PDC Energy has signed an agreement with a private company to acquire producing assets and undeveloped acreage located in the Wolfberry oil trend in Texas for $40m in cash.

The company will increase its position in the Wolfberry trend by acquiring current net production of approximately 330 barrels of oil equivalent (boe) per day from six Wolfberry wells, and a seventh well was recently completed and is currently on flowback.

All assets acquired will be operated by the company with essentially a 100% working interest.

The assets are located on a primarily contiguous 5,760 net acre block, with 122 identified Wolfberry oil drilling locations on 40-acre spacing.

PDC Energy expects that the assets will add approximately 10 million barrels of oil equivalent (mmboe) in proved plus probable reserves.

The reserves are estimated to be approximately 90% crude oil and natural gas liquids, and are projected to have a full-cycle cash margin of about $60/boe using current strip pricing.