PDC Energy reported that the company has entered into a purchase agreement to buy producing oil and gas properties in the Permian Basin. The company said that the deal is with an unidentified private oil and gas company.
PDC Energy will pay $40 million for 5,760 net acres that has exposure to the Wolfberry oil trend in West Texas. The properties have current production of 330 barrels of oil equivalent (BOE) per day from six existing wells.
PDC Energy reported that the acreage block has approximately 122 future drilling locations into the Wolfberry formation assuming 40 acre spacing. The Wolfberry formation produces mostly oil and natural gas with a high liquids content. PDC Energy said that the company would start drilling its first well on the new acreage during the fourth quarter of 2010.
PDC Energy estimates that the acquisition will add 10 million BOE of proved and probable reserves to the company’s reserve base. The company will fund the acquisition with its existing credit line.
PDC Energy expects the deal to close on November 19, 2010, and be effective as of November 1, 2010.
For more information on the company, go to www.petd.com
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