PDC third to sell Piceance stake
PDC Energy this week announced what is the third significant sale of natural gas assets in northwest Colorado’s Piceance Basin in recent months.
PDC said it is selling its Piceance and other “non-core Colorado holdings” to Denver-based Caerus Oil and Gas LLC for about $200 million, with an anticipated closing date in the second quarter of the year.
In a news release, PDC President and Chief Executive Officer James Trimble said the sale will let it accelerate its high-return drilling in the Wattenberg field in eastern Colorado and the Utica shale in Ohio. Both offer richer payoffs of oil and natural gas liquids such as propane and butane.
Low natural gas prices have resulted in sharply reduced drilling in the Piceance. In December Antero Resources closed on the sale of its Piceance Basin assets to Ursa Resources Group II LLC for $316 million, saying it intended to focus on liquids-rich oil and gas development in the eastern U.S.
At the end of last year, Bill Barrett Corp. closed on the sale of natural gas assets including a partial interest in its holdings south of Silt to Vanguard Natural Resources, LLC, for $329 million. BBC is refocusing its exploration and development on oil rather than natural gas.
Both Vanguard and Ursa voiced hopes of a turnaround in long-term natural gas prices.
Caerus could not be reached for comment Thursday, but says on its website, “We are particularly interested in the acquisition of natural gas assets.”
PDC’s website indicates it has an interest in about 8,000 acres in Garfield County with about 390 locations remaining to be drilled there. The company isn’t currently drilling there.
The assets being sold include natural gas holdings in northeast Colorado and elsewhere in the state. They are 99 percent natural gas and include an estimated 85 billion cubic feet equivalent of proved, developed and producing reserves. They are producing about 42 million cubic feet equivalent of gas per day.
Caerus formed in 2009 and has holdings in the Rockies and Kansas, with current production of 19.2 million cubic feet equivalent per day, its website says. Its president and chief operating officer, Matthew Wurtzbacher, and chief financial officer, Jeter Thomas, previously were involved with Puckett Land Co., a private company engaged in Piceance Basin gas development.
One of its founding sponsors is a subsidiary of Anschutz Investment Co., an affiliate of Philip Anschutz’s Anschutz Corp. Scott Carpenter, president of Anschutz Investment Co., serves on the Caerus board.