PDC Energy To Sell 50% Stake In PDCM Marcellus JV For About $250 Mln

(RTTNews) - PDC Energy Inc. (PDCE) announced that it agreed to sell its fifty percent interest in PDC Mountaineer LLC or "PDCM", a Marcellus Joint Venture, to Mountaineer Keystone Energy, LLC for about $250 million subject to certain purchase price adjustments.

PDC's net pre-tax proceeds from the sale, after its share of JV debt repayment and other working capital adjustments, is expected to be about $190 million comprised of $150 million in cash and a $40 million note.

The transaction includes the buyer's assumption of PDC's share of the firm transportation obligations related to the assets owned by PDCM as well as PDC's share of certain PDCM natural gas hedging positions for the years 2014 and 2015.

The effective date of the transaction is January 1, 2014 and it is expected to close on or about October 15, 2014, subject to customary closing conditions. The assets are approximately 99% natural gas and include an estimated 240 billion cubic feet (Bcf) of proved reserves net to PDC, as of December 31, 2013. The assets produced about 24 million cubic feet equivalent per day (MMcfe/d) net to PDC in the first quarter of 2014. Tudor Pickering Holt acted as advisor on the sale.