Attached files
file | filename |
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8-K - FORM 8-K - PDC ENERGY, INC. | pdc8k20091104.htm |
EX-2.2 - EX-2.1 - PDC ENERGY, INC. | ex2_1.htm |
EX-10.2 - EX-10.2 - PDC ENERGY, INC. | ex10_2.htm |
EX-10.1 - EX-10.1 - PDC ENERGY, INC. | ex10_1.htm |
EX-99.2 - EX-99.2 - PDC ENERGY, INC. | ex99_2.htm |
NEWS FROM
Petroleum
Development Corporation
FOR
IMMEDIATE RELEASE
November
1, 2009
Petroleum
Development Corporation Announces an Appalachian Joint Venture with Lime Rock
Partners to Develop the Marcellus Shale Play
Joint
Venture to Significantly Accelerate Marcellus Reserve and Production Growth in
World-Class Play
DENVER, CO, November 1, 2009:
Petroleum Development Corporation (“PDC”, “the Company”) (NASDAQ: PETD) and Lime
Rock Partners (“Lime Rock”), a leading provider of growth capital to energy
companies worldwide, today announced the formation of PDC Mountaineer, LLC, a
joint venture company (“JV”) principally focused in the Marcellus Shale
region.
PDC will
contribute acreage, producing properties, reserves and related gathering assets
valued at approximately $158.5 million. Lime Rock funded $45 million
as a return of capital at closing, and PDC has an option to take a second cash
contribution of $11.5 million by year-end 2010. Subject to agreement
provisions, Lime Rock has an obligation to fund in full by December 31, 2011 to
earn a 50% interest in the joint venture. Lime Rock anticipates it
will satisfy its funding obligation by early-to-mid 2011, at which time all
costs and capital investment in the JV will be shared equally. PDC’s
interest in the joint venture, including; (1) land and drilling expenditures,
(2) future net gas revenues, and (3) future gas reserves, will be reflected in
its financial statements.
Under the
terms of the agreement:
·
|
PDC
will contribute approximately 115,000 net acres in the Appalachia Basin,
of which approximately 55,000 acres are considered to be prospective in
the Marcellus. The acreage
has:
|
o
|
Approximately
12 MMcf per day of current
production
|
o
|
113
Bcfe of total proved reserves as of 12/31/08, primarily attributable to
the shallow Devonian sands
|
o
|
Existing
low-pressure gathering and compression
facilities
|
o
|
Existing
2D and 3D seismic data
|
·
|
PDC
Mountaineer plans to develop and construct a new gathering system for its
Marcellus volumes primarily within its current right of
ways
|
Mr. Dewey
Gerdom has been appointed Chief Executive Officer of the JV. Mr.
Gerdom previously served with the Company as Vice President - Eastern
Operations. PDC has designated approximately ninety of its employees
to directly support the JV, which will be headquartered in Bridgeport, West
Virginia. PDC brings a 40-year track record of operating over 1,900
wells in the basin and a technical team with proven unconventional/tight rock
completion and production expertise.
Mr.
Richard W. McCullough, Chairman and Chief Executive Officer of Petroleum
Development Corporation, said, “We are extremely pleased to partner with Lime
Rock, whose team has a track record of successful value-adding energy
investments. This new strategic JV will accelerate the growth and
visibility of PDC’s Marcellus Shale gas position. The Marcellus Shale
provides the opportunity of strong economic scale and repeatability for long
term growth. Partnering with Lime Rock provides the growth capital
required to increase production, develop low cost reserves, and grow our acreage
position in the Marcellus Shale fairway.”
Will
Franklin, Managing Director of Lime Rock Partners, noted, “For years, Lime Rock
has been looking to partner with an experienced operator in Appalachia and the
Marcellus Shale: a company with deep local roots, a company with a long history
of successfully developing unconventional natural gas, and a company with both a
robust current producing asset and real growth potential in the
Marcellus. When we began discussions with PDC, we realized that it
combines all these rare assets.” Jonathan Farber, Managing Director
and Co-Founder of Lime Rock, added, “We have long followed and admired the
progress of PDC. As we have gotten to know better Dewey and the PDC
Mountaineer team and Rick and the broader PDC team, we are even more confident
that these are the right operators to capture the remaining value in the
venture’s existing assets and maximize its potential in the
Marcellus. We look forward to the next exciting few years as we
attempt to create significant value for our combined investors.”
Mr.
McCullough continued, “We are very pleased Dewey Gerdom is heading up this
JV. He brings 30 years of industry experience to the JV and is highly
respected within both the Company and the industry. This accretive
and strategic transaction solidifies our commitment to the Marcellus Shale and
complements our strong operating position in the Rocky Mountains. The
JV’s development plan includes approximately 500 potential horizontal and
vertical wells on the existing net Marcellus acres. The initial focus will
be to finalize our 2010 operating budget and to gather additional technical
analysis from our first horizontal wells to better refine the potential upside
associated with the JV’s Marcellus acreage.”
PDC has
accelerated its Marcellus exploration efforts during the past year, recently
completing its first 3D seismic shoot and the drilling of seven initial vertical
wells. The JV is planning to drill its initial horizontal well in the
first quarter of 2010.
Scotia
Capital (USA) acted as sole placement agent and, together with Scotia Waterous
(USA), as exclusive financial advisor to Petroleum Development Corporation in
connection with this transaction. Baker Botts represented PDC, and
Fulbright & Jaworski represented Lime Rock in the transaction.
Scheduled Conference
Call
The
Company will host a conference call with investors to discuss the announced
joint venture. The Company invites you to join Richard W. McCullough, Chairman
and Chief Executive Officer, and other officers for a conference call on Monday,
November 2, 2009.
When:
Monday, November 2, 2009, at 1:00 p.m. Eastern Standard Time
How: Log
on to the web site at www.petd.com, or dial-in:
Domestic
(toll free) at 877/407-9124
International
at 201/689-8584
Replay
Numbers:
Domestic
(toll free) at 877/660-6853
International
at 201/612-7415
Account
#: 286, Conference ID #: 336774
A replay
of the call will be available through Tuesday, December 1, 2009.
About Petroleum Development
Corporation
Petroleum
Development Corporation is an independent energy company engaged in the
development, production and marketing of natural gas and oil. Its operations are
focused in the Rocky Mountains with additional operations in the Appalachian
Basin and Michigan. PDC is included in the S&P SmallCap 600 Index and the
Russell 3000 Index
of
Companies.
About Lime Rock
Partners
Established
in 1998, Lime Rock manages $3.8 billion of private capital for investment in the
energy industry through Lime Rock Partners, investors of growth capital in
energy companies worldwide, and Lime Rock Resources, acquirers and operators of
oil and gas properties in the United States. With $3.0 billion
under management, Lime Rock Partners is a creative, value-adding, and long-term
investor of growth capital in exploration and production, energy service, and
oil service technology companies worldwide. From locations in
Aberdeen, Scotland, Dubai, Houston, Texas, and Westport, Connecticut, the Lime
Rock Partners team brings together a global network of relationships, deep
interdisciplinary expertise in finance and energy company operations, and a
strong track record of value creation. For more information, please
visit www.lrpartners.com.
SPECIAL
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 our 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, 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 of estimated oil and natural gas production and reserves,
drilling plans, future cash flows, anticipated liquidity, anticipated capital
expenditures and our 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 release reflect our good faith judgment, such
statements can only be based on facts and factors currently known to
us. 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:
·
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changes
in production volumes, worldwide demand, and commodity prices for oil and
natural gas;
|
·
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the
timing and extent of our success in discovering, acquiring, developing and
producing natural gas and oil
reserves;
|
·
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our
ability to acquire leases, drilling rigs, supplies and services at
reasonable prices;
|
·
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the
availability and cost of capital to
us;
|
·
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risks
incident to the drilling and operation of natural gas and oil
wells;
|
·
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future
production and development costs;
|
·
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the
availability of sufficient pipeline and other transportation facilities to
carry our production and the impact of these facilities on
price;
|
·
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the
effect of existing and future laws, governmental regulations and the
political and economic climate of the United States of
America;
|
·
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the
effect of natural gas and oil derivatives
activities;
|
·
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conditions
in the capital markets; and
|
·
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losses
possible from pending or future
litigation.
|
Further,
we urge you to carefully review and consider the cautionary statements made in
this release, our annual report on Form 10-K for the year ended December 31,
2008, and our other filings with the Securities and Exchange Commission (“SEC”)
and public disclosures. We caution you not to place undue reliance on
forward-looking statements, which speak only as of the date of this
report. We undertake
no obligation to update any forward-looking statements in order to reflect any
event or circumstance occurring after the date of this report or currently
unknown facts or conditions or the occurrence of unanticipated
events.
CONTACT: Marti Dowling,
Manager – Investor Relations, 303/831-3926, ir@petd.com
###
1775
Sherman Street • Suite 3000 • Denver, Colorado • 80203-4341 • Phone:
303.860.5800
~ www.petd.com ~
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