PDC Energy has agreed to acquire two privately held companies with holdings in Texas’ Permian Basin managed by Kimmeridge Energy Management Company for approximately US$1.5 billion.
The two companies have a combined 57,000 acres in Reeves and Culberson Counties in the Permian. Current net production is approximately 7,000 barrels of oil equivalent per day from 21 horizontal wells, with two additional wells in the completion and flowback phase
President and chief executive Officer, Bart Brookman commented: "This is truly a remarkable opportunity for PDC to add an extensive inventory of highly-economic drilling locations that complement our already strong portfolio. I am extremely thrilled with the work of our team and am very excited to begin applying our operating expertise to this premier Delaware Basin acreage position."
The Denver-based firm is going to pay $915 million in cash and give about 9.4 million of its shares to Kimmeridge Energy Management. The deal is expected to close in the fourth quarter of 2016.
The company stated that for the remainder of the year, it plans to spud approximately nine horizontal wells and expand certain midstream infrastructure for an expected total capital outlay of approximately $55 to $65 million.
Lance Lauck, executive vice president Corporate Development and Strategy, said: "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."