated, production in the second quarter of 2022 is expected to be 18-23% higher than in the first quarter.
PDC is targeting capital investment of $775-825 million in 2022 at the Wattenberg field, where it plans to run a three-rig program with one full-time and one intermittent completion crew.
Drilling and completion activity will take place mainly on the Summit, Kersey and newly acquired Great Western Range acreage, the firm said.
PDC, which also operates in the Permian Basin, expects to spud and complete a total of 150-175 wells in 2022, management said.
In the Permian’s Delaware sub-basin, capital expenditures are expected to total about $175 million for 16 spuds and 20 completions this year, PDC said.
PDC “continues to be encouraged with its 2022 turn in line (TIL) program as results from its relaxed spacing are outperforming expectations,” management said.
The firm noted that its capital budget also includes non-operated, infrastructure, land, and environmental, social and governance-related projects.
PDC said its Kenosha Oil and Gas Development Plan (OGDP) will go before the Colorado Oil and Gas Conservation Commission (COGCC) for approval on June 8. The firm’s Broe OGDP, meanwhile, has a preliminary hearing date of June 29.
“Combined, these two anticipated approvals will provide the company an additional 100 permits for its 2024 drilling and completion plan,” PDC said. “The company continues to work with the COGCC on comments it received on its Guanella Comprehensive Area Plan.
“The company intends to address and submit updated plans through June, which could put it on track for completeness determination in the third quarter.”
