DENVER-BASED PDC ENERGY JOINING IN ON TEXAS OIL RUSH

Denver-based PDC Energy is joining the rush into Texas’ Delaware Basin, one of the most profitable drilling areas in the country given today’s low oil and gas prices.

PDC has agreed to pay Kimmeridge Energy Management Co. $1.5 billion for two privately held firms operating in Reeves and Culberson counties, in west Texas, according to an announcement Tuesday.

PDC will acquire 57,000 net acres with 21 horizontal wells producing 7,000 barrels of oil equivalent a day. The company said the property being acquired contains 700 additional horizontal drilling locations and 530 million barrels of oil equivalent in net reserves. “Diversifying outside the Rockies is a good thing,” said Bernadette Johnson, a managing partner with Ponderosa Advisors in Denver. “A lot of people are excited about the Delaware Basin.”

PDC in recent years has focused most of its efforts on Weld County’s prolific Wattenberg Field, where it is one of the largest operators, and, to a lesser extent, on the Utica Shale in southeastern Ohio.

PDC will pay $915 million in cash and provide 9.4 million of its shares valued at $590 million in a transaction expected to close in the fourth quarter. Shares of PDC have held up better than many of its competitors, leaving it in a position to take advantage of opportunities as they arise.