Company Profile
Company Overview
Petroleum Development Corporation (PDC) (NASDAQ GSM:PETD) is an independent oil & gas producer engaging in exploratory and development drilling, acquiring producing properties, and natural gas marketing operations. Although PDC started as a small, public Appalachian Basin oil and gas company in 1969, we have become much more than that in recent years. Our production, revenues, and profitability have grown substantially and steadily. In 2002, PDC was named one of the 100 "Fastest Growing Companies" by Fortune Small Business. During 2003, we became one of the companies comprising the Russell 3000 index of the 3000 largest public companies in the United States as measured by market capitalization. In 2004 we were added to the S&P 600 Small Cap index. PDC was included in the new NASDAQ Global Select Market in 2006.
The growth that made such recognition possible has resulted from a unique business model that has allowed the company to grow revenue, net income, reserves and production much more rapidly than our competitive peers. Our success has been fueled by growth outside our Appalachian home, first in the Michigan Basin and more recently in the Rocky Mountains. Currently, PDC's drilling and production operations are in the Rocky Mountains, Appalachian Basin, and Michigan. Approximately 80% of PDC’s production is natural gas, and almost 80% of total production is provided by the Rockies operating area. In addition to drilling and operating company wells, PDC also drills, and produces wells and markets production for others, including partnerships, where the company is serving as managing general partner.
Business Strategy: PDC’s primary goal is to continue aggressively growing per-share reserves, production and net income in order to increase shareholder value. To affect meaningful increases in these key categories, PDC maintains an active drilling program focusing on low risk development of gas and oil reserves, limited exploratory drilling and acquisition of producing properties with development potential. PDC’s acreage holdings include positions in the DJ, Piceance and Williston Basins as well as legacy acreage in Appalachia and Michigan. The Company focuses on development drilling in Northeast Colorado, the Wattenberg Field, and in the Piceance Basin.
Recent Developments: PDC continues to increase production through its exploration and development drilling activities. Production for 2006 was up by 24% compared to 2005 through development of the Company’s properties, primarily in Colorado. But the big news for 2007 will be the impact of property acquisitions through the Company’s 1031 exchange transaction in early 2007. On July 20, 2006, PDC completed a $354 million sale of approximately 8,700 acres of its undeveloped Piceance Basin acreage. PDC retained all of the producing properties and the balance of the undeveloped properties in the area representing approximately 475 undeveloped locations on 10 acre spacing. The transaction allowed PDC to accelerate the receipt of value for acreage that would not have been developed for many years while continuing its aggressive development plans. In several unrelated transactions PDC used the proceeds to acquire interests in approximately 231 producing wells and several hundred additional undeveloped locations in the Wattenberg Field, Colorado as well as additional ownership interests in more than 700 wells drilled previously in conjunction with Company sponsored drilling programs located in the Appalachian and Michigan Basins and Colorado.