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PDC Energy Turns a Profit in 1Q15, Utica Production Up

In 2014 PDC Energy sold off its 141,000 of Marcellus Shale leases to Mountaineer Keystone for $500 million (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). However, PDC kept its Utica Shale acreage, although they aren’t drilling any new wells in the Utica for the time being (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). PDC continues, for now, to focus on the Wattenberg field in northern Colorado. They must be doing something right because the company seems to be one of the few shale drillers to turn a profit in 1Q15…
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PDC Energy’s Interesting 2014 – “Dynamite” in the Utica

PDC Energy had an interesting 2014 in the Marcellus/Utica. During the year they sold off their 131,000-acre Marcellus Shale operation to Mountaineer Keystone for $500 million (see Major New Player in the Marcellus Emerges: Mountaineer Keystone). They entered the year intending to drill 18 Utica Shale wells (they came close). Along the way they had an accident and spilled drilling mud into a creek (see PDC Accident: Drilling Mud Spills into Creek in Morgan County, OH). During the year they fired (?) reassigned (?) their CEO back to the board and promoted the COO to be CEO (see Changing Chairs at PDC Energy: New President/CEO). And at the end of last year, the company announced they will push the pause button on new Utica drilling in 2015 (see PDC Energy Pushes Pause Button on OH Utica Drilling for 2015). Yesterday PDC provided a high level overview of 2014 (none of the above items mentioned) which includes a few brief statements about the Utica and Marcellus. One of the items their most excited about? A 4-well Utica pad called (we kid you not), “Dynamite”…
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PDC Energy Pushes Pause Button on OH Utica Drilling for 2015

pause buttonPDC Energy, with 67,000 acres of leases in Ohio’s Utica Shale, is not among the largest Utica drillers. But they’re by no means insignificant either. The company released their 2015 capital expenditure (capex) budget and production guidance yesterday. PDC says they will idle their single drilling rig in the Ohio Utica in 2015 and spend just $38 million in the Utica next year (compared to $190 million in 2014) to finish up several wells already begun. PDC says the price of natgas is just too darned low right now and that they will be back when the price goes up. (Our thought: PDC will have a long wait!) PDC is instead spending their money in the Niobrara Shale in Colorado–although the company plans to spend 14% less next year than they did this year…
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PDC Energy 3Q14: Drills 3 New Utica Wells, 11 Utica Wells Online

PDC Energy, an independent exploration and production company that produces, develops, acquires and explores for crude oil, natural gas and NGLs with primary operations in the Wattenberg Field in Colorado and in the Utica Shale in southeastern Ohio, provided their third quarter 2014 update yesterday. PDC has sold their Marcellus operations and now concentrates on the Utica in the northeast (see PDC Energy to End Marcellus Drilling in 2014, Continue in Utica). PDC reports adding a second drilling rig to their OH Utica operation in July and, as a result, they’ve drilled 3 new Utica wells during 3Q14. Below we’ve pulled out relevant portions of the update dealing with the Utica Shale…
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PDC Energy Settles Lawsuit with Previous Investors for $35M

There’s a fair amount of high finance when it comes to how drilling companies are structured on paper. There are, in some cases, corporations, partnerships, and then there’s the Master Limited Partnership (MLP), a special form of company allowed under United States law to encourage the mineral and extractive industries. At the end of the day, they’re businesses, no matter that form of legal structure they take. However, the legal structure of partnerships is used to encourage investors to invest large sums of money. And when those partnerships are bought out, the investors want their due proceeds. Sometimes there’s a dispute, as happened to PDC Energy (formerly known as Petroleum Development Corporation). PDC had several layers of partnerships that they rolled up into one company back in 2010/2011. The partners in the sub-units purchased felt that they didn’t get their fair share, so they sued. On Friday PDC announced they had settled and over the next 13 years they’ll pay out money to the tune of $35 million…
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Bubblin’ Oil at Site of PDC Well Blowout in Morgan County, OH?

An update to a story we’ve tracked since early May. PDC Energy had begun drilling several Utica wells in Morgan County, OH when one of the wells had an accident and spilled drilling mud on the drill pad, overflowing off the pad (see PDC Accident: Drilling Mud Spills into Creek in Morgan County, OH). A quick investigation determined that the blowout preventer failed (see Blowout Preventer Failed at Morgan County, OH Utica Well Site). We have an update on that well and two other wells located on the same pad…
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Changing Chairs at PDC Energy: New President/CEO

PDC Energy is a driller in both the Utica and Marcellus Shale plays, as well as other plays in the U.S. Yesterday the company announced effective immediately they are promoting their COO and executive VP Barton Brookman to be president and CEO. Stepping down as head of the company is James Trimble, a position he’s held for the past three years. Trimble will remain on the board of directors. In reflecting on his tenture at the helm of PDC, Trimble says one of his proudest achievements is “initiating successful exploration in the Utica shale.” Here’s yesterday’s announcement of changing chairs at PDC…
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Blowout Preventer Failed at Morgan County, OH Utica Well Site

We now have a few more bits of information about the drilling accident last week in Morgan County, OH (for background, see PDC Accident: Drilling Mud Spills into Creek in Morgan County, OH). At least two safety measures, including the well blowout preventer, failed to contain the gas and drilling mud from coming back out of the borehole after PDC Energy hit a pocket of natural gas while drilling…
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PDC Accident: Drilling Mud Spills into Creek in Morgan County, OH

In the hubbub of news that comes from Utica Shale drilling in eastern Ohio, one county we don’t hear much about is Morgan County (southeast part of the state, below Muskingum County and left of Noble County). So it was with interest we noted last November that PDC Energy was issued permits to drill three wells in Morgan County (see Morgan County, OH Looks to Join the Utica Shale Well Club). The drilling has been under way and we didn’t know it! Except now.

Last week there was a “mishap” at the drill site for one of the wells and about 140 barrels of drilling mud spilled at the site (something like 5,800 gallons). Around 100 barrels of the semi-liquid mud was contained on the drill pad, but about 40 barrels spilled into a nearby creek where it was contained. Apparently PDC hit a pocket of gas which escaped and forced the mud out of the hole faster than they could contain it. The Ohio Dept. of Natural Resources is now investigating to determine whether PDC can move forward with drilling or will need to plug that well and abandon it. Here’s what we know at the moment…
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Some Utica Players Tip Their Hand on Plans for Next 3-5 Years

Although drillers are often mum on future plans, some drillers (and midstream companies) who participated in the recent Ohio Oil & Gas Association (OOGA) annual winter meeting earlier this month were helpfully chatty about what’s coming in the Ohio Utica over the next few years.

Tom Knox, intrepid new reporter doing a great job at the Columbus Business Journal, was on hand at the OOGA meeting and took good notes. He reports on what PDC Energy, Antero Resources, Eclipse Resources and Enlink Midstream have planned in the next 3-5 years for the Utica…
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PDC Energy 2013: Production Up 35%; 200 Utica Locations on Radar

PDC Energy is focused on shale drilling in three plays/regions: the Wattenberg Field in Colorado, the Utica Shale in southeast Ohio and the Marcellus Shale in West Virginia. The company owns roughly 125,000 acres of leases in the Marcellus Shale and 48,000 acres of leases in the Utica Shale. PDC issued their fourth quarter and year end results for 2013 yesterday and it was a good year for this growing company. Production was up 35% overall with oil and NGL volumes up 40% for the year.

Although they’ve only really just gotten started with their Utica drilling program, PDC reports they have 200 locations targeted for future Utica drilling. Not all of that will happen in 2014 of course. Even though PDC had substantially higher production, they experienced a net loss on the balance sheet due to risk pricing for natural gas–complicated financial trading of derivatives to hedge against price risk (trading which didn’t go the way they wanted it to). The net loss for 2013 was a lot less than the loss in 2012, so the trend is going in the right direction. Here’s the update issued yesterday, updating the financial and operational picture for PDC:
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PDC Energy to End Marcellus Drilling in 2014, Continue in Utica

It’s the “Get out an update on what we plan to do in 2014” time of year. Doesn’t exactly roll off the tongue like “It’s the most wonderful time of the year!” End of year is not only about holidays but also about telling investors what they can expect next year–how a company plans to make money and provide a good return. Even though these statements are sometimes routine and dry, often you find interesting details when you pick through them. Like yesterday’s 2014 guidance statement from PDC Energy, a driller in both the Marcellus and Utica Shale.

In a low-key but to us surprising announcement, PDC’s statement says they will suspend drilling in the Marcellus in 2014. They plan to finish drilling four wells already under way in Taylor County, WV and then not drill any more Marcellus wells, but instead concentrate their time and effort on the Utica Shale and on Colorado’s Wattenberg Field. For those interested in Marcellus and Utica drilling, reading these updates is anything but dry! Take time to look over PDC’s plans for 2014, particularly their plans for the Utica…
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Morgan County, OH Looks to Join the Utica Shale Well Club

So far Morgan County, OH (south of Muskingum County, west of Noble County) has been quiet with respect to Utica Shale drilling. We’ve heard nothing. However, in November, Petroleum Development Corporation (PDC) obtained three Utica Shale permits in Center Township, Morgan County. Depending on the results of those three wells, more may be on the way.

In addition to the first three Utica wells to be drilled in Morgan by PDC, another surprise (to MDN): There’s a landowner group in Morgan County we were not aware of–the Morgan County Landowner Group (MCLG)–which incorporated as a non-profit in 2012 and already has 60,000+ acres…
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PDC Energy 3Q13: “Excited” about Utica in Washington County, OH

PDC Energy, headquartered in Denver, CO, has drilling operations in both the Marcellus and Utica Shale region. In June of this year, PDC sold off “non-core” assets they owned in Colorado and said they would invest that money in drilling the Utica Shale (see PDC Energy Sells CO Assets, Will Use Money for Utica Drilling). In their third quarter update, issued yesterday, PDC is positively effusive about their first Utica Shale well in Washington County, OH. It is the first well they’ve drilled in their “southern Utica” acreage and judging by the results, they plan to drill many more in that area.

In addition to good tidings from the Utica, PDC announced they raised $276 million from floating a new stock offering. They were also listed in the Russell 2000 index. It’s been a busy three months for PDC. Relevant (Utica) portions of their 3Q13 update:
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Eastern OH Shale Drillers Donate to Local Schools

Several high schools in eastern Ohio have received a surprise gift: money from drillers. Antero Resources recently donated $2,500 to each of five high schools for use in their athletics programs. PDC Energy recently donated $5,000 to the Wolf Creek school. And CONSOL Energy is running a contest for select Ohio schools with a $10,000 first prize.

All of these efforts come under the umbrella of what we call “the industry gives back”…
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Who’s Who in OH Utica Shale Drilling for 2013

Who's WhoInvestor’s website Market Realist ran a 7-part series on the Utica Shale yesterday–really good stuff. As part of that series they list the biggest drillers/leaseholders in the Ohio Utica Shale. It’s a very useful rundown and update on the latest positions held by the major players of the Utica. We’ve pulled and condensed from their article to give you the latest rundown on who’s who in the Ohio Utica Shale…
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