PDC Energy Inc. completed the sale of its noncore Colorado natural gas assets Tuesday, with the sales proceeds earmarked to accelerate development of its liquid-rich horizontal drilling programs in the state’s Wattenberg Field and Ohio’s Utica Shale.

The gas assets were sold for $185 million to privately owned Caerus Oil and Gas LLC, a Denver-based company, in the Greater Green River, San Juan and Denver Julesburg basins, as well as the Central Kansas Uplift, with an effective date of Jan. 1, 2013. The deal was first announced in February (see Shale Daily, Feb. 11).

The assets sold are weighted 99% to natural gas and include an estimated 85 Bcfe of net proved developed producing reserves as of Dec. 31, 2012, and they produced about 40 MMcf/d in the first quarter of 2013, PDC said.

“We…plan to redeploy the capital to develop our high-return, liquid-rich Wattenberg and Utica Shale horizontal drilling inventory,” said PDC CEO James Trimble. “With the closing, we have completed another major milestone in our transition toward a more liquid-rich asset base. We expect our 2013 production mix to be approximately 54% liquids, which is a significant change from 35% liquids in 2012. We expect to largely fund our 2013 capital program with the proceeds from the sale and internally generated cash flow.”

Citing drilling and acquisitions it made last year in the Wattenberg field north of Denver, PDC in the first quarter reported a 19% jump in production, compared with the same period last year, and record output of more than 10,000 b/d of liquids (see Shale Daily, May 6). Liquids now represent 54% of PDC’s overall production, driven mostly by a 16% year-over-year increase in the Wattenberg (see Shale Daily, May 15, 2012). The independent sees opportunities for up to 2,000 horizontal projects in the Wattenberg, 600 in the Marcellus and another 200 in the Utica.

PDC last year paid $330.6 million to acquire close to 35,000 net acres in a liquids-rich area of the Niobrara and Codell formations (see Shale Daily, May 15, 2012). The assets were almost entirely in the core area of the Wattenberg Field, straddling Colorado’s Adams and Weld counties.

In March PDC increased its capital expenditures for 2013 from $365 million to $443 million and said it planned to allocate 85% of it toward liquids-rich projects in the Utica and in the Wattenberg Field (see Shale Daily, March 20). The company plans to maintain a one-rig drilling program in the Utica throughout 2013 and was planning to deploy a third rig in the Wattenberg in May. PDC plans to drill 11 horizontal wells in the Utica and 69 in the Niobrara and Codell formations this year.

Caerus has ties to oil and natural gas investors in Oaktree Capital Management and Anschutz Investment Co.