The Colorado Oil and Gas Conservation Commission (COGCC) approved PDC Energy's Kenosha Oil and Gas Development Plan (OGDP) permit application, a press release announced on June 8.

“PDC has demonstrated its leadership with our stakeholders in the community and regulatory agencies with the Kenosha OGDP approval," PDC senior vice president of operations David Lillo commented. "Our team has done a tremendous job working with COGCC leadership and staff and we appreciate the collaborative relationship we have with them as we permit under the new regulations."

The permit encompasses 69 wells on three pads in Weld County, Colo., marking an important next step as the company increases its permitted inventory by another rig year and ensures drilling and completion activity into 2024.

Kenosha is the company's second acquired OGDP permit, having received approval for its Spinney OGDP on Oct. 6 last year. PDC anticipates soon having over 550 permits and DUCs.

According to a report by Siebert Williams Shank & Co., the approval should increase confidence in the permitting process and add significant inventory to ensure development activity through the next two years.

"An improved sentiment in the permitting process in Colorado for PDCE should drive a valuation re-rating, in our view, especially since PDCE stands out with an above average FCF [free cash flow] yield resulting in industry leading total capital returns," the report stated.

A report from Tudor Pickering Holt & Co. offered similar optimistic outlooks, predicting an operational increase from the company's fiscal year 2022 guidance.

"Even after the recent run, we continue to see incremental upside with the equity trading at ~23% FCF-to-EV in both 2022 (at $103/bbl WTI and $7.45/MMcf HHUB) and 2023 (at $91/bbl WTI and $5.98/MMcf HHUB), offering ~16% returns (incl. base, special, buyback), and generating an aggregate 2022-25 FCF that is ~85% of the company’s market cap," analyst Oliver Huang said in the report.

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