Upstream energy firm PDC Energy Inc. PDCE declared that the underwriters have purchased 522,000 extra shares by fully exercising their options. The company gave them the options during its recent common stock offering – will likely be closed by Mar 23, 2015 − in case there is an overallotment.
Gross proceeds, including the exercise and excluding compensations and related expenses for the underwriters, from the offering came at $206 million.
It has been more than sevenmonths since the company is operating in an unfavorable business scenario following plummeting crude prices. In fact, West Texas Intermediate (WTI) crude fell almost 60% since last June. This was owing to abundant supply of the commodity and lackluster global demand.
The free fall in crude price also impacted the company’s fourth-quarter 2014 results. PDC Energy reported loss of $1.11 per share – excluding one-time items − against the Zacks Consensus Estimate of earnings of 20 cents and the year-ago quarter profit of 44 cents.
To weather the plunging crude price, PDC Energy has planned to reduce its 2015 capital expenditure to $473 million from the prior guidance of $557 million. This would be much lower its 2014 spending of $628.6 million.
Denver, CO-based PDC Energy is an oil and gas exploration and production company which operates in Utica Shale and Wattenberg field. The company currently carries a Zacks Rank #2 (Buy), implying that the stock will outperform the broader U.S. equity market over the next one to three months.
Meanwhile, better-ranked players in the energy sector include Western Gas Equity Partners LP WGP, Ferrellgas Partners LP FGP and Valero Energy Partners LP VLP. All these stocks sport a Zacks Rank #1 (Strong Buy).
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