PDC Energy, Inc. (“PDC” or the “Company”) (Nasdaq:PDCE) today announced that on December 30, 2016, it closed the acquisition of approximately 4,500 net acres in Reeves and Culberson Counties, Texas, from Fortuna Resources Holdings, LLC, for approximately $118 million in cash, subject to certain post-closing adjustments. PDC’s working interest in the acquired leasehold is 100 percent and PDC expects to operate 100 percent of the properties. The acquired properties are concentrated in the Company’s Central acreage block contiguous with the Company’s acreage from the recently closed acquisition of approximately 57,000 net acres in Reeves and Culberson Counties. Current net production associated with the acquisition is approximately 300 barrels of oil equivalent per day. Also included is a drilled, but uncompleted (“DUC”) horizontal well, and a salt water disposal well.
The Company estimates the acquired acreage contains 75 gross one-mile horizontal drilling locations, based on four wells per section in each of the Wolfcamp A, B and C zones. This estimate is based on the assumptions utilized by the Company in its prior Delaware Basin acquisition. The Company plans to integrate the newly acquired acreage into its development drilling plans for its Central acreage block.
President and Chief Executive Officer Bart Brookman commented, “This bolt-on acquisition is a great example of our strategy to both expand and block up our Core Delaware Basin position. Our net acreage, drilling inventory and estimated reserve potential in the basin are expected to increase by approximately ten percent with this transaction. Additionally, by creating a large, contiguous acreage block, we have the opportunity to focus on longer lateral development while optimizing our operational efficiencies.”
Fortuna Resources Holdings, LLC, is a Permian Basin focused independent oil and natural gas producer sponsored by certain affiliates of Och-Ziff Capital Management Group LLC (NYSE:OZM).