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PDC Energy focuses its exploration, development and production efforts in two geographic areas: in Colorado within the liquid-rich Core Wattenberg Field and in Texas within the Delaware Basin.

Wattenberg Field, DJ Basin, Weld County, Colorado

The Wattenberg Field represents PDC’s largest asset with over 94% of the Company’s 2016 production and 89% of its year-end 2016 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 2016, the Company estimates that it has 1,800 gross horizontal future drilling locations 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 the equivalent of 20-22 horizontal wells per 640-acre section, 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 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 Kersey Area of the Middle core of the field. The per well estimated ultimate recovery (EUR) in the Kersey Area is 490 thousand barrels of oil equivalent (“MBoe”) for a standard reach lateral (“SRL”) (~4,200’), 800 MBoe for a mid-reach lateral (“MRL”) (~6,900’) and 1,100 MBoe for an extended reach lateral (“XRL”) (~9,500’).

The Company continually pursues additional capital efficiencies designed to improve economic returns. These enhancements include tighter completion spacing and exclusive use of “plug-n-perf” completions and mono-bore drilling. In 2017, the Company plans to decrease the distance between completion stages on its standard completions from 200-225’ to 170’, as well as test even tighter completion spacing. The 2017 capital investment program is contemplating drilling wells with each of these well designs, with an increasing emphasis on longer reach lateral well development.

Delaware Basin, West Texas 

In December 2016, PDC acquired a substantial acreage position of approximately 62,500 net acres in the Delaware Basin – approximately 43,050 acres in Reeves County and 19,450 acres in Culberson County. Production in the first quarter of 2017 averaged approximately 6,810 Boe/day net. The acreage was approximately 30% held-by-production at year-end 2016. The Company was running two drilling rigs at year-end and added a third in late February 2017 and a fourth in April. One rig contract concludes in the third quarter. The drilling in 2017 is focused primarily on drilling single Wolfcamp wells in the A or B benches to hold acreage.

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

The Delaware Basin has gross potential pay interval that is around 3,000 feet thick from the top of the Bone Spring and Avalon Shale to the base of the lower Wolfcamp. The Company’s acquisition analysis identified 785 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, 335 are in the Central, with 40 in the Western block. Across these areas, 425future drilling locations are in the Wolfcamp A, 255 are in the Wolfcamp B,and 105 are in the Wolfcamp C.

Utica Shale, Southeast Ohio

PDC has approximately 62,450 net acres in the Utica shale play in southeast Ohio as of year-end 2016. To focus corporate resources on its premier Wattenberg and Delaware assets, the Company announced in April that it will seek to monetize its Utica assets in 2017.

The Company is not planning to drill in the Utica Shale in 2017, while it is seeking to monetize these assets.