PDC Energy to acquire two US companies for $1.5bn

US-based PDC Energy has signed agreements to acquire two companies managed by Kimmeridge Energy for approximately $1.5bn.

As part of the deal, PDC Energy will acquire about 57,000 net acres in the Core Delaware Basin with about 41,000 net acres in Reeves County and 16,000 net acres in Culberson County.

The transaction also includes about 7,000 barrels of oil equivalent per day of net production, comprising about 42% oil and 65% liquids.

In addition, the company will acquire 700 gross estimated horizontal drilling locations targeting the Wolfcamp A, B and C zones, and midstream infrastructure including gas gathering systems, pipelines, right-of-ways and five salt water disposal wells.

PDC Energy president and CEO Bart Brookman said: "Through a methodical approach, we were able to execute our stated acquisition strategy and add an extensive inventory of highly-economic drilling locations that complement our already strong portfolio.”

PDC Energy proposes to fund the acquisition through potential equity and debt financings before closing.

In the remainder of this year, the company plans to drill about nine horizontal wells, seven of which have 1.5 or two mile laterals.

It is also close to completing operations on two horizontal wells and plans to operate two drilling rigs by the end of the year.

PDC Energy corporate development and strategy executive vice-president Lance Lauck said: "This acquisition is a significant step towards executing our vision of becoming a premier mid-cap E&P company.

“Adding this Delaware position to our Core Wattenberg acreage gives us more than one billion net barrels of oil equivalent of liquid-rich reserve potential in two of the top-tier US onshore basins.”

The transaction is slated for completion in the fourth quarter of this year.