DENVER, March 11, 2020 (GLOBE NEWSWIRE) -- PDC Energy, Inc. (“PDC” or the “Company”) (Nasdaq: PDCE) announced today an operational update and changes to its 2020 guidance and 2021 outlook.

The Company expects to reduce its full-year capital investments by 20 to 25 percent compared to its original guidance range of $1.0 to $1.1 billion and projects free cash flow⁽¹⁾ in excess of $150 million for the year. Production is now expected to average similar levels as pro forma 2019 volumes of approximately 200,000 barrels of oil equivalent per day, while oil production is expected to average approximately 73,000 barrels per day.  Both total production and oil production estimates reflect the mid-January closing date of the Company’s merger with SRC Energy. 

The Company will continue to monitor the near and long-term commodity price environment and has short-term contracts with further flexibility to adjust its development plan should it deem necessary.  Given the current conditions, PDC expects to slow its pace of previously planned share repurchases while prioritizing its financial strength and liquidity. Additionally, the Company continues to scrutinize its cost structure with a goal of maintaining its peer-leading metrics. PDC plans to provide a detailed update to its 2020 guidance in the coming weeks.

Operating Plan Changes:

• Upon completion of the current pad, the Company plans to release its Delaware Basin completion crew for the remainder of 2020, deferring ten to 15 previously planned wells into 2021.
  
  
• The Company plans to operate one drilling rig in the Delaware Basin for the remainder of 2020, opting not to deploy a second drilling rig in the second half of 2020, as originally planned.
  
  
• In the Wattenberg Field, PDC plans to reduce its activity during the second quarter of 2020 from three drilling rigs and two completion crews to two drilling rigs and one completion crew.

Consistent with current strip pricing, PDC’s updated operating plan considers a WTI oil price of $35 per barrel for the remainder of 2020 and approximately $40 per barrel in 2021.  Similarly, it assumes NYMEX natural gas prices of approximately $2 per Mcf for the remainder of 2020 and $2.40 per Mcf in 2021 with NGL realizations between $7 and $9 per barrel in both years.  The Company has swaps and collars in place for nearly 60 percent of its updated projected 2020 oil production at a weighted-average floor price of approximately $58 per barrel.

President and CEO Bart Brookman commented, “We have taken immediate action in response to the current and expected price weakness to prioritize our balance sheet and liquidity.  We are well-prepared for this scenario as the resilience and strength of our assets are on full display as we project to generate free cash flow while maintaining our production base.  Meanwhile, our ability to return capital to shareholders through both debt retirement and opportunistically buying back stock in this environment is truly differentiating. I’m extremely proud of our team for demonstrating the hard work, commitment and flexibility needed to thrive in this volatile market.”

PDC’s updated 2021 outlook assumes maintaining a two rig, one completion crew pace in Wattenberg while operating one rig and a part-time completion crew in the Delaware Basin.  Utilizing the price assumptions outlined above would result in full-year capital investments similar to the updated 2020 plan and free cash flow in excess of $200 million.  Production and oil production for 2021 are expected to increase modestly on a daily basis compared to the updated 2020 plan.

About PDC Energy, Inc.

PDC Energy, Inc. is a domestic independent exploration and production company that acquires, produces, develops, and explores for crude oil, natural gas, and NGLs, with operations in the Wattenberg Field in Colorado and in the Delaware Basin in West Texas. Its operations are focused on the liquid-rich horizontal Niobrara and Codell plays in the Wattenberg Field and the liquid-rich Wolfcamp zones in the Delaware Basin.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 ("Securities Act") and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act") regarding our business plans, outlook, financial condition and other prospects. All statements other than statements of historical fact included in this release are "forward-looking statements." Words such as expect, anticipate, intend, plan, believe, seek, estimate, schedule and similar expressions or variations of such words are intended to identify forward-looking statements herein. Forward-looking statements include, among other things, statements regarding future: production, costs and cash flows; commodity prices and differentials; capital expenditures and projects; cash flows from operations relative to future capital investments; our stock repurchase program, which may be modified or discontinued at any time.

The above statements are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this report reflect our good faith judgment, such statements can only be based on facts and factors currently known to us. Forward-looking statements are always subject to risks and uncertainties, and become subject to greater levels of risk and uncertainty as they address matters further into the future. In this release and accompanying materials, we may use the term “outlook” or similar terms or expressions, or indicate that we have “modeled” certain future scenarios. We typically use these terms to indicate our current thoughts on possible outcomes relating to our business or the industry in periods beyond the current fiscal year. Because such statements relate to events or conditions further in the future, they are subject to increased levels of uncertainty.

We urge you to carefully review and consider the cautionary statements and disclosures, specifically those under the heading “Risk Factors,” made in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 27, 2020, and our other filings with the SEC for further information on risks and uncertainties that could affect our business, financial condition, results of operations and prospects, which are incorporated by this reference as though fully set forth herein. We caution you not to place undue reliance on the forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to update any forward-looking statements in order to reflect any event or circumstance occurring after the date of this press release or currently unknown facts or conditions or the occurrence of unanticipated events. All forward-looking statements are qualified in their entirety by this cautionary statement.

(1) As used in this news release, free cash flow, a non-U.S. GAAP financial measure, means net cash from operating activities, excluding changes in working capital, less oil and gas capital investments. We are unable to present a reconciliation of forward-looking free cash flow because components of the calculation, including fluctuations in working capital accounts, are inherently unpredictable. Moreover, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. We believe that forward-looking estimates of free cash flow are important to investors because they assist in the analysis of our ability to generate cash from our operations in excess of capital investments in crude oil and natural gas properties.

Contacts:         Michael Edwards
                        Senior Director Investor Relations
                        303-860-5820
                        michael.edwards@pdce.com

                        Kyle Sourk
                        Manager Investor Relations
                        303-318-6150
                        kyle.sourk@pdce.com

Source: PDC Energy, Inc.