PDC Energy Executes an Agreement to Acquire Liquid-Rich Assets in the Core Wattenberg Field, Accelerates Niobrara Development...

Petroleum Development Corporation (dba PDC Energy) ("PDC" or the "Company") (Nasdaq:PETD) announced today that the Company has executed a definitive agreement to acquire Core Wattenberg assets that contain significant liquid-rich horizontal drilling opportunities from a private party for a purchase price of approximately $330.6 million, subject to customary terms and adjustments. The effective date of the transaction is April 1, 2012 with closing currently scheduled for June 29, 2012, subject to customary closing conditions.

Key Highlights of the Acquisition:

• The assets are located almost entirely in the Core Wattenberg Field of Weld and Adams Counties, Colorado and are approximately 94% operated. The acquired assets include an estimated 35,000 net acres prospective for horizontal development of the Niobrara and Codell formations. The acquired leasehold is 100% held by production ("HBP") and has an average working interest of approximately 93% with an average net revenue interest of approximately 81%.  
• Current net production is approximately 2,800 barrels of oil equivalent per day ("Boepd") from approximately 700 wells producing primarily from the Niobrara and Codell formations.  
• Ryder Scott, the Company's independent petroleum engineering consulting firm, completed an engineered reserve analysis of the acquired assets and estimates net proved reserves of 29.2 million barrels of oil equivalent ("MMBoe") using year-end 2011 SEC flat pricing and an effective date of April 1, 2012. The proved reserves are approximately 58% crude oil and natural gas liquids, and are approximately 54% proved developed.    
• The Company has identified 180 gross proven plus probable Horizontal Niobrara drilling locations on the acquisition properties using current PDC spacing methodology of five gross (four net) wells per 640-acre section. The Company anticipates the acquired Horizontal Niobrara acreage will deliver, on a gross well basis, reserves of 300 to 500 thousand barrels of oil equivalent (MBoe) per well and generate an estimated $4 to $8 million of present value per well, discounted at 10% and further assuming current cost estimates of $4.2 million dollars per well and utilizing the January 31, 2012 NYMEX commodity price strip.  
• A significant portion of the leasehold is in close proximity to PDC's current position in the Core Wattenberg Field which should provide opportunities for operational, midstream and marketing synergies. Additionally, the acquired assets include acreage that directly offsets some of the industry's best results in the Core Horizontal Niobrara to date.

PDC Combined Wattenberg Position upon closing: 

• The Company's Wattenberg leasehold position is estimated to increase to about 109,000 net acres (103,000 net acres in the Core Wattenberg) with a current combined inventory of 546 gross liquid-rich Horizontal Niobrara drilling locations.  
• The Company's net production from Wattenberg is estimated to increase to approximately 15,600 Boepd, comprised of approximately 60% liquids.  
• The Company's net proved reserves from Wattenberg are estimated to increase to 106 MMBoe, comprised of approximately 60% liquids.  
• The Company anticipates substantial upside to its current inventory through Horizontal Niobrara downspacing and Horizontal Codell development. Both pilot programs are being tested within the Company's 2012 capital budget and could significantly increase PDC's current 546 gross horizontal well inventory of liquid-rich drilling projects. 

PDC Corporate 2012 Operational Update:

• PDC plans to deploy a second horizontal rig beginning in the third quarter to accelerate value within its Core Wattenberg Field. The Company plans to spud approximately 37 Horizontal Niobrara wells in 2012 as it transitions to a more efficient pad-drilling operation. PDC anticipates the addition of a third horizontal Niobrara rig in 2013.  
• The Company plans to fund its second horizontal Niobrara rig by reallocating capital investment from its Wattenberg refrac / recomplete program and redeploying capital expenditures from the suspension of its Marcellus dry gas drilling program. PDC reaffirms its 2012 non-acquisition capital budget guidance of approximately $284 million.  
• The Company estimates that its 2012 net production will increase to approximately 54.5 billion cubic feet equivalent (Bcfe) from continuing operations (55 Bcfe including production from its divested Permian Basin assets which is reflected as discontinued operations).  The revised estimate incorporates production from the acquired properties as of the close date and the capital expenditure redeployments set forth above.   
• The Company projects that its 2012 net exit rate will increase to approximately 160 million cubic feet equivalent per day (MMcfepd) (or 26,500 Boepd) with a 41% liquids component. In addition, PDC's 2012 liquids-only exit rate is estimated to increase from 8,900 barrels per day to 10,900 barrels per day, resulting in a 22% increase over prior 2012 net exit rate guidance.

James Trimble, President and Chief Executive Officer of PDC Energy, stated, "This Core Wattenberg acquisition provides substantial upside opportunities and is a very significant step towards completing our transition to a liquid-rich company. We now have the capability to reach a 50% liquids production mix over the next several years. The acquisition solidifies PDC's position as the third largest leaseholder with about 103,000 net acres in the highly sought after Core Wattenberg Field. The E&P industry is achieving some of the strongest and most consistent economic results in the Core Wattenberg Field as compared to other resource plays in the United States. This acquisition should enable the Company to deliver double-digit liquid-rich production growth for the next several years without requiring significant capital investment in the Company's large HBP gas assets. The 546 gross Horizontal Niobrara locations, along with potential additional upside from Niobrara downspacing and Horizontal Codell development, should provide substantial reserve growth and position us to add shareholder value for many years to come."

About PDC Energy

PDC Energy is a domestic independent exploration and production company that acquires, develops, explores, and produces natural gas, NGLs, and crude oil. The Company's Western Operating Region is primarily focused on development in the Wattenberg Field in Colorado, particularly in the liquid-rich horizontal Niobrara play and on the ongoing development of refracture/recompletion of PDC's existing Wattenberg vertical wells. In the Company's Eastern Operating Region, PDC is focused on horizontal development in the Marcellus Shale in northern West Virginia, and recently initiated exploration and development activity in the liquid-rich portion of the Utica Shale play in Ohio. PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding PDC's business, financial condition and results of operations. These statements and all other statements other than statements of historical facts included in and incorporated by reference into this press release are "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, plans, believes, seeks, estimates, projects and similar expressions or variations of such words are intended to identify forward-looking statements herein. Such statements include those regarding the Company's future financial and operating results, including cash flows from Horizontal Niobrara wells and the resulting present values of those wells; future capital projects and expenditures; estimated natural gas and oil production and reserves, including from Horizontal Niobrara wells; future reserve estimates; plans to deploy a second horizontal rig beginning in the third quarter to drill in the Core Wattenberg Field and expected funding for such second rig; the anticipated addition of a third horizontal Niobrara rig in 2013; the successful closing of the Core Wattenberg transaction and anticipated closing date; anticipated increased production from the acquired assets; estimated double digit liquid-rich production growth over the next several years; anticipated synergies as a result of the acquisition, including anticipated strong economic returns; development plans for the acquired acreage; anticipated substantial upside to current inventory through Horizontal Niobrara downspacing and Horizontal Codell development; projected 2012 net exit rate; expected liquids production mix over the next several years and management's strategies, plans and objectives. However, these are not the exclusive means of identifying forward-looking statements herein. Although forward-looking statements contained in this release reflect the Company's good faith judgment, such statements can only be based on facts and factors currently known to PDC. Consequently, forward-looking statements are inherently subject to risks and uncertainties, including known and unknown risks and uncertainties incidental to the exploration for, and the acquisition, development, production and marketing of natural gas and oil, and actual outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Important risk factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to:

• changes in production volumes and worldwide demand;
• volatility of commodity prices for natural gas and oil;
• changes in estimates of proved reserves;
• inaccuracy in reserve estimates and expected production rates;
• declines in the values of PDC's natural gas, NGL, and oil properties resulting in impairments; and/or write-downs of reserves
• the future cash flow, liquidity and financial position of the Company;
• the timing and extent of the Company's success in discovering, acquiring, developing and producing natural gas and oil reserves;
• PDC's ability to acquire leases, drilling rigs, supplies, services and personnel at reasonable prices;
• reductions in the borrowing base under the Company's credit facility;
• risks incident to the drilling and operation of natural gas and oil wells;
• future production and development costs;
• the availability of sufficient pipeline and other transportation facilities to carry PDC's production and the impact of these facilities on price;
• the effect of existing and future laws, governmental regulations and the political and economic climate of the United States of America;
• changes in environmental laws and the regulations and enforcement related to those laws;
• the impact of weather and the occurrence of disasters such as fires, floods and other events and natural disasters and governmental responses to such events;
• competition in the oil and gas industry;
• the success of prospect development and property acquisition by the Company;
• the success of the Company in marketing oil and gas;
• the effect of natural gas and oil derivative activities and plans;
• conditions in the capital markets;
• a potential inability to complete the proposed transaction, or unanticipated liabilities assumed as a result of, or other problems with, the proposed transaction;
• losses possible from pending or future litigation; and
• the success of strategic plans, expectations and objectives for future operations of the Company.

Further, PDC urges you to carefully review and consider the cautionary statements made in this press release, the Item 1-A Risk Factors in the 2011 annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission ("SEC") on March 1, 2012, the quarterly report on Form 10-Q for the quarter ended March 31, 2012, filed with the SEC on May 10, 2012, and other filings with the SEC for further information on risks and uncertainties that could affect the Company's business, financial condition and results of operations, which are incorporated by this reference as though fully set forth herein. The Company cautions you not to place undue reliance on forward-looking statements, which speak only as of the date made.  PDC undertakes no obligation to update any forward-looking statements in order to reflect any event or circumstance occurring after the date of this release or currently unknown facts or conditions or the occurrence of unanticipated events. All forward looking statements are qualified in their entirety by this cautionary statement.

CONTACT: Lance Lauck
         Senior Vice President, Corporate Development
         303-831-3941
         [e-mail]
         
         Ron Wirth
         Director of Investor Relations
         303-860-5830
         [e-mail]