PDC Energy Inc. has agreed to buy 8,300 net acres for $210 million and swap other land in two separate deals to block up its core Denver-Julesburg (DJ) Basin position in Weld County, CO.
The company said it would buy the land and current net production of 2,200 boe/d from Bayswater Exploration & Production LLC to form a consolidated position, to be called the Prairie Area, in the middle and outer core areas of the Wattenberg field, where it focuses on the Niobrara and Codell formations. About 60% of the production being acquired is oil-weighted.
The acquisition is expected to add another 240 gross drilling locations and increase working interests in nearly 60 existing locations, PDC said. Thirty operated drilled but uncompleted wells are also included.
Additionally, PDC agreed to trade 12,100 net acres for 11,700 net acres with an undisclosed operator to block up the inner and middle core areas of the Wattenberg, a new position it is calling the Plains Area. The company said the difference in the acreage packages is primarily because of variances in working and net revenue interests. The swap includes only acreage.
Both deals are expected to close by the end of the year. The areas would be the primary focus of its development efforts in the DJ going forward. The company, which plans to pay for the acquisition with cash and debt, said the deals should help it extend its laterals and provide the company with an oiler asset mix.
The company has increasingly focused on more liquids production in recent years. It entered the Permian Basin last year in a $1.5 billion acquisition of two privately held operators, where it has been focused on the Delaware sub-basin. The company currently holds about 95,000 net acres in the Wattenberg and 60,000 net acres in West Texas.
The company also has more than 60,000 net acres in the Utica Shale of southeast Ohio, which it is actively marketing for sale.