Zero Improvement In Crude Prices Is A Scary Thought, But Not For PDC Energy

This article was first published by Seeking Alpha on April 13, 2015

By Sarfaraz A. Khan. 

A number of independent exploration and production companies have rapidly grown over the last few years but following the 50% drop in oil prices since last summer, most have scaled back their operations. On the other hand, PDC Energy (NASDAQ:PDCE) has recently revealed that it will grow its production at a compounded annual growth rate of between 25% and 30% through 2017, even if crude prices hover at $50 a barrel during this period.

PDC Energy is an independent oil and gas producer that holds 250 million barrels of oil equivalents of proven reserves in Colorado's Wattenberg field and Ohio's Utica Shale formation. During its Analyst Day last week, the company laid out its plans on how it is going to perform under three oil price scenarios.

In the unlikely event of oil staying at $50 per barrel in the current and the next two years (resilient case), the company will grow its production at an average annual rate of 25% to 30%. Under the "base case" scenario which assumes gradual improvement from March 20 strip prices to $61.24 per barrel by 2017, the company intends to increase its production at CAGR of 31% to 36%. In the upside scenario, which assumes $50, $60 and $70 per barrel crude prices for 2015, 2016 and 2017 respectively, the company intends to grow its output at a CAGR of 35% to 40%. …… read fullarticle at Seeking Alpha.