2010-06-09-2010-06-08

To purchase 5,500 net acres in Wattenberg Field in Weld Co., CO.

Independent E&P company Petroleum Development Corp., Denver, (Nasdaq: PETD) will purchase 5,500 net acres in Wattenberg Field from an undisclosed seller for an undisclosed price, increasing its acreage position in the Wattenberg Niobrara trend, Colorado, to approximately 70,000 net acres.

The acquired acreage is in Weld County, roughly 10 miles northeast of the company's Wattenberg operations. Of the company's aggregate net acreage, approximately 92% will be held by production.

Prior to its 2011-2012 horizontal-drilling program on its existing Wattenberg properties, Petroleum Development expects to spud its first horizontal Niobrara well on the new leasehold in fourth-quarter 2010.

Petroleum Development chief executive Richard McCullough is encouraged by recently released horizontal Niobrara results in Wattenberg Field. "These early results also indicate horizontal potential for sections previously drilled vertically…Increasing our position in this play adds additional oil- and NGL-rich gas production potential to our asset portfolio."

The deal is expected to close on June 25.

Wachovia senior analyst David Tameron projects that the horizontal Niobrara could "represent meaningful upside potential for Petroleum Development."

Using recent data from key player Noble Energy Inc. (NYSE: NBL), Tameron notes that at 5% recovery factors, the Niobrara play has an estimated ultimate recovery of 110 million barrels of oil equivalent, which would nearly double Petroleum Development's current reserve base of approximately 120 million barrels equivalent.

The analyst also notes that recent Niobrara transactions have come in at $500 to $1,000 per acre, translating to a price of approximately $2.75 million to $5.5 million.

Petroleum Development holds oil and gas interests in the Rockies, Appalachian and Michigan Basin regions.