DENVER, Sept. 30, 2021 (GLOBE NEWSWIRE) — PDC Energy, Inc. (“PDC” or the “Company”) (Nasdaq:PDCE) today provided several Company updates including preliminary third quarter operating results and revised 2021 full-year guidance. Further, the Company announced its third quarter earnings call, scheduled for Thursday, November 4, 2021.
2021 Third Quarter Highlights:
- Anticipate total daily production between 197,000 and 200,000 barrels of oil equivalent (“BOE”) per day and daily oil production between 63,000 and 65,000 barrels (“Bbls”) per day.
- Reduced total debt by $200 million through the September 2021 settlement of the Company’s 2021 Convertible Notes. PDC expects to exit the third quarter with less than $1.2 billion of total net debt and a leverage ratio of approximately 0.8x.
Full-Year 2021 Updated Guidance Highlights:
- Anticipated total production near the bottom of the previous range of 190,000 to 195,000 Boe per day and oil production of 60,000 to 63,000 Bbls per day, below the previous range of 64,000 to 66,000 Bbls per day.
- Anticipate second half 2021 adjusted free cash flow (“FCF”), a non-U.S. GAAP metric defined below, of more than $500 million assuming estimated third quarter price realizations and $70 per Bbl WTI oil, $5 per Mcf NYMEX natural gas and $30 NGL realizations in the fourth quarter.
- Expect oil and gas capital investments between $550 to $600 million, unchanged from prior guidance.
PDC’s estimated third quarter production results of approximately 197,000 to 200,000 BOE per day and 63,000 to 65,000 Bbls per day represent sequential increases from the second quarter of approximately three percent and eight percent, respectively. Prior third quarter expectations were five to ten percent sequential growth in daily total production and 15 to 20 percent sequential growth in daily oil production. The lower-than-expected third quarter results are primarily due to less than anticipated Delaware Basin production as a result of tighter than optimal well spacing.
In 2021, PDC turned-in-line 18 Delaware Basin wells, which were drilled in 2019 and the first half of 2020 at average spacing of 14 to 16 wells per undeveloped section equivalent. PDC’s 2021 Delaware Basin drilling program reflects more relaxed spacing assumptions of approximately eight wells per undeveloped section equivalent, which should equate to increased productivity per-well and higher per-section net present value. The majority of the Company’s anticipated 2022 turn-in-lines reflect the more relaxed spacing design as they were drilled in 2021. The Company is currently evaluating and testing additional early-stage artificial lift methods as well as the potential impact to its basin-wide inventory as a result of more relaxed spacing, though it is expected to decrease compared to year-end 2020.
The Company anticipates fourth quarter 2021 daily total production and oil production to represent an increase of more than ten percent compared to the fourth quarter of 2020, resulting in anticipated full-year production towards the low-end of the previously guided range of 190,000 to 195,000 Boe per day. The Company’s full-year oil production guidance has been reduced to between 60,000 and 63,000 Bbls per day to reflect the aforementioned Delaware Basin well performance.
The Company’s multi-year outlook, including projected cumulative post-tax FCF of approximately $2.5 billion, debt reduction of approximately $1 billion, shareholder returns of more than $1 billion and capital investments between $600 and $650 million in 2022 and 2023 remain unchanged.
2021 Third Quarter Teleconference and Webcast
The Company plans to issue its third quarter news release after market close on Wednesday, November 4, followed thereafter by additional materials. The release and materials will be available on the Company’s website, www.pdce.com.
|Conference Call and Webcast:
Date/Time: Thursday, November 4, 2021 at 11:00 a.m. ET
Domestic (toll free): 877-312-5520
Conference ID: 8059582
Webcast and replay: available at www.pdce.com
Reconciliation of Non-U.S. GAAP Financial Measures
We use “adjusted free cash flow (deficit)”, a non-U.S. GAAP financial measure, for internal management reporting, when evaluating period-to-period changes and, in some cases, in providing public guidance on possible future results. In addition, we believe this is a measure of our fundamental business and can be useful to us, investors, lenders and other parties in the evaluation of our performance relative to our peers and in assessing acquisition opportunities and capital expenditure projects. This supplemental measure is not a measure of financial performance under U.S. GAAP and should be considered in addition to, not as a substitute for, cash flows from operations and should not be viewed as an indicator of cash flows reported in accordance with U.S. GAAP. The non-U.S. GAAP financial measures that we use may not be comparable to similarly titled measures reported by other companies. In the future, we may disclose different non-U.S. GAAP financial measures in order to help us and our investors more meaningfully evaluate and compare our future results of operations to our previously reported results of operations. We strongly encourage investors to review our financial statements and publicly filed reports in their entirety and to not rely on any single financial measure.
Adjusted free cash flow (deficit). We believe adjusted free cash flow (deficit) provides additional information that may be useful in an investor analysis of our ability to generate cash from operating activities from our existing oil and gas asset base to fund exploration and development activities and to return capital to stockholders in the period in which the related transactions occurred. We exclude from this measure cash receipts and expenditures related to acquisitions and divestitures of oil and gas properties and capital expenditures for other properties and equipment, which are not reflective of the cash generated or used by ongoing activities on our existing producing properties and, in the case of acquisitions and divestitures, may be evaluated separately in terms of their impact on our performance and liquidity. Adjusted free cash flow is a supplemental measure of liquidity and should not be viewed as a substitute for cash flows from operations because it excludes certain required cash expenditures. For example, we may have mandatory debt service requirements or other non-discretionary expenditures which are not deducted from the adjusted free cash flow measure.
We are unable to present a reconciliation of forward-looking adjusted 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 adjusted cash flow are important to investors because they assist in the analysis of our ability to generate cash from our operations.
About PDC Energy, Inc.
PDC Energy, Inc. is a domestic independent exploration and production company that acquires, explores and develops properties for the production of crude oil, natural gas and NGLs, with operations in the Wattenberg Field in Colorado and Delaware Basin in west Texas. Its operations in the Wattenberg Field are focused in the horizontal Niobrara and Codell plays and our Delaware Basin operations are primarily focused in the horizontal Wolfcamp zones.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (“Securities Act”), Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”) and the United States (“U.S.”) Private Securities Litigation Reform Act of 1995 regarding our business, financial condition, results of operations and prospects. All statements other than statements of historical fact included in and incorporated by reference into 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; cash flows from operations relative to future capital investments; debt levels and financial ratios; commodity prices; capital expenditures; and potential future well spacing.
The above statements are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this press release 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. Throughout this press release or accompanying materials, we may use the term “projection” 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 our 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.
Further, we urge you to carefully review and consider the cautionary statements and disclosures, specifically those under the “Item 1A. Risk Factors” made in our Annual Report on Form 10-K for the year ended December 31, 2020 (“2020 Form 10-K”) filed with the U.S. Securities and Exchange Commission (“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 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 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.
|Director Corporate Finance & Investor Relations|