PDC Energy Inc. has revised down its full-year 2021 oil production guidance, citing “tighter than optimal well spacing” in its Permian Basin leasehold.

Oil production is now expected to average 60,000-63,000 b/d, versus previous guidance of 64,000-66,000 b/d, the Denver-based independent said in a recent update.

PDC operates primarily in the Wattenberg field in Colorado’s Denver-Julesburg (DJ) Basin, and in the Permian’s Delaware sub-basin.

Full-year and fourth-quarter production both are expected to be near the bottom of the previous guidance of 190,000-195,000 boe/d. That would be about 10% higher than 4Q2020 output.

PDC this year turned in-line 18 wells in the Delaware that were drilled in 2019 and the first half of 2020 at average spacing of 14-16 wells per undeveloped section equivalent.

This year’s Delaware drilling program reflects “more relaxed spacing assumptions” of about eight wells per undeveloped section equivalent, “which should equate to increased productivity per well and higher per-section net present value,” management said.

“The majority of the company’s anticipated 2022 turn-in-lines reflect the more relaxed spacing design as they were drilled in 2021.

“The company is currently evaluating and testing additional early-stage artificial lift methods as well as the potential impact to its basin-wide inventory as a result of more relaxed spacing, though it is expected to decrease compared to year-end 2020.”

Oil and gas capital investments are expected to total $550-600 million for the year, unchanged from previous guidance, management said.

PDC said its multi-year outlook, including projected cumulative post-tax FCF of about $2.5 billion, debt reduction of $1 billion, shareholder returns of more than $1 billion and capital investments of $600-650 million in 2022 and 2023, remains unchanged.

The company also said it is targeting a 50% reduction in methane emissions intensity by 2025 compared to 2020 levels and a 70% reduction by 2030. In addition, PDC said it is working to achieve zero routine flaring of natural gas in the Delaware by 2025.

PDC expects to generate adjusted free cash flow (FCF) of more than $500 million for the second half of 2021, assuming estimated 3Q2021 price realizations of $70/bbl West Texas Intermediate oil, $5/Mcf New York Mercantile Exchange natural gas and $30/bbl natural gas liquids.