PDC Energy Announces Supplementary Update to 2020 Plan Including Reduced Operating Activity and Incremental Cost Saving Initiatives - Seite 2

Updated Operating Plan:

• In the Delaware Basin, the Company plans to release its drilling rig in May, resulting in zero drilling and completion activity in the basin for the remainder of the year as its completion crew was released in March.
• PDC plans to reduce its Wattenberg rig count from three to one in May.  The remaining rig is currently expected to run for the rest of 2020.
• PDC plans to release its Wattenberg completion crew upon the completion of the current pad, with the expectation of resuming completions early in the fourth quarter.
• The Company currently expects to curtail approximately 20 to 30 percent of its anticipated May and June production volumes, on a barrel of oil equivalent (“Boe”) basis, in response to decreases in NYMEX pricing and significantly widened differentials.

Production for the year, compared to pro forma 2019 volumes, is expected to decrease approximately ten percent on a Boe basis and 20 percent on an oil basis.  Both figures reflect the impact of the aforementioned reductions in completion activity and production curtailments, with the assumption that curtailments are reduced in the third quarter and eliminated by the fourth quarter. For the remainder of 2020, PDC has swaps and two-way collars protecting approximately 70 percent of its updated estimated oil production at a weighted-average floor price of approximately $58 per barrel. Approximately 30 percent of its estimated natural gas production is protected at approximately $2 per MMBtu.

PDC’s 2021 outlook assumes similar levels of capital investment compared to its updated 2020 plan with a projected five to ten percent increase in oil volumes.  Assuming a modest price recovery to $30 per barrel WTI, $2.50 per MMBtu NYMEX natural gas and NGL realizations of approximately $7.50 per barrel, PDC projects to generate in excess of $100 million of free cash flow in 2021.  PDC’s 2021 hedge positions protect nearly 30 percent of its estimated oil volumes and 35 percent of estimated natural gas volumes at weighted-average floor prices of approximately $50 per barrel and $2.35 per MMBtu, respectively.  

The Company will continue to monitor the near and long-term commodity price environment and maintains the financial and operational flexibility to further adjust its plan should it deem necessary.  Given the current conditions, PDC has suspended its share repurchase program while continuing to prioritize its financial strength and liquidity.