PDC Energy follows a simple but effective business strategy: grow reserves and production while increasing margins and cash flow. The Company focuses on low-risk development of oil and natural gas reserves from shales and tight reservoir rocks, combined with exploratory drilling and acquiring properties with significant development potential.
PDC is currently focused on development of the liquid-rich Niobrara play in the Wattenberg Field, where liquid content in new horizontal wells has averaged 70%-80% liquids. Additionally, the Company is building an acreage position in the liquid-rich Utica Shale and is pursuing a JV partner in order to accelerate the development of the Utica Shale play.
PDC Energy is a cost-efficient producer with all-in Finding and Development (“F&D”) costs of $2.32 in 2011 and development F&D of $1.93. Annual production from continuing operations for 2011 was 45 Bcfe, and proved reserves at year-end 2011 totaled 1,015 Bcfe. During 2011 the Company drilled 24 gross horizontal wells, 171 gross vertical wells, and executed 177.6 net refracs/recompletes.
PDC Energy is committed to maintaining a relatively conservative balance sheet as part of its fiscal strategy. PDC utilizes an active hedging program for oil and natural gas to reduce the effects of variable commodity prices and lock in its capital expenditure program. The Company also markets a portion of its natural gas and oil through a wholly owned subsidiary, Riley Natural Gas (“RNG”) as part of its risk management strategy. With RNG managing natural gas and oil marketing, PDC maintains better control over sales and derivative activities.