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PDC Energy Reports Year-End 2012 Proved Reserve Increase To Nearly 1.2 Tcfe; Reserve Replacement Of 512%; Increase In Proved Reserve Liquids Mix To 48%; Increase Of PV-10 Value Of Proved Reserves To $1.7 Billion; And Increase In 3P Reserves Of Over 70% To 3.6 Tcfe

Stocks in this article: PDCE

DENVER, Feb. 5, 2013 (GLOBE NEWSWIRE) -- PDC Energy, Inc. ("PDC" or the "Company") (Nasdaq:PDCE) today reported 2012 key operating results including year-end reserves and production.

2012 Proved Reserves

Total proved reserves as of December 31, 2012 increased 14% to nearly 1.16 trillion cubic feet equivalent ("Tcfe"), from 1.02 Tcfe reported as of December 31, 2011. Reserve replacement from all sources was 512% of 2012 production. Proved developed ("PD") reserves decreased to 42% of total reserves as of December 31, 2012 compared to 46% of total reserves as of December 31, 2011. The slight decrease in PD reserves was attributable to the Company's large addition of proved undeveloped ("PUD") reserves in the liquid-rich Wattenberg Field in 2012, primarily in the horizontal Niobrara.

Proved reserves at year-end 2012 were comprised of approximately 52% natural gas and 48% liquids compared to year-end 2011 proved reserves, which were comprised of 66% natural gas and 34% liquids. The significant increase in the percent of liquids as of December 31, 2012 reflects both strong reserve growth in the liquid-rich Wattenberg Field and the removal of all PUD reserves in the Piceance, NECO and upper Devonian gas fields due to downward SEC price-related revisions of natural gas as of December 31, 2012. The Company's 2012 year-end proved reserves include very minimal contributions from horizontal Codell development in the Wattenberg Field and do not include anticipated future contributions from PDC's emerging liquid-rich Utica Shale position.

The Company's PV-10 value of proved reserves increased 27% to approximately $1.71 billion at December 31, 2012, from $1.35 billion at December 31, 2011, primarily driven by reserve additions in the liquid-rich Wattenberg Field, particularly from the horizontal Niobrara program and the June 2012 acquisition of assets from Merit Energy.

The Company's independent reserve engineers, Ryder Scott Company, L.P., completed their estimate of PDC's year-end 2012 proved reserves in accordance with SEC guidelines. Reserve values in 2012 were calculated utilizing NYMEX prices on SEC parameters of $2.76 per million British Thermal Units ("MMBtu") for natural gas and $94.71 per barrel ("Bbl") for crude oil, resulting in future average realized prices of $2.35 per thousand cubic feet ("Mcf") for natural gas, $87.51 per Bbl for crude oil, and $28.02 per Bbl for natural gas liquids ("NGLs"), after adjustments for energy content, quality, midstream fees and basis differentials. This compares to future average realized prices utilized for our year-end 2011 proved reserves of $3.41 per Mcf for natural gas, $88.94 per Bbl for crude oil, and $39.59 per Bbl for NGLs.

                          2012 Proved Reserves Summary                     
                                             Reserves     PV-10    PV-10   
                                              (Bcfe)      ($MM)   ($/Mcfe) 
  Beginning balance, at December 31, 2011       1,016    $1,350      $1.33 
  Drilling, improved well performance and                               
   pricing revisions                               56                   
  Acquisitions                                    200                   
  Divestitures                                    (65)                                                                                      
  Production                                      (50)                   
  Ending balance, at December 31, 2012          1,157    $1,709      $1.48                   

During 2012, PDC added 56 billion cubic feet equivalent ("Bcfe") of proved reserves through a combination of drilling, improved well performance and pricing revisions. The 56 Bcfe includes the benefit of increased well density on PUD reserves in the horizontal Niobrara and the removal of all the Company's PUD reserves in the Piceance, NECO and upper Devonian gas fields. In addition, the Company added 200 Bcfe of proved reserves from its acquisition of core Wattenberg assets in June 2012. Proved reserves decreased by 65 Bcfe in 2012 due to the divestiture of the Company's Permian Basin assets along with other non-core assets.

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