PDC Energy plans to sell $100 million 5.5-year convertibles to yield 3%-3.5%, up 27.5%-32.5%

By Rebecca Melvin

New York, Nov. 17 - PDC Energy plans to price $100 million of 5.5-year convertibles after the market close Thursday that were talked to yield 3% to 3.5% with an initial conversion premium of 27.5% to 32.5%, according to a syndicate source.

The Rule 144A deal has a $15 million greenshoe.

PDC also plans to price an offering of 3 million shares of common stock with a 450,000-share greenshoe. The offering is being made under a shelf registration.

Wells Fargo Securities and Bank of America Merrill Lynch are acting as joint bookrunners for both deals.

The bonds are non-callable and have net share settlement.

Proceeds will be used to fund an acquisition of additional assets in the Wolfberry Trend in the Permian Basin of West Texas, which is expected to close Nov. 19, and for other acquisitions. Proceeds also may be used for general corporate purposes, including drilling capital expenditures associated with the development of the Horizontal Niobrara oil play and in the Wolfberry oil trend and to fund refractures and recompletions on wells acquired from PDC's drilling partnerships.

Pending these uses, PDC intends to use proceeds to repay temporarily its outstanding credit facility in its entirety, with the remaining balance being deposited in an interest bearing account and held as cash and cash equivalents until use.

Denver-based PDC is an oil and natural gas exploration, development and marketing company.

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