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PDC Energy focuses its exploration, development and production efforts in three geographic areas: in Colorado within the liquid-rich Core Wattenberg Field, in Texas within the Delaware Basin and in Ohio in the condensate and wet gas windows of the Utica Shale play.

Wattenberg Field, DJ Basin, Weld County, Colorado

The Wattenberg Field represents PDC’s largest asset with over 92% of the Company’s 2015 production and 99% of its year-end 2015 proved reserves. The Company has approximately 96,000 net acres in the core area making PDC the third largest leaseholder, as well as producer, in the Core Wattenberg. The Company is actively developing this liquid-rich field through horizontal drilling in the Niobrara and Codell formations. As of year-end 2015, the Company estimates that it has 2,150 gross proved undeveloped and probable horizontal locations (~4,700' average lateral length) in the Wattenberg Field.

Unique Geological Setting of Core Wattenberg Field

The Wattenberg Field is one of the top rate-of-return horizontal oil plays in the U.S. Onshore. PDC has successfully drilled 20 horizontal wells a 640-acre section, in an effort to more efficiently capture the large oil and gas resources in-place in the Niobrara and Codell formations, which contain over 300 feet of combined reservoir rock. The Company continues to test tighter spacing in an effort to further increase recovery of the resources in-place and add to its multi-year development inventory. The Core Wattenberg Field is a well-defined area north of Denver that owes its prolific productivity to its unique geologic setting. The Core overlies an area of crustal basement rock weakness, which is limited in geographic extent. This crustal weakness allowed unusually high heat flow from deeper mantle sources to “super-heat” the highly organic Niobrara source rocks, which in turn generated the significant oil and gas deposits now contained in the Niobrara and Codell formations. The crustal basement weakness extends southwesterly of Wattenberg beneath the Rocky Mountains, where the same high heat flow system has contributed to extensive mineral deposits. This southwest extension is commonly known as the Colorado Mineral Belt, because of the World Class deposits of gold, silver and molybdenum.

The Company continues to experience tremendous drilling success and is focused in the Middle core area of the field. The per well estimated ultimate recovery (EUR) is 490 thousand barrels of oil equivalent (“MBoe”) for a standard reach lateral (“SRL”) (~4,200’), 685 MBoe for a mid-reach lateral (“MRL”) (~6,900’) and 850 MBoe for an extended reach lateral (“XRL”) (~9,500’). The majority of wells to date were drilled with standard horizontal laterals of 4,000’ to 4,500’ and were typically completed with 20 frac stages per lateral.

The Company continually pursues additional capital efficiencies designed to improve economic returns. These enhancements include tighter frac spacing, use of plug-n-perf completions and mono-bore drilling. The Company’s 2016 drilling program includes the aforementioned standard- and mid-reach laterals, as well as its first two-mile lateral wells, or XRLs.

Delaware Basin, West Texas 

In December 2016, PDC acquired a substantial acreage position of approximately 57,000 net acres in the Delaware Basin – primarily in Reeves County with approximately 16,000 acres in Culberson County. At the time of acquisition, there were 25 horizontal wells producing approximately 7,000 Boe/d net and the acreage was approximately 30% held-by-production. The Company was running two drilling rigs as of closing that were expected to focus primarily on drilling single Wolfcamp wells to hold acreage. The Company was drilling its first two-well pad for the Wolfcamp A and B benches in its Central acreage block as well as completing its first horizontal wells that were spud in September and October of 2016.

Robust Inventory Potential in the Basin's ~3,000' Thick Gross Interval

The Delaware Basin has a potential pay zone that is around 3,000 feet thick from the top of the Bone Spring and Avalon Shale to the base of the lower Wolfcamp. PDC believes its assets in the Basin can provide drilling rates of return that can compete with results in its core Wattenberg. The Company’s acquisition analysis identified 710 locations across the leasehold that the Company divided into Eastern, Central and Western acreage blocks. The majority of the locations – 410 – are in the Eastern block, 260 are in the Central, with 40 in the Western block. Four hundred locations are in the Wolfcamp A, 230 in the Wolfcamp B and 80 are in the Wolfcamp C.

Utica Shale, Southeast Ohio

PDC has approximately 65,000 net acres in the Utica shale play in southeast Ohio. The Company’s acreage is very well positioned in the wet gas and condensate windows of the play. PDC continues to be encouraged from all drilling, geological and production data that the Company has gathered to date. The company acquired 119 square miles of seismic over a large area of its southern Utica acreage.

The Company is planning to drill and complete five wells in the Utica Shale in 2016 and remains committed to the strong resource in the condensate and wet gas windows of the play. These wells will test completion designs in Washington County, well orientation in Noble County, and lateral length efficiencies in Guernsey County.