PDC Energy Announces Supplementary Update to 2020 Plan Including Reduced Operating Activity and Incremental Cost Saving Initiatives

DENVER, April 14, 2020 (GLOBE NEWSWIRE) -- PDC Energy, Inc. (“PDC” or the “Company”) (Nasdaq: PDCE) announced today a supplemental update to its 2020 operating plan along with changes to its 2020 guidance and 2021 outlook.

In order to preserve its balance sheet strength, liquidity and ability to generate meaningful free cash flow⁽¹⁾, PDC plans to reduce its expected 2020 capital investments to a range of $500 to $600 million.  The updated plan reflects a decrease of nearly 50 percent compared to its original budget of $1.0 to $1.1 billion, and includes estimated service cost savings as well as further reductions to planned drilling and completion activity compared to PDC’s prior update provided on March 11, 2020.  The Company expects to generate more than $100 million of free cash flow in 2020 assuming $25 per barrel WTI crude oil, $2 per MMBtu NYMEX natural gas and NGL realizations of approximately $5 per barrel for the remainder of the year.

Additionally PDC is implementing several payroll and non-payroll general and administrative expense (“G&A”) cost saving initiatives, including a 15 percent voluntary pay cut to its senior management team and Board of Directors, a reduction-in-force to better align the Company with its updated operating plan and tiered pay cuts for many of the remaining employees. PDC expects these changes to result in a reduction of greater than ten percent in absolute G&A compared to its original budget.  The Company plans to provide a detailed update to its 2020 guidance and expected cost structure on its first quarter earnings call in early May.

President and CEO Bart Brookman commented, “The industry is in the midst of global demand destruction to which PDC is not exempt.  While our updated operating plan and cost-savings initiatives represent incredibly difficult decisions, I’m extremely confident that PDC is well-positioned to weather this storm thanks to our ability to generate sustainable free cash flow while maintaining an incredibly strong balance sheet.  Meanwhile, our robust hedge positions, ample liquidity and substantial DUC inventory provide us tremendous flexibility while positioning the Company to succeed should the commodity price outlook stabilize, or further deteriorate.”