The company reported a net loss for the third quarter ended September 30, 2009 of $24.5 million, or a $1.44 loss per diluted share, compared with a September 30, 2008 quarterly net income of $126.9 million, or $8.55 per diluted share. The net loss for the third quarter 2009 was due to a $35.0 million net decrease in the non-cash mark to market value of the company's derivative contracts. This unrealized loss was partially offset by a realized gain of $23.2 million during the quarter, resulting in a net loss on derivatives positions in the third quarter 2009 of $11.8 million, compared to a net gain of $166.7 million in the same third quarter period of 2008. Adjusted net income (loss), a non-GAAP measure defined below under Non-GAAP Financial Measures, for the third quarter of 2009 was a net loss of $2.8 million, or a .16 loss per diluted share.
Third quarter 2009 production increased 7.5 percent compared to the same period in 2008, to 10.9 Bcfe from 10.2 Bcfe. During the third quarter 2009 the Company drilled 21.0 total net wells compared to 93.7 total net wells drilled in the same 2008 period.
Adjusted cash flow from operations for the third quarter 2009 was $37.3 million, or $2.20 per diluted share, compared to $59.1 million, or $3.98 per diluted share for the third quarter of 2008. The decrease was primarily the result of a commodity price decline of approximately 59% over the corresponding period of 2008.
During the third quarter 2009, PDC issued common equity of approximately 4.3 million shares for net proceeds of approximately $48.5 million. The proceeds were used to reduce borrowings on the company's credit facility. The offering provided the company improved leverage and coverage metrics, greater liquidity in the event of a prolonged depressed commodity price environment, and financial flexibility to pursue strategic objectives.
Oil and natural gas sales revenues from the company's producing properties for the third quarter 2009 were down 56 percent to $44.0 million, a decrease of $55.4 million from $99.4 million for the same 2008 period. The average realized price of oil and gas, including realized gains and losses on derivatives, decreased approximately 37 percent to $6.02 per Mcfe in the third quarter 2009 compared to $9.49 in the third quarter 2008. The average sales price for oil and natural gas, excluding realized gains and losses on derivatives, during this year's third quarter was $4.02 per Mcfe, a decrease of approximately 59 percent from $9.76 per Mcfe for the same quarter 2008.
Oil and gas production and well operations costs, including production taxes, decreased 33% to $15.2 million, or $1.39 per Mcfe for the third quarter 2009, compared to $22.6 million, or $2.22 per Mcfe for the third quarter of 2008. The reduction was primarily attributable to lower oil field service and equipment costs in the Company's producing basins, and lower production taxes during the period. Production taxes, which fluctuate with oil and natural gas revenues, decreased $4.5 million to $2.6 million for the third quarter 2009 compared to $7.1 million for the same period of 2008.
General and administrative expenses increased to $9.6 million in the third quarter 2009 from $8.1 million in the same 2008 period. The third quarter 2009 expense increase was primarily related to costs associated with increased staffing during the last half of 2008.
The Company's exploration expense decreased from $10.2 million in the third quarter 2008 to $6.6 million in the third quarter of 2009. The decrease was due to $3.9 million of exploration dry hole costs recognized in the third quarter 2008, partially offset by a $2.8 million impairment in the third quarter 2009.
Current 2009 drilling plans continue to be focused primarily in the Rocky Mountain Region. Plans are to drill approximately 103 gross, 82 net, wells in the Rocky Mountain Region and the Appalachian Basin. Exclusive of exploratory wells, through September 30, 2009, the Company has drilled 68 gross wells compared to 277 gross wells for the same 2008 period. One drilling rig has been operating for most of the year in the Wattenberg Field. PDC plans to continue to drill with the one rig in the oil rich sections of the field to take advantage of the relatively favorable oil prices along with high natural gas liquids and Btu content of these wells. The JV is currently formulating an exploration plan for the Marcellus Formation in the Appalachian Basin where PDC has been an operator for over thirty years, and currently operates approximately 2,100 wells within the Marcellus fairway. Seven vertical Marcellus wells have been drilled in West Virginia year-to-date, with plans for one additional vertical test planned this year in Pennsylvania. Ten square miles of 3D seismic were recently shot. Data from this shoot will be used to determine the location and drilling plan of the JV's first horizontal Marcellus well, scheduled for the first quarter of 2010.
Third quarter 2009 production increased 7.5 percent compared to the same period in 2008, to 10.9 Bcfe from 10.2 Bcfe. During the third quarter 2009 the Company drilled 21.0 total net wells compared to 93.7 total net wells drilled in the same 2008 period.
Adjusted cash flow from operations for the third quarter 2009 was $37.3 million, or $2.20 per diluted share, compared to $59.1 million, or $3.98 per diluted share for the third quarter of 2008. The decrease was primarily the result of a commodity price decline of approximately 59% over the corresponding period of 2008.
During the third quarter 2009, PDC issued common equity of approximately 4.3 million shares for net proceeds of approximately $48.5 million. The proceeds were used to reduce borrowings on the company's credit facility. The offering provided the company improved leverage and coverage metrics, greater liquidity in the event of a prolonged depressed commodity price environment, and financial flexibility to pursue strategic objectives.
Oil and natural gas sales revenues from the company's producing properties for the third quarter 2009 were down 56 percent to $44.0 million, a decrease of $55.4 million from $99.4 million for the same 2008 period. The average realized price of oil and gas, including realized gains and losses on derivatives, decreased approximately 37 percent to $6.02 per Mcfe in the third quarter 2009 compared to $9.49 in the third quarter 2008. The average sales price for oil and natural gas, excluding realized gains and losses on derivatives, during this year's third quarter was $4.02 per Mcfe, a decrease of approximately 59 percent from $9.76 per Mcfe for the same quarter 2008.
Oil and gas production and well operations costs, including production taxes, decreased 33% to $15.2 million, or $1.39 per Mcfe for the third quarter 2009, compared to $22.6 million, or $2.22 per Mcfe for the third quarter of 2008. The reduction was primarily attributable to lower oil field service and equipment costs in the Company's producing basins, and lower production taxes during the period. Production taxes, which fluctuate with oil and natural gas revenues, decreased $4.5 million to $2.6 million for the third quarter 2009 compared to $7.1 million for the same period of 2008.
General and administrative expenses increased to $9.6 million in the third quarter 2009 from $8.1 million in the same 2008 period. The third quarter 2009 expense increase was primarily related to costs associated with increased staffing during the last half of 2008.
The Company's exploration expense decreased from $10.2 million in the third quarter 2008 to $6.6 million in the third quarter of 2009. The decrease was due to $3.9 million of exploration dry hole costs recognized in the third quarter 2008, partially offset by a $2.8 million impairment in the third quarter 2009.
Current 2009 drilling plans continue to be focused primarily in the Rocky Mountain Region. Plans are to drill approximately 103 gross, 82 net, wells in the Rocky Mountain Region and the Appalachian Basin. Exclusive of exploratory wells, through September 30, 2009, the Company has drilled 68 gross wells compared to 277 gross wells for the same 2008 period. One drilling rig has been operating for most of the year in the Wattenberg Field. PDC plans to continue to drill with the one rig in the oil rich sections of the field to take advantage of the relatively favorable oil prices along with high natural gas liquids and Btu content of these wells. The JV is currently formulating an exploration plan for the Marcellus Formation in the Appalachian Basin where PDC has been an operator for over thirty years, and currently operates approximately 2,100 wells within the Marcellus fairway. Seven vertical Marcellus wells have been drilled in West Virginia year-to-date, with plans for one additional vertical test planned this year in Pennsylvania. Ten square miles of 3D seismic were recently shot. Data from this shoot will be used to determine the location and drilling plan of the JV's first horizontal Marcellus well, scheduled for the first quarter of 2010.
Petroleum Development Corporation (www.petd.com ) is an independent energy company engaged in the development, production and marketing of natural gas and oil. Its operations are focused in the Rocky Mountains with additional operations in the Appalachian Basin and Michigan. PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.
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