PDC Energy Inc. received several joint ownership and development proposals for its Utica Shale position in southeast Ohio from potential joint venture (JV) partners, but they “do not meet PDC’s value expectations,” so the Denver-based company will pursue development in the play independently.

PDC said it believes that developing its 45,000 net acre Utica position on a standalone basis would produce greater long-term value, particularly given the high initial production rates and liquids content from recent well results announced by other exploration and production companies near its acreage.

“We are extremely pleased with our Utica position and believe it is in the best long-term interest of our shareholders to develop our current position without a joint venture partner,” CEO James Trimble said Wednesday. “Results from PDC and the industry continue to reinforce our position that the Utica could be one of the top tier economic shale plays in the U.S. onshore.

“The high liquids mix from initial Utica well results further enhances our corporate strategy to transition toward more liquid-rich assets in our portfolio. We have formulated a Utica development plan and believe we have the financial capacity to execute this plan in 2012 and beyond.”

Late last year PDC agreed to sell its Permian Basin assets to focus on the Wattenberg Field in the Denver-Julesburg (DJ) Basin of Colorado, the Marcellus Shale in West Virginia and the Utica Shale in Ohio (see Shale Daily, Dec. 27, 2011). The plan was to seek a working interest partner in the Utica.

Wells Fargo Securities analyst David Tameron and his team said the decision to proceed without a partner was a negative for the company. The reason no JV deal was closed “could be [a] combination of PDC realizing that it couldn’t ramp the DJ [Basin] next year, and that combined with lack of attractive price, resulted in PDC pulling the package (our best guess),” he said in a note Wednesday.” Regardless, [the] transaction didn’t get done and [the] Street will be disappointed.” How Utica development fits into PDC’s budget next year is a “major concern.”

PDC management said the Utica is exceeding its expectations in several key areas, including initial production rates, liquids mix, the pace of de-risking and the delineation of the gas condensate window of the play, which encompasses a substantial portion of the company’s leasehold position.

“One of the company’s initial criteria for establishing a Utica JV was to accelerate the de-risking of PDC’s leasehold position, which has been substantially achieved by PDC and other operators’ activity in the area,” the company’s management said. “Furthermore, PDC has development flexibility for its estimated 200 horizontal locations given that approximately 50% of its acreage is held by production and the remaining 50% are multi-year primary term leases.”

PDC plans to continue to de-risk and develop its Utica acreage and not materially increase its leasehold. The company this year drilled its first two horizontal wells in Guernsey County, OH, and its first horizontal well, the Onega Commissioners #14-25H, is currently being completed and is anticipated to be flow tested in November. A second horizontal well is expected to be completed about year end and flow tested in early 2013. A third horizontal well is to be spud in Washington County, OH, in the fourth quarter. First sales from the three horizontal wells are anticipated in the second quarter of 2013, PDC said.

The company’s 2012 Utica capital spending program is expected to total about $95 million for drilling, completion and leasing activity, and it anticipates a $50 million capital budget in 2013 to drill, complete and connect four to five horizontal wells in Guernsey, Noble and Washington counties.

Earlier this year PDC Mountaineer, a JV of PDC and Lime Rock Partners V LP, said it would temporarily suspend drilling in the Marcellus Shale “due to the current depressed natural gas price environment (see Shale Daily, March 5).