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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

The following table provides PDC's 2012 and 2011 total proved reserves ("1P") by major operating area:

    Total Proved Reserves (1P) at December 31,     
                    Total Proved Reserves (1P)
                          2011       2012
                         -----      -----
  Wattenberg               459        894
  Appalachia               135        179
  Piceance                 322         66
  NECO                      35         18                        
  Permian                   65         --
                         -----      -----                         
           Total:        1,016      1,157
                         =====      =====

2012 Proved, Probable and Possible Reserves ("3P")

PDC's internal estimate of 3P reserves increased from 2.1 Tcfe at December 31, 2011 to 3.6 Tcfe at December 31, 2012 with an estimated 51% liquids and 49% natural gas mix. The substantial increase in the Company's 3P reserves is primarily related to increased horizontal density Niobrara and Codell development potential in the liquid-rich Wattenberg Field. The Company's 3P reserves include anticipated future contributions from only two currently completed wells in PDC's emerging liquid-rich Utica shale position and approximately half of its potential Horizontal Marcellus locations.

2012 Production and Activity

Total 2012 net production from continuing operations increased over 10% from 2011 to approximately 49.6 Bcfe. As previously disclosed, the Company's 2012 production in the Wattenberg Field was negatively impacted by high line pressures from its primary midstream provider. The average daily exit rate for net production in December 2012 was 143 million cubic feet equivalent ("MMcfe"), which was comprised of 63% natural gas, 27% crude oil and 10% NGLs.

The Company drilled 44 gross wells in 2012. The Company's 2012 operating focus was primarily in the Wattenberg Field where PDC drilled 28 horizontal Niobrara wells and 9 horizontal Codell wells, performed 83 refrac/recomplete projects, and participated in 19 non-operated drilling projects.

In the liquid-rich Utica Field, PDC drilled two horizontal wells and one vertical test well. The first horizontal Utica well, the Onega Commissioners #14-25H, recently flow tested through tubing at a peak rate of 1,796 barrels of oil equivalent per day on a 26/64" choke. The Onega Commissioners well was turned online for condensate sales in mid-January to collect production data and evaluate well performance. The Company's second horizontal well, the Detweiler 42-3H, is in its 60-day resting period and expected to be flowed back in mid-to-late February, 2013.

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