NEWS From Petroleum Development Corporation
FOR IMMEDIATE RELEASE: May 9, 2008
CONTACT: Celesta Miracle - (304) 842-3597 http://www.petd.com
Petroleum Development Corporation:
Increases 2008 Capital Budget
Resets and Adds to Natural Gas and Oil Commodity Positions
Schedules Investor Conference Call for May 13, 2008 at 1:00 p.m. (ET)
Bridgeport, West Virginia. Petroleum Development Corporation (NASDAQ/GSM: PETD) (PDC) today announced that its Board of Directors has approved a $40 million increase to its 2008 capital budget, bringing the revised 2008 capital budget to $295 million. This 15.7% increase in the capital budget will enable the Company to operate a third rig in the Grand Valley field with the plan to increase drilling for this field to 62 gross (56 net) wells up from 42 gross (36 net) wells.
Natural Gas and Oil Commodities
The Company reset and added to previously published natural gas and oil commodity derivative positions to protect against price instability in future periods, as follows:
| · | For the period from November 2008 through March 2009, the Company replaced a participating PEPL collar with a swap. A PEPL based collar with a floor of $6.75/Mmbtu and a call of $10.05/Mmbtu was replaced by a PEPL swap net of all unwinding collar costs of $8.09/Mmbtu. This collar covers approximately 27% of production for the NECO properties. |
| · | For the period from November 2008 through March 2009, the Company replaced a participating CIG collar with a swap. A CIG based collar with a floor of $6.50/Mmbtu and a call of $10.15/Mmbtu was replaced by a CIG swap net of all unwinding collar costs of $7.76/Mmbtu. This collar covers approximately 35% of production in the Grand Valley and Wattenberg fields. |
| · | For the period from April 2009 through March 2012, the Company set Nymex based gas swaps at $9.885/Mmbtu for approximately 10% of gas production in the Appalachian and Michigan Basins. |
| · | For the period from June 2008 through December 2008, the Company set Nymex based oil swaps at $108.05/Bbl for approximately 34% of oil production in the Wattenberg field. For the calendar year 2009, the Company set Nymex based oil swaps at $117.35/Bbl for approximately 11% of oil production in the Wattenberg field. |
| · | For the calendar year 2010, the Company replaced two costless Nymex oil collars with swaps. A Nymex based collar with a floor of $70.00/Bbl and a call of $102.25/Bbl was replaced by a Nymex based oil swap net of all unwinding costs of $92.74/Bbl. A Nymex based collar with a floor of $70.00/Bbl and a call of $103.00/Bbl was replaced by a Nymex based oil swap net of all unwinding costs of $93.17/Bbl. These swaps cover approximately 51% of oil production in the Wattenberg field. |
The natural gas and oil production percentages hedged, noted in the above paragraphs, are based on current production. These percentages should decrease in future months as the Company adds additional production from new drilling.
The table below presents the Company's derivative positions in effect as of May 9, 2008, including those identified above, by area of operation. The gross volumes reflect the total volumes hedged for the Company and its affiliated partnerships jointly. The net amounts represent the Company's share of production. Please be aware that the Company’s share of production can change based upon the production volumes and the Company’s interest in specific wells.
| | | | | Floors | Ceilings | Swaps (Fixed Prices) |
| Month Set | Month | Gross Monthly Quantity Mmbtu/Bbls | PDC % | PDC Net Monthly Quantity Mmbtu/Bbls | Floor Price | PDC Net Monthly Quantity Mmbtu/Bbls | Ceiling Price | PDC Net Monthly Quantity Mmbtu/Bbls | Price |
Colorado Interstate Gas (CIG) Based Derivatives (Piceance Basin) |
| Feb-08 | 04/08-10/08 | 750,000 | 60.6% | | | | | 454,650 | $ 7.05 |
| Jan-08 | 04/08-10/08 | 630,000 | 60.6% | | | | | 381,906 | $ 6.54 |
| Apr-08 | 11/08-03/09 | 570,000 | 60.6% | | | | | 345,534 | $ 7.76 |
| Feb-08 | 11/08-03/09 | 340,000 | 60.6% | 206,108 | $ 7.00 | 206,108 | $ 9.70 | | |
| Feb-08 | 11/08-03/09 | 340,000 | 60.6% | | | | | 206,108 | $ 8.18 |
| Jan-08 | 04/09-10/09 | 570,000 | 60.6% | 345,534 | $ 5.75 | 345,534 | $ 8.75 | | |
| Mar-08 | 04/09-10/09 | 560,000 | 60.6% | 339,472 | $ 5.75 | 339,472 | $ 9.05 | | |
Nymex Based Derivatives (Appalachian and Michigan Basins) |
| Feb-08 | 04/08-10/08 | 170,000 | 73.4% | | | | | 124,763 | $ 8.33 |
| Feb-08 | 04/08-10/08 | 170,000 | 73.4% | | | | | 124,763 | $ 8.58 |
| Mar-08 | 11/08-03/09 | 170,000 | 73.4% | 124,763 | $ 9.00 | 124,763 | $ 11.32 | | |
| Feb-08 | 11/08-03/09 | 100,000 | 73.4% | 73,390 | $ 8.40 | 73,390 | $ 13.05 | | |
| Feb-08 | 11/08-03/09 | 100,000 | 73.4% | | | | | 73,390 | $ 9.615 |
| Jan-08 | 04/09-10/09 | 170,000 | 73.4% | 124,763 | $ 6.75 | 124,763 | $ 12.45 | | |
| Mar-08 | 04/09-10/09 | 170,000 | 73.4% | 124,763 | $ 7.50 | 124,763 | $ 13.25 | | |
| May-08 | 04/09-03/12 | 60,000 | 73.4% | | | | | 44,034 | $ 9.885 |
Nymex Based Derivatives (Appalachian Acquisitions) |
| Feb-08 | 03/08-02/11 | 90,000 | 100% | | | | | 90,000 | $ 8.62 |
Panhandle Based Derivatives (NECO) |
| Feb-08 | 04/08-10/08 | 180,000 | 100% | | | | | 180,000 | $ 7.45 |
| Jan-08 | 04/08-10/08 | 120,000 | 100% | | | | | 120,000 | $ 6.795 |
| Apr-08 | 11/08-03/09 | 110,000 | 100% | | | | | 110,000 | $ 8.09 |
| Feb-08 | 11/08-03/09 | 80,000 | 100% | 80,000 | $ 7.25 | 80,000 | $ 10.05 | | |
| Feb-08 | 11/08-03/09 | 80,000 | 100% | | | | | 80,000 | $ 8.44 |
| Jan-08 | 04/09-10/09 | 110,000 | 100% | 110,000 | $ 6.00 | 110,000 | $ 9.70 | | |
| Mar-08 | 04/09-10/09 | 130,000 | 100% | 130,000 | $ 6.25 | 130,000 | $ 11.75 | | |
Colorado Interstate Gas (CIG) Based Derivatives (Wattenberg Basin) |
| Feb-08 | 04/08-10/08 | 450,000 | 64.3% | | | | | 321,480 | $ 7.05 |
| Jan-08 | 04/08-10/08 | 290,000 | 64.3% | | | | | 211,460 | $ 6.54 |
| Apr-08 | 11/08-03/09 | 320,000 | 64.3% | | | | | 241,460 | $ 7.76 |
| Feb-08 | 11/08-03/09 | 180,000 | 64.3% | 133,590 | $ 7.00 | 133,590 | $ 9.70 | | |
| Feb-08 | 11/08-03/09 | 180,000 | 64.3% | | | | | 133,590 | $ 8.18 |
| Jan-08 | 04/09-10/09 | 320,000 | 64.3% | 241,460 | $ 5.75 | 241,460 | $ 8.75 | | |
| Mar-08 | 04/09-10/09 | 290,000 | 64.3% | 218,600 | $ 5.75 | 218,600 | $ 9.05 | | |
Oil - Nymex Based (Wattenberg Basin) |
| Oct-07 | 01/08-12/08 | 48,667 | 65.2% | | | | | 31,741 | $ 84.20 |
| May-08 | 06/08-12/08 | 36,686 | 65.2% | | | | | 23,927 | $ 108.05 |
| Jan-08 | 01/09-12/09 | 30,417 | 65.2% | | | | | 19,838 | $ 84.90 |
| Jan-08 | 01/09-12/09 | 30,417 | 65.2% | | | | | 19,838 | $ 85.40 |
| May-08 | 01/09-12/09 | 12,167 | 65.2% | | | | | 7,935 | $ 117.35 |
| May-08 | 01/10-12/10 | 30,417 | 65.2% | | | | | 19,838 | $ 92.74 |
| May-08 | 01/10-12/10 | 30,417 | 65.2% | | | | | 19,838 | $ 93.17 |
Investor Conference Call
The Company will host a conference call with investors to discuss its first quarter 2008 results and updated 2008 guidance.
Date/Time: Tuesday, May 13, 2008, at 1:00 p.m. ET
Webcast: Available at PDC’s corporate website: www.petd.com
Conference call only: (877) 407-8031
The Company expects to file its 2008 first quarter report on Form 10-Q, which includes the first quarter 2008 results no later than Monday, May 12, 2008.
About Petroleum Development Corporation
Petroleum Development Corporation (www.petd.com) is an independent energy company engaged in the development, production and marketing of natural gas and oil. Its operations are focused in the Rocky Mountains with additional operations in the Appalachian Basin and Michigan. PDC is included in the S&P SmallCap 600 Index and the Russell 3000 Index of Companies.
Certain matters discussed within this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although PDC believes the expectations reflected in such forward- looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include financial performance, oil and gas prices, drilling program results, drilling results, regulatory changes, changes in local or national economic conditions and other risks detailed from time to time in the Company's reports filed with the SEC, including quarterly reports on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K.
120 Genesis Boulevard • Bridgeport, West Virginia 26330
Phone: (304) 842-3597
