PDC Energy Inc., Denver, has agreed to acquire two privately held units managed by energy-focused privately equity firm Kimmeridge Energy Management Co. LLC, including 57,000 net acres in Reeves and Culberson counties in Texas, with average working interest of 93%, for $1.5 billion.
Current net production from the acreage is 7,000 boe/d from 21 horizontal wells, with two additional wells in the completion and flowback phase. Of the total output, 42% is oil and 65% is liquids.
The total net acreage, of which 41,000 acres are in Reeves County and 16,000 acres are in Culberson County, features more than 700 gross estimated horizontal drilling locations targeting the Wolfcamp A, B, and C zones with upside potential through downspacing and additional intervals, the firm says.
Based on a combined total of 4-12 wells/section, preliminary estimated net reserve potential is 530 million boe.
Expected to close in the fourth quarter, the deal includes scalable owned and operated midstream infrastructure, including gas gathering systems, pipelines, right-of-ways, and five salt water disposal wells.
During the remainder of the year, PDC plans to spud nine horizontal wells, seven of which have 1.5- or 2-mile laterals, and expand certain midstream infrastructure for expected total capital outlay of $55-65 million. The firm also is finishing completion operations on two horizontal wells and plans to operate two drilling rigs by yearend.
“Adding this Delaware position to our Core Wattenberg acreage gives us more than 1 billion net boe of liquid-rich reserve potential in two of the top-tier US onshore basins,” commented Lance Lauck, executive vice-president, corporate development and strategy.
PDC in June agreed to a Wattenberg acreage swap with Noble Energy Inc. as the firms sought to consolidate their positions in the Colorado natural gas and condensate field (OGJ Online, June 16, 2016).