PDC (PETD) Will Sell Permian Basin Assets to Concho (CXO) in $175M Deal
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Petroleum Development Corporation (Nasdaq: PETD) today provided details of a definitive agreement to sell its Permian Basin assets, 2012 capital spending plans and production estimates for 2012.
The Company has signed a definitive agreement to sell its remaining Permian Basin assets to Concho Resources Inc. (NYSE: CXO) for approximately $175 million. The transaction is expected to close in the first quarter of 2012 and is subject to customary purchase price adjustments. The Company also previously closed this quarter on the sale of primarily non-core Permian assets for $13.3 million. Total proceeds from the two transactions are approximately $188 million before tax. The asset sale represents approximately 7.8 million cubic feet equivalent per day of net production, 20% of which is estimated to be natural gas. Proceeds from the sales are expected to be used to retire debt on the Company's revolving credit facility and provide liquidity to fund the Company's 2012 capital budget.
PDC's capital budget for 2012 is expected to be approximately $284 million. The budget includes $198 million of development capital, 85% of which will be invested in the Wattenberg Field of Colorado for an expanded horizontal Niobrara drilling program, refracs and recompletes, and non-operated projects, and $86 million for investment in acquisitions, exploration, leasehold, and miscellaneous expenditures. The capital budget includes a total of 266 drilling, completion and refrac/recompletion projects.
The Company estimates 2012 production to be 53 billion cubic feet equivalent ("Bcfe"). The 2012 production is expected to be approximately 33% oil and NGLs and represents a 21% increase over estimated 2011 production, proforma for current 2011 production guidance of 46.5 Bcfe after deducting production related to the sale of the Permian assets.
The Company has signed a definitive agreement to sell its remaining Permian Basin assets to Concho Resources Inc. (NYSE: CXO) for approximately $175 million. The transaction is expected to close in the first quarter of 2012 and is subject to customary purchase price adjustments. The Company also previously closed this quarter on the sale of primarily non-core Permian assets for $13.3 million. Total proceeds from the two transactions are approximately $188 million before tax. The asset sale represents approximately 7.8 million cubic feet equivalent per day of net production, 20% of which is estimated to be natural gas. Proceeds from the sales are expected to be used to retire debt on the Company's revolving credit facility and provide liquidity to fund the Company's 2012 capital budget.
PDC's capital budget for 2012 is expected to be approximately $284 million. The budget includes $198 million of development capital, 85% of which will be invested in the Wattenberg Field of Colorado for an expanded horizontal Niobrara drilling program, refracs and recompletes, and non-operated projects, and $86 million for investment in acquisitions, exploration, leasehold, and miscellaneous expenditures. The capital budget includes a total of 266 drilling, completion and refrac/recompletion projects.
The Company estimates 2012 production to be 53 billion cubic feet equivalent ("Bcfe"). The 2012 production is expected to be approximately 33% oil and NGLs and represents a 21% increase over estimated 2011 production, proforma for current 2011 production guidance of 46.5 Bcfe after deducting production related to the sale of the Permian assets.
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