PDC Energy will enter the Permian's Delaware Basin with a purchase of 57,000 net acres for US$1.5 billion. The acreage, located in Reeves and Culberson counties in west Texas, has a current net production of approximately 7,000 boe/d from 21 horizontal wells. PDC will operate 100% of the areage, with an average working interest of 93%. The sellers are Arris Petroleum Corporation and 299 Resources LLC, both backed by Kimmeridge Energy Management Company. Our valuation supports the deal price paid by PDC. We model breakevens as low as US$44/bbl in the Central area based on recent offset well performance.