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Exhibit 10.22

Separation Agreement

This Separation Agreement (the “Agreement”) is made and entered into this 8th
day of February, 2008 by and between Petroleum Development Corporation, a Nevada
Corporation (the “Company”), and Thomas E. Riley (the “Employee”) (collectively,
the “Parties”).

WHEREAS, the Parties acknowledge that on December 20, 2007 the Board of
Directors of the Company (the “Board”) selected a successor for Steven R.
Williams upon his retirement as Chief Executive Officer and authorized the
successor to determine what changes he wanted to make to the executive
leadership team of the Company.

WHEREAS, after further evaluation of these changes, the Company has determined
that the Employee would best serve the Company in the role of Executive Vice
President;

WHEREAS, the Parties acknowledge that the Employee does not wish to serve in the
capacity of Executive Vice President of the Company;

WHEREAS, Employee desires to terminate his employment with the Company pursuant
to the “Good Reason” provisions of his Employment Agreement and has given
written notice of his intention to terminate his employment with the Company
unless he continues in the capacity of President of the Company;

WHEREAS, the Company has advised the Employee that it does not intend to
reconsider the actions taken with respect to Employee;

WHEREAS, the Parties desire to entire into a definitive agreement to set forth
the terms of Employee’s separation from the Company;

NOW THEREFORE, in consideration of the premises and mutual covenants and
obligations set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged and accepted, the
parties hereto, intending to be legally bound, agree as follows:

1.   Termination Date.  Employee resigns his employment and his position as
President and as a member of the Board effective as of March 9, 2008 (the
“Termination Date”). The Parties acknowledge that his resignation is due to
“Good Reason” as defined under his Employment Agreement.

2.   Nondisparagement.  Employee agrees not to make negative comments or
otherwise disparage the Company or its officers, directors, employees,
shareholders or agents, in any manner likely to be harmful to them or their
business, business reputation or personal reputation. The Company agrees that
the members of the Board and officers of the Company as of the date hereof will
not, while employed by the Company or serving as a director of the Company, as
the case may be, make negative comments about the Employee or otherwise
disparage the Employee in any manner that is likely to be harmful to the
Employee’s business or personal reputation. The foregoing shall not be violated
by truthful statements in response to legal process or required governmental
testimony or filings, and the foregoing limitation on the Company’s directors
and officers will not be violated by statements that they in good faith believe
are necessary or
 
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appropriate to make in connection with performing their duties for or on behalf
of the Company.  Either Party will be entitled to execute the remedies provided
for in Section 6.e. of the Employment Agreement.

3.   References.  The President of the Company shall provide employment
references when requested by Employee and all such references shall characterize
Employee’s separation as voluntary.

4.   Compensation and Benefits.

(a)  
The Company shall pay to Employee the following amounts:

(1)   
Separation Compensation. Within thirty (30) days after the Termination Date or
seven (7) days after the Revocation Date (as defined in Section 11 below)
without revocation, whichever is greater, the Company shall pay to the Employee
a lump sum amount of $1,877,343, such amount is acknowledged by the Parties as
being in full satisfaction of the amount due to Employee pursuant to Section
7(d) of his Employment Agreement; providing for three times the sum of: (a) the
Employee’s highest Base Salary during the previous two years of employment
immediately preceding the Termination Date, plus (b) the highest Bonus paid to
the Employee during the same two year period.

(2)   
Compensation and Bonus.  Employee will be entitled to receive his full
compensation earned in 2008 prior to the Termination Date paid in accordance
with the Company’s normal payroll practices.  Such payment is based on a Base
Salary of $315,000 for 2008.  Employee will also be entitled to receive the
benefit earned by him under the Short-Term Incentive Compensation program for
2007.  The parties agree that such amount under the Short-Term Incentive
Compensation program shall be $310,781, payable at the same time as the amounts
noted in Section 4(a)(1) above. If the earnings part of the 2007 bonus
calculation under the percent (50%) for the other executive officers (“Excess
Amount”), Employee will receive a lump sum payment within thirty days after such
determination, equal to four (4) times the amount of the additional bonus amount
attributable to the Excess Amount.

(3)   
Expense Reimbursement.  Company shall pay to the Employee any unpaid expense
reimbursement for periods on or prior to the Termination Date upon presentation
by the Employee of an accounting of such expenses in accordance with normal
Company practices. Employee agrees to submit all unpaid expense reimbursements
to the Company by April 10, 2008. In no event shall such expense reimbursements
be made later than April 30, 2008. The Parties acknowledge that Employee will
not be entitled to any expense reimbursements (including, but not limited to,
reimbursements for costs of premiums on Employee’s one million dollar life
insurance policy

 
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and reimbursements for the cost of the Employee’s current disability policy) for
any expenses incurred on or after the Termination Date.

(4)   
Option to Purchase Automobile and Computer.  Employee shall have an option to
purchase the automobile and computer currently furnished to him by the Company
for $13,185 and $500, respectively. The computer shall be cleaned of all Company
information by Company’s IT department prior to delivery. Full payment shall be
due to the Company on or before February 28, 2008.

(5)   
Stock Options and Restricted Stock.  Company agrees that all unvested Company
stock options and restricted stock shall be vested on the Termination
Date.  Company acknowledges that Four Thousand Six Hundred and Seventy Eight
(4,678) stock options shall become fully vested and Sixteen Thousand One Hundred
Twenty Three (16,123) shares of restricted stock shall become fully vested.

(6)   
Performance Shares.  Company shall deliver to Employee as soon as practicable
after the Termination Date, Three Thousand Seventy Eight (3,078) shares of
Company stock in satisfaction of amounts due to Employee under Section 2.3 of
the Company’s 2007 Long-Term Incentive Program. Employee acknowledges that such
shares are his full entitlement from the Seven Thousand Six Hundred Ninety-Four
(7,694) performance shares award under the 2007 Long-Term Incentive Program.

(7)   
Retirement Payment.  Company shall pay Employee the Retirement Payment earned
under Section 4.c. of the Employment Agreement. The Retirement Payment shall be
paid in ten (10) annual installments on the first business day of January each
year, beginning January 2, 2009. The annual retirement payment shall be $37,500,
which amount is acknowledged by the Parties as being equal to $7,500 times the
number of completed years of service under his Employment Agreement with credit
for a full year of service for 2008 (i.e., five years).

(8)   
COBRA Coverage.  Company shall continue coverage of the Employee and any
dependents covered at the time of termination under the Company’s group health
plans at the Company’s cost for a period equal to the lesser of (i) 18 months or
(ii) such period as the Employee is eligible to participate in another
employer’s health plan.

(9)   
Tax Withholding.  Company will be entitled to withhold from the benefits and
payments described in this Agreement, all income and employment taxes as
directed by Employee, as long as such request meets the minimum required to be
withheld under applicable law. For all vested stock awards, the Company will
withhold the designated income and employment tax amount in shares of Company
Stock.

 
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(10)   
Stock Purchase.  The Company shall purchase from the Employee Fifty Thousand
(50,000) shares of Employee’s Company Stock. Such stock purchase will be made on
the Termination Date. The amount paid for such shares will be based on the
closing market price of the shares on February 8, 2008. In order to comply with
the Exchange Act exemption provided by Rule 16b-3, the Board shall adopt a
resolution providing that the repurchase of the shares will be in accordance
with the terms set forth in this Section and expressly providing that this
resolution has been adopted to comply with Rule 16b-3.

(b)  
Code Section 409A Compliance.  Company represents that this Agreement is
complaint with Internal Revenue Code Section 409A (“Code Section 409A”) and
shall be construed to amend the Employment Agreement entered into between the
Parties in December, 2003 to comply with Code Section 409A. For purposes of this
Agreement and the Employment Agreement:

 
(1)  
"Change of Control" shall have the meaing provided under Treas. Reg. §
1.409-A-3(i)(5).

 
(2)  
“Good Reason” shall have the meaning provided under Treas. Reg. § 1.409A-1(n).
However, the Parties acknowledge that the Company’s thirty (30) day cure period
is waived due to the fact that the Company does not intend to reconsider the
actions taken with respect to Employee.

(3)  
Employee is considered a “specified employee” as such term is defined under Code
Section 409A(a)(2)(B). Payment of those amounts considered nonqualified deferred
compensation under Code Section 409A, including those amounts payable under
Section 4(a)(7) of this Agreement, shall not be made until at least six (6)
months following the Employee’s separation from service of the Company (or, if
earlier, the date of death of Employee).

(4)  
It is intended that amounts payable under paragraphs (1), (2), (3), (5), (6) and
(8) of Section 4(a) shall not be considered nonqualified deferred compensation
under Code Section 409A.

5.   Qualified Retirement Plan.  As of the date hereof, Employee had a vested
account balance in the Company’s qualified retirement plan. Employee shall be
entitled to such vested account balance under the Company’s qualified retirement
plan upon processing the appropriate distribution forms following his
separation. Such vested account balance shall include Employee’s share of the
2007 Company contribution and Employee’s 401(k) deferrals through his
Termination Date, all as adjusted for earnings to the date of distribution.
 
6.   Confidential Material and Employee Obligations.  Employee acknowledges the
validity of the confidentiality, non-solicitation and non-compete provisions
found in Section 6 of his Employment Agreement and the remedies called for
therein. Employee agrees to abide by the terms of Section 6 of his Employment
Agreement, provided that if, during the period specified in

 
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Section 6d. of his Employment Agreement Employee notifies the Company of either
an employment or business opportunity he intends to pursue, the Company has five
(5) days to object. If the Company fails to object within the five (5) day
period, Employee is free to pursue the employment or business opportunity,
provided further that any objection by the Company shall not be unreasonable.
 
7.   Return of Property.  On or before the Termination Date, Employee will
return to the Company all of the Company’s property in his possession. The
Company’s property includes, without limitation, privileged information,
reports, files, memoranda, correspondence, door and file keys, identification
cards, credit cards, computer access codes, computer programs, software and
hardware, customer and client lists or information and other property or
material which he prepared or helped to prepare or to which he had access
including any reproductions thereof.
 
8.   Cooperation with Investigations.  Employee agrees to cooperate fully with
the Company and its attorneys in connection with any investigation or litigation
relating to any Company matter in which Employee was involved, provided advice
or has knowledge and will be reimbursed for Employee’s expenses and time at a
mutually agreed rate. The Company will consult with Employee and make reasonable
efforts to schedule any of Employee’s time required under this Section 8 so as
not to materially disrupt Employee’s business and personal affairs, and the
Company will reimburse Employee for reasonable direct expenses incurred by him
in so complying. The Company agrees to promptly notify Employee, unless
precluded by law, in the event the Company has knowledge that Employee is named
or will be involved in any legal or regulatory proceeding, and the Company will
designate an individual at the Company who will serve as Employee’s point of
contact in the matter.
 
9.   Other.

(a)  
This Agreement shall be construed and enforced pursuant to the laws of the State
of West Virginia without giving effects to its conflict of laws. If any
provision hereof is declared to be unenforceable by a court of law, such
provision shall be fully severable, and this Agreement shall be construed and
enforced as if such unenforceable provision had never comprised a part hereof,
the remaining provisions hereof shall remain in full force and effect, and the
court construing the Agreement shall add as a part hereof a provision as similar
in terms and effect to such unenforceable  provision as may be enforceable, in
lieu of the unenforceable provision.

(b)  
This Agreement sets forth the entire agreement between the parties hereto, and
fully supersedes any and all prior oral or written agreements between the
parties pertaining to the subject matter hereof.

(c)  
All notices, requests, demands or other communications under the Agreement will
be in writing and shall be deemed to have been duly given when delivered in
person or deposited in the United States mail, postage prepaid, by registered or
certified mail, return receipt requested, to the party to whom such notice is
being given as follows:

 
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As to Thomas E. Riley:
 
Thomas E. Riley
P. O.  Box 4471
Clarksburg, West Virginia 26302
         
As to the Company:
 
Petroleum Development Corporation
120 Genesis Boulevard
Bridgeport, West Virginia 26330

10.   Waiver and Release.  In consideration of the Company’s obligations as set
forth above.  Employee hereby releases, acquits and forever discharges Company
and each of its subsidiaries and affiliates and each of their respective
officers, employees, directors, successors and assigns from any and all claims,
actions or causes of action in any way related to her employment with the
Company or the termination thereof, whether arising from tort, statute or
contract, including but not limited to, claims of defamation, claims arising
under the Employee Retirement Income Security Act of 1974, as amended, the Age
Discrimination in Employment Act of 1967, as amended by the Older Workers
Benefit Protection Act of 1990, Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act, the Family and Medical Leave Act,
the discrimination and wage payment laws of West Virginia and any other federal,
state or local statutes or ordinances of the United States, it being Employee’s
intention and the intention of the Company to make this release as broad and as
general as the law permits.  Employee understands that this Agreement does not
waive any rights or claims that may arise after his execution of it and does not
apply to claims arising under the terms of this Agreement.

11.    Knowing and Voluntary Consent.   Employee agrees that the consideration
to which he is entitled as a result of this Agreement exceeds the consideration
to which Employee would otherwise have been entitled, and is sufficient to make
this Agreement fully enforceable.

Employee acknowledges that he was provided a period of at least twenty-one (21)
days to consider this Agreement and that his signature on this Agreement prior
to the expiration of the twenty-one (21) days shall constitute a waiver of the
remainder of the twenty-one (21) day consideration period. Employee further
acknowledges that he has a period of seven days following the date that he signs
below to revoke this Agreement by delivering a written revocation to the Company
at the address below by the end of business on the seventh day of the revocation
period (“Revocation  Date”).  In the event of revocation, the Company’s
obligations under this Agreement will be void.

Employee acknowledges that he has been encouraged, and has had a full
opportunity, to consult with an attorney of his choosing in reviewing this
Agreement, and Employee has had a reasonable time within which to review and
consider it. Employee acknowledges that: (a) this Agreement is written in terms
and set, forth conditions in a manner which he understands; (b) he has carefully
read and understands all of the terms and conditions of this Agreement; (c) he
agrees with the terms and conditions of this Agreement; (d) the payment to be
made to him pursuant to this Agreement is not something to which he is entitled
except as consideration for this Agreement; and (e) he enters into this
Agreement knowingly and voluntarily.

 
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IN WITNESS WHEROF, the Company and the Employee have duly executed this
Separation Agreement as of this 8th day of February, 2008.

Company
 
Employee
     
Petroleum Development Corporation
   
By:  /s/ Steven R. Williams
 
/s/ Thomas E. Riley
   
Thomas E. Riley

 
 
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