The Wattenberg Field represents PDC Energy’s largest asset with over 84% of its 2017 production and 75% of year-end 2017 proved reserves. We have approximately 100,000 net acres in the core area making us the third largest leaseholder, as well as producer, in the Core Wattenberg. We are actively developing this liquid-rich field through horizontal drilling in the Niobrara and Codell formations. As of year-end 2017, we estimated we had approximately 1,500 gross horizontal future drilling locations in the Wattenberg Field.

Unique Geological Setting of Core Wattenberg Field

The Wattenberg Field is one of the top rate-of-return horizontal oil plays in the U.S. Onshore. We have successfully drilled the equivalent of 20-22 horizontal wells per 640-acre section, to more efficiently capture the large oil and gas resources in-place in the Niobrara and Codell formations, which contain over 300 feet of gross interval. The Core Wattenberg Field is a well-defined area north of Denver that owes its prolific productivity to its unique geologic setting. The Core overlies an area of crustal basement rock weakness, which is limited in geographic extent. This crustal weakness allowed unusually high heat flow from deeper mantle sources to “super-heat” the highly organic Niobrara source rocks, which in turn generated the significant oil and gas deposits now contained in the Niobrara and Codell formations. The crustal basement weakness extends south-westerly of Wattenberg beneath the Rocky Mountains, where the same high heat flow system has contributed to extensive mineral deposits. This southwest extension is commonly known as the Colorado Mineral Belt, because of the World Class deposits of gold, silver and molybdenum.

We continually pursue additional capital efficiencies designed to improve economic returns. These enhancements include tighter completion spacing and exclusive use of “plug-n-perf” completions and mono-bore drilling. The 2018 capital investment program is focused on the Kersey area, with some spuds in our Plains area, as well as turning-in-line the 24 horizontal wells we acquired in the Prairie area. We expect to run three drilling rigs in 2018.