Petroleum Development Adds to Crude Oil Commodity Options

Petroleum Development Corporation reported that the Company has reset and added to previously published natural gas commodity derivative positions to protect against possible price instability in future periods.

For the period from April 2008 through October 2008 the Company replaced the collars that it previously set with fixed-price swaps. A Nymex based swap of $8.33/Mmbtu replaced a $6.50/Mmbtu floor and a $10.80/Mmbtu call for approximately 34% of production in the Appalachian and Michigan basins. A Nymex based swap of $8.58/Mmbtu replaced a $7.00/Mmbtu floor and a $13.00/Mmbtu call for another 34% of production in the Appalachian and Michigan basins. A Panhandle Eastern (PEPL) based swap of $7.45/Mmbtu replaced a $5.50/Mmbtu floor and a $9.85/Mmbtu call and a $6.00/Mmbtu floor and a $11.25/Mmbtu call for approximately 45% of production in the NECO basin. A Colorado Interstate (CIG) based swap of $7.05/Mmbtu replaced a $5.50/Mmbtu floor and a $10.35/Mmbtu call for approximately 45% of production in the Piceance and Wattenberg basins.

For the period from November 2008 through March 2009 the Company entered into collars for 20% of the production and swaps for 20% of the production from each of the following basins: Appalachian, Michigan, NECO, Piceance and Wattenberg. For the Appalachian and Michigan basins, the Company set a Nymex based participating collar with an $8.40/Mmbtu floor and a $13.05/Mmbtu call along with a Nymex based swap of $9.615/Mmbtu. For the NECO basin, the Company set a PEPL based collar with a $7.25/Mmbtu floor and a $10.05/Mmbtu call along with a PEPL based swap of $8.44/Mmbtu. For the Piceance and Wattenberg basins, the Company set a CIG based collar with a $7.00/Mmbtu floor and a $9.70/Mmbtu call along with a CIG based swap of $8.18/Mmbtu.

For the three year period from March 2008 through February 2011 the Company entered into a Nymex based swap at $8.62/Mmbtu for approximately 74% of production from the recent Appalachian acquisition of the Castle Gas Company.

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Brent Crude Oil : $50.56/BBL 0.15%
Light Crude Oil : $47.7/BBL 0.70%
Natural Gas : $3.05/MMBtu 1.32%
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