Exhibit 10.1

$500,000,000

PDC ENERGY, INC.

7.750% Senior Notes due 2022

Purchase Agreement

September 28, 2012

J.P. Morgan Securities LLC

As Representative of the

several Initial Purchasers listed

in Exhibit A hereto

c/o J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Ladies and Gentlemen:

PDC Energy, Inc., a Nevada corporation (the “Company”), proposes to issue and
sell to the several initial purchasers listed in Exhibit A hereto (the “Initial
Purchasers”), for whom you are acting as representative (the “Representative”),
$500,000,000 principal amount of its 7.750% Senior Notes due 2022 (the
“Securities”). The Securities will be issued pursuant to an Indenture to be
dated as of October 3, 2012 (the “Indenture”) among the Company and U.S. Bank,
National Association, as trustee (the “Trustee”).

The Securities will be sold to the Initial Purchasers without being registered
under the Securities Act of 1933, as amended (the “Securities Act”), in reliance
upon an exemption therefrom. The Company has prepared a preliminary offering
memorandum dated September 25, 2012 (the “Preliminary Offering Memorandum”) and
will prepare an offering memorandum dated the date hereof (the “Offering
Memorandum”) setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this purchase agreement (the “Agreement”).
The Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum, the other Time of Sale Information (as defined below) and
the Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchasers in the manner contemplated by this
Agreement. References herein to the Preliminary Offering Memorandum, the Time of
Sale Information and the Offering Memorandum shall be deemed to refer to and
include any document

--------------------------------------------------------------------------------

incorporated by reference therein and any reference to “amend,” “amendment” or
“supplement” with respect to the Preliminary Offering Memorandum or the Offering
Memorandum shall be deemed to refer to and include any documents filed after
such date and incorporated by reference therein.

At or prior to the time when sales of the Securities were first made (the “Time
of Sale”), the Company had prepared the following information (collectively, the
“Time of Sale Information”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Exhibit B
hereto.

Holders of the Securities (including the Initial Purchasers and their direct and
indirect transferees) will be entitled to the benefits of a Registration Rights
Agreement, to be dated the Closing Date (as defined below) and substantially in
the form attached hereto as Exhibit C (the “Registration Rights Agreement”),
pursuant to which the Company will agree to file one or more registration
statements with the Securities and Exchange Commission (the “Commission”)
providing for the registration under the Securities Act of the Securities or the
Exchange Securities referred to (and as defined) in the Registration Rights
Agreement.

The Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and resale of the Securities, as follows:

1. Purchase and Resale of the Securities.

(a) The Company agrees to issue and sell the Securities to the several Initial
Purchasers as provided in this Agreement, and each Initial Purchaser, on the
basis of the representations, warranties and agreements set forth herein and
subject to the conditions set forth herein, agrees, severally and not jointly,
to purchase from the Company the respective principal amount of Securities set
forth opposite such Initial Purchaser’s name in Exhibit A hereto at a price
equal to 98.04% of the principal amount thereof plus accrued interest, if any,
from October 3, 2012 to the Closing Date. The Company will not be obligated to
deliver any of the Securities except upon payment for all the Securities to be
purchased as provided herein.

(b) The Company understands that the Initial Purchasers intend to offer the
Securities for resale on the terms set forth in the Time of Sale Information.
Each Initial Purchaser, severally and not jointly, represents, warrants and
agrees that:

(i) it is a qualified institutional buyer within the meaning of Rule 144A under
the Securities Act (a “QIB”) and an accredited investor within the meaning of
Rule 501(a) of Regulation D under the Securities Act (“Regulation D”);

 

2

--------------------------------------------------------------------------------

(ii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and

(iii) it has not solicited offers for, or offered or sold, and will not solicit
offers for, or offer or sell, the Securities as part of their initial offering
except:

(A) within the United States to persons whom it reasonably believes to be QIBs
in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and
in connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A; or

(B) in accordance with the restrictions set forth in Exhibit D hereto.

(c) Each Initial Purchaser acknowledges and agrees that the Company and, for
purposes of the “no registration” opinions to be delivered to the Initial
Purchasers pursuant to Sections 6(g) and 6(i), counsel for the Company and
counsel for the Initial Purchasers, respectively, may rely upon the accuracy of
the representations and warranties of the Initial Purchasers, and compliance by
the Initial Purchasers with their agreements, contained in paragraph (b) above
(including Exhibit D hereto), and each Initial Purchaser hereby consents to such
reliance.

(d) The Company acknowledges and agrees that the Initial Purchasers may offer
and sell Securities to or through any affiliate of an Initial Purchaser and that
any such affiliate may offer and sell Securities purchased by it to or through
any Initial Purchaser; provided, however, that any such affiliate shall be
subject to the same obligations as its affiliated Initial Purchaser hereunder,
and that such Initial Purchaser shall be liable for any breach of those
obligations by such affiliate.

(e) The Company acknowledges and agrees that each Initial Purchaser is acting
solely in the capacity of an arm’s length contractual counterparty to the
Company with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the offering) and not as
a financial advisor or a fiduciary to, or an agent of, the Company or any other
person. Additionally, neither the Representative nor any other Initial Purchaser
is advising the Company or any other person as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company shall consult
with its own advisors concerning such matters and shall be responsible for
making its own independent investigation and appraisal of

 

3

--------------------------------------------------------------------------------

the transactions contemplated hereby, and neither the Representative nor any
other Initial Purchaser shall have any responsibility or liability to the
Company with respect thereto. Any review by the Representative or any Initial
Purchaser of the Company and the transactions contemplated hereby or other
matters relating to such transactions will be performed solely for the benefit
of the Representative or such Initial Purchaser, as the case may be, and shall
not be on behalf of the Company or any other person.

2. Payment and Delivery.

(a) Payment for and delivery of the Securities will be made at the offices of
Davis Polk & Wardwell LLP at 10:00 A.M., New York City time, on October 3, 2012,
or at such other time or place on the same or such other date, not later than
the fifth business day thereafter, as the Representative and the Company may
agree upon in writing. The time and date of such payment and delivery is
referred to herein as the “Closing Date”.

(b) Payment for the Securities shall be made by wire transfer in immediately
available funds to the account(s) specified by the Company to the Representative
against delivery to the nominee of The Depository Trust Company (“DTC”), for the
account of the Initial Purchasers, of one or more global notes representing the
Securities (collectively, the “Global Note”), with any transfer taxes payable in
connection with the sale of the Securities duly paid by the Company. The Global
Note will be made available for inspection by the Representative not later than
1:00 P.M., New York City time, on the business day prior to the Closing Date.

3. Representations and Warranties of the Company. The Company represents and
warrants to each Initial Purchaser that:

(a) Preliminary Offering Memorandum, Time of Sale Information and Offering
Memorandum. The Preliminary Offering Memorandum, as of its date, did not, the
Time of Sale Information, at the Time of Sale, did not, and at the Closing Date,
will not, and the Offering Memorandum, in the form first used by the Initial
Purchasers to confirm sales of the Securities and as of the Closing Date, will
not, contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the
Company makes no representation or warranty with respect to any statements or
omissions made in reliance upon and in conformity with information relating to
any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representative expressly for use in the Preliminary
Offering Memorandum, the Time of Sale Information or the Offering Memorandum.

 

4

--------------------------------------------------------------------------------

(b) Additional Written Communications. The Company (including its agents and
representatives, other than the Initial Purchasers in their capacity as such)
has not prepared, made, used, authorized, approved or referred to and will not
prepare, make, use, authorize, approve or refer to any written communication
that constitutes an offer to sell or solicitation of an offer to buy the
Securities (each such communication by the Company or its agents and
representatives (other than a communication referred to in clauses (i) and
(ii) below) an “Issuer Written Communication”) other than (i) the Preliminary
Offering Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on
Exhibit B hereto, including a term sheet substantially in the form of Exhibit E
hereto, which constitute part of the Time of Sale Information, and (iv) any
electronic road show or other written communications, in each case used in
accordance with Section 4(c). Each such Issuer Written Communication, when taken
together with the Time of Sale Information at the Time of Sale, did not, and at
the Closing Date will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that the Company makes no representation or warranty with respect to
any statements or omissions made in each such Issuer Written Communication in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in any Issuer Written Communication.

(c) Incorporated Documents. The documents incorporated by reference in each of
the Time of Sale Information and the Offering Memorandum, when filed with the
Commission, conformed or will conform, as the case may be, in all material
respects to the requirements of the Exchange Act, and the rules and regulations
of the Commission thereunder, and did not and will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

(d) Financial Statements. The financial statements and the related notes thereto
included or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum present fairly the financial position of the Company
and its consolidated subsidiaries as of the dates indicated and the results of
their operations and the changes in their cash flows for the periods specified;
such financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered thereby; and the other financial information relating to the
Company and its consolidated subsidiaries included or incorporated by reference
in each of the Time of Sale Information and the Offering Memorandum has been
derived from the accounting records of the Company and its consolidated
subsidiaries and presents fairly the information shown thereby. The interactive
data in eXtensible Business Reporting Language included or incorporated by
reference in each of the Preliminary Offering Memorandum, the Time of Sale
Information and the Offering Memorandum fairly presents the information called
for in all material respects and is prepared in accordance with the Commission’s
rules and guidelines applicable thereto.

 

5

--------------------------------------------------------------------------------

(e) Pro Forma Financial Statements. The pro forma financial statements and the
related notes thereto included or incorporated by reference in the Time of Sale
Information and the Offering Memorandum present fairly the information shown
therein, have been prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred to
therein, in each case in all material respects.

(f) No Material Adverse Change. Since the date of the most recent financial
statements of the Company included or incorporated by reference in each of the
Time of Sale Information and the Offering Memorandum (i) there has not been any
change in the capital stock or other equity interest (other than the issuance of
shares of Common Stock upon exercise of warrants described as outstanding in,
and grants, exercises, forfeitures, withholdings and similar ordinary course
changes relating to awards under existing equity incentive plans described in,
Time of Sale Information and the Offering Memorandum (the “Equity Compensation
Plans”)), short-term debt or long-term indebtedness for borrowed money of the
Company (other than under the Credit Facility (as hereinafter defined), any of
the Subsidiaries (as defined below) (other than under that certain Credit
Agreement, dated as of April 30, 2010, by and among PDC Mountaineer, LLC
(“PDCM”), BNP Paribas and the lenders party thereto, as amended (the “PDCM
Credit Facility”) or any drilling partnership of the Company (which are fully
set forth in Exhibit F hereto (each, a “Drilling Partnership” and collectively,
the “Drilling Partnerships”)), or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, properties,
management, financial position, stockholders’ equity, results of operations or
prospects of the Company and the Subsidiaries taken as a whole; (ii) none of the
Company, any of the Subsidiaries, or, to the best knowledge of the Company after
due inquiry, any Drilling Partnership, has entered into any transaction or
agreement (whether or not in the ordinary course of business) that is material
to the Company and the Subsidiaries taken as a whole or incurred any liability
or obligation, direct or contingent, that is material to the Company and the
Subsidiaries taken as a whole; and (iii) neither the Company nor any of the
Subsidiaries has sustained any loss or interference with its business that is
material to the Company and the Subsidiaries taken as a whole and that is either
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case of the foregoing clauses (i), (ii) and (iii), as otherwise
disclosed in each of the Time of Sale Information and the Offering Memorandum.

 

6

--------------------------------------------------------------------------------

(g) Organization and Good Standing. Each subsidiary of the Company is listed on
Exhibit G hereto, such subsidiaries together with PDCM and its subsidiaries
(collectively, the “Subsidiaries”); provided that none of the Drilling
Partnerships shall, for purposes of this Agreement, constitute a Subsidiary of
the Company. The Company and each Subsidiary and Drilling Partnership have been
duly organized or formed and are validly existing and in good standing under the
laws of their respective jurisdictions of organization or formation, are duly
qualified to do business and are in good standing in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to be so
qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the
business, properties, management, financial position, stockholders’ equity,
results of operations or prospects of the Company, the Subsidiaries and the
Drilling Partnerships taken as a whole or on the performance by the Company of
its obligations under this Agreement and the Securities (a “Material Adverse
Effect”). The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the Subsidiaries listed in
Exhibit G hereto and the Drilling Partnerships listed on Exhibit F hereto.

(h) Capitalization. The Company has an authorized capitalization as set forth in
the Time of Sale Information and the Offering Memorandum under the heading
“Capitalization,” and all the outstanding shares of capital stock or other
equity interests of each Subsidiary and, to the best knowledge of the Company
after due inquiry, each Drilling Partnership owned, directly or indirectly, by
the Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of any lien, charge, encumbrance, security interest, restriction on voting
or transfer or any other claim of any third party, except for liens, charges,
encumbrances, security interests, restrictions on voting or transfer or other
claims disclosed in the Time of Sale Information and the Offering Memorandum
pursuant to the Second Amended and Restated Credit Agreement dated as of
November 5, 2010, as amended, among the Company, the guarantor parties thereto,
the lender parties thereto and JPMorgan Chase Bank, N.A., as administrative
agent (the “Credit Facility”).

(i) Due Authorization. The Company has full corporate right, power and authority
to execute and deliver this Agreement, the Securities, the Indenture, the
Exchange Securities, the Registration Rights Agreement (collectively, the
“Transaction Documents”) and to perform its obligations hereunder and
thereunder; and all action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents and
the consummation of the transactions contemplated thereby has been duly and
validly taken.

(j) The Indenture. The Indenture has been duly authorized by the Company and on
the Closing Date will be duly executed and delivered by the Company and, when
duly executed and delivered in accordance with its terms by each of the parties
thereto, will constitute a valid and legally binding agreement

 

7

--------------------------------------------------------------------------------

of the Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by
equitable principles relating to enforceability (collectively, the
“Enforceability Exceptions”); and on the Closing Date, the Indenture will
conform in all material respects to the requirements of the Trust Indenture Act
of 1939, as amended (the “Trust Indenture Act”), and the rules and regulations
of the Commission applicable to an indenture that is qualified thereunder.

(k) The Securities. The Securities have been duly authorized by the Company and,
when duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their terms, and will
be entitled to the benefits of the Indenture, subject to the Enforceability
Exceptions.

(l) The Exchange Securities. On the Closing Date, the Exchange Securities will
have been duly authorized by the Company and, when duly executed, authenticated,
issued and delivered as contemplated by the Registration Rights Agreement, will
be duly and validly issued and outstanding and will constitute valid and legally
binding obligations of the Company, as issuer, enforceable against the Company
in accordance with their terms, and will be entitled to the benefits of the
Indenture, subject to the Enforceability Exceptions.

(m) Purchase and Registration Rights Agreements. This Agreement has been duly
authorized, executed and delivered by the Company; and the Registration Rights
Agreement has been duly authorized by the Company and on the Closing Date will
be duly executed and delivered by the Company and, when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution hereunder and
thereunder may be limited by applicable law and public policy.

(n) Descriptions of the Transaction Documents. Each Transaction Document
conforms in all material respects to the description thereof contained in each
of the Time of Sale Information and the Offering Memorandum.

(o) No Violation or Default. None of the Company, any of the Subsidiaries or, to
the best knowledge of the Company after due inquiry, any of the Drilling
Partnerships is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which

 

8

--------------------------------------------------------------------------------

the Company, any of the Subsidiaries or any of the Drilling Partnerships is a
party or by which the Company, any of the Subsidiaries or any of the Drilling
Partnerships is bound or to which any of the property, right or assets of the
Company, any of the Subsidiaries or any of the Drilling Partnerships is subject;
or (iii) in violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory authority,
except, in the case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a Material
Adverse Effect.

(p) No Conflicts. The execution, delivery and performance by the Company of each
of the Transaction Documents to which each is a party, the issuance and sale of
the Securities, the issuance of the Exchange Notes and compliance by the Company
with the terms thereof and the consummation of the transactions contemplated by
the Transaction Documents will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
result in the termination, modification or acceleration of, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company, any of the Subsidiaries or, to the best knowledge of the
Company after due inquiry, any Drilling Partnership pursuant to any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company, any of the Subsidiaries or any Drilling Partnership is a
party or by which the Company, any of the Subsidiaries or any Drilling
Partnership is bound or to which any of the property or assets of the Company or
any of the Subsidiaries or any Drilling Partnership is subject, (ii) result in
any violation of the provisions of the charter or by-laws or similar
organizational documents of the Company or any of the Subsidiaries or any
Drilling Partnership or (iii) result in the violation of any law or statute or
any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clause (i) above,
as disclosed in each of the Time of Sale Information and the Offering Memorandum
or, in the case of clauses (i) and (iii) above, for any such conflict, breach,
violation or default that would not, individually or in the aggregate, have a
Material Adverse Effect.

(q) No Consents Required. No consent, approval, authorization, order, license,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of each of the Transaction Documents to which each is a party,
the issuance and sale of the Securities, the issuance of the Exchange Notes and
compliance by the Company with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications
as may be required (i) under applicable state securities laws in connection with
the purchase and resale of the Securities by the Initial Purchasers and,
(ii) with respect to the Exchange Securities under the Securities Act, the Trust
Indenture Act and applicable state securities laws as contemplated by the
Registration Rights Agreement.

 

9

--------------------------------------------------------------------------------

(r) Legal Proceedings. Except as described in each of the Time of Sale
Information and the Offering Memorandum, there are no legal, governmental or
regulatory investigations, actions, suits, or proceedings (“Actions”) pending to
which the Company or any of the Subsidiaries is a party or to which any property
of the Company or any of the Subsidiaries is the subject and, to the best
knowledge of the Company after due inquiry, there are no legal, governmental or
regulatory investigations, actions, suits or proceedings pending to which any
Drilling Partnership is a party or to which any property of any Drilling
Partnership is subject, that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect; and no such Actions are
threatened or, to the best knowledge of the Company after due inquiry,
contemplated by any governmental or regulatory authority or threatened by
others.

(s) Independent Accountants. PricewaterhouseCoopers LLC, which has certified
certain financial statements of the Company and its subsidiaries is an
independent public accounting firm with respect to the Company and its
subsidiaries within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board (United States) and
as required by the Securities Act.

(t) Real and Personal Property. The Company, each of its Subsidiaries and, to
the best knowledge of the Company after due inquiry, the Drilling Partnerships,
have (i) valid and defensible title to substantially all their respective
interests in their natural gas and oil properties leased or owned by them,
(ii) good and marketable title to all real property owned by them (other than
the oil and gas properties referred to in clause (i) above) and (iii) good and
marketable title to all personal property owned by them, in each case free and
clear of all liens, encumbrances and defects, except as encumbered by the Credit
Facility and, in the case of PDCM and its subsidiaries, the PDCM Credit
Facility, and as described in the Time of Sale Information and the Offering
Memorandum or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such
property in the aggregate by the Company, its Subsidiaries and, to the best
knowledge of the Company after due inquiry, the Drilling Partnerships; and all
assets held under lease by the Company, its Subsidiaries and, to the best
knowledge of the Company after due inquiry, the Drilling Partnerships, are held
by them under valid, subsisting and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made of such
properties and proposed to be made of such properties by the Company, any of its
Subsidiaries or, to the best knowledge of the Company after due inquiry, the
Drilling Partnerships.

(u) Intellectual Property. The Company, the Subsidiaries and, to the best
knowledge of the Company after due inquiry, the Drilling Partnerships own or
possess adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade secrets and
other

 

10

--------------------------------------------------------------------------------

unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) necessary for the conduct of their respective businesses as
currently conducted and as proposed to be conducted, and the conduct of their
respective businesses will not conflict in any material respect with any such
rights of others. The Company, the Subsidiaries and, to the best knowledge of
the Company after due inquiry, the Drilling Partnerships have not received any
notice of any claim of infringement, misappropriation or conflict with any such
rights of others in connection with its patents, patent rights, licenses,
inventions, trademarks, service marks, trade names, copyrights and know-how,
which could reasonably be expected to result in a Material Adverse Effect.

(v) No Undisclosed Relationships. No relationship, direct or indirect, exists
between or among the Company or any of the Subsidiaries or any Drilling
Partnership, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of the Subsidiaries, on the other,
that would be required by the Securities Act to be described in a registration
statement on Form S-1 to be filed with the Commission and that is not so
described in each of the Time of Sale Information and the Offering Memorandum.

(w) Investment Company Act. The Company is not, and after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof
as described in each of the Time of Sale Information and the Offering
Memorandum, will not be, an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the “Investment Company Act”).

(x) Taxes. The Company, the Subsidiaries and the Drilling Partnerships have paid
all material federal, state, local and foreign taxes and filed all material tax
returns required to be paid or filed through the date hereof; and except as
otherwise disclosed in each of the Time of Sale Information and the Offering
Memorandum, there is no material tax deficiency that has been, or could
reasonably be expected to be, asserted against the Company, the Subsidiaries and
the Drilling Partnerships or any of their respective properties or assets.

(y) Licenses and Permits. The Company, the Subsidiaries and, to the best
knowledge of the Company after due inquiry, the Drilling Partnerships possess
all licenses, certificates, permits and other authorizations issued by, and have
made all declarations and filings with, the appropriate federal, state, local or
foreign governmental or regulatory authorities that are necessary for the
ownership or lease of their respective properties or the conduct of their
respective businesses as described in each of the Time of Sale Information and
the Offering Memorandum (other than drilling and similar operational permits
reasonably expected to be granted in the ordinary course with respect to
exploration and development activities), except where the failure to possess or
make the same would not, individually or in the aggregate, have a Material
Adverse Effect; and except as described in each of the Time of Sale Information
and the Offering Memorandum,

 

11

--------------------------------------------------------------------------------

neither the Company nor any of the Subsidiaries has received notice of any
revocation or modification of any such license, certificate, permit or
authorization or has any reason to believe that any such license, certificate,
permit or authorization will not be renewed in the ordinary course except as
would not, individually or in the aggregate, have a Material Adverse Effect.

(z) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of the Subsidiaries or, to the best knowledge of the Company
after due inquiry, the Drilling Partnerships exists or, to the best knowledge of
the Company, is contemplated or threatened and the Company is not is aware of
any existing or imminent labor disturbance by, or dispute with, the employees of
any of the Company’s, the Subsidiaries’ or the Drilling Partnerships’ principal
suppliers, contractors or customers, except as would not, individually or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries or the Drilling Partnerships have received any notice of
cancellation or termination with respect to any collective bargaining agreement
to which it is a party.

(aa) Compliance with and Liability under Environmental Laws. The Company, its
Subsidiaries and, to the best knowledge of the Company after due inquiry, the
Drilling Partnerships (i) are in compliance with any and all applicable foreign,
federal, state and local laws, including common law, and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or other wastes, pollutants or contaminants (“Environmental Laws”),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses
(other than permits reasonably expected to be granted in the ordinary course
with respect to exploration and development activities) and (iii) are in
compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals would not,
individually or in the aggregate, have a Material Adverse Effect. Except as
disclosed in the Time of Sale Information and the Offering Memorandum, there are
no costs or liabilities associated with Environmental Laws (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties) which would, individually or in the aggregate,
have a Material Adverse Effect.

(bb) Hazardous Materials. Except as disclosed in the Time of Sale Information
and the Offering Memorandum, (a) there has been no storage, disposal,
generation, manufacture, refinement, transportation, handling or treatment of
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances by the Company, any of its Subsidiaries or, to the best knowledge of
the Company after due inquiry, the Drilling Partnerships, or any of their
predecessors in interest, at, upon or from any of the property now or previously
owned, leased or operated

 

12

--------------------------------------------------------------------------------

by the Company, its Subsidiaries or, to the best knowledge of the Company after
due inquiry, the Drilling Partnerships, or any of their predecessors in
interest, in violation of any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, or which would require remedial action under
any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have, or
would not be reasonably likely to have, individually or in the aggregate with
all such violations and remedial actions, a Material Adverse Effect; and
(b) there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances for which the Company, any of
its Subsidiaries or, to the best knowledge of the Company after due inquiry, the
Drilling Partnerships, would be liable, except for any such spill, discharge,
leak, emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, individually or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes, dumpings and
releases, a Material Adverse Effect; and the terms “hazardous wastes”, “toxic
wastes”, “solid wastes”, “hazardous substances” and “medical wastes” shall have
the meanings specified in any applicable local, state, federal and foreign laws,
including Environmental Laws.

(cc) Compliance with ERISA. (i) Each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), for which the Company or any member of its “Controlled Group”
(defined as any organization which is a member of a controlled group of
corporations within the meaning of Section 414 of the Internal Revenue Code of
1986, as amended (the “Code”)) would have any liability (each, a “Plan”) has
been maintained in compliance with its terms and the requirements of any
applicable statutes, orders, rules and regulations, including but not limited to
ERISA and the Code, except for noncompliance that could not reasonably be
expected to result in material liability to the Company, the Subsidiaries or the
Drilling Partnerships; (ii) no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to
any Plan, excluding transactions effected pursuant to a statutory or
administrative exemption, that could reasonably be expected to result in a
material liability to the Company, the Subsidiaries or the Drilling
Partnerships; (iii) for each Plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, the minimum funding standard of
Section 412 of the Code or Section 302 of ERISA, as applicable, has been
satisfied (without taking into account any waiver thereof or extension of any
amortization period) and is reasonably expected to be satisfied in the future
(without taking into account any waiver thereof or extension of any amortization
period); (iv) the fair market value of the assets of each Plan exceeds the
present value of all benefits accrued under such Plan (determined based on those
assumptions used to fund such Plan); (v) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to
occur that either has resulted, or could reasonably be expected to result, in
material liability to the Company, the Subsidiaries or the Drilling

 

13

--------------------------------------------------------------------------------

Partnerships; (vi) neither the Company nor any member of the Controlled Group
has incurred, nor reasonably expects to incur, any material liability under
Title IV of ERISA (other than contributions to the Plan or premiums to the
Pension Benefit Guaranty Corporation, in the ordinary course and without
default) in respect of a Plan (including a “multiemployer plan”, within the
meaning of Section 4001(a)(3) of ERISA) and (vii) to the best knowledge of the
Company, there is no pending audit or investigation by the Internal Revenue
Service, the U.S. Department of Labor, the Pension Benefit Guaranty Corporation
or any other governmental agency or any foreign regulatory agency with respect
to any Plan that could reasonably be expected to result in material liability to
the Company, the Subsidiaries or the Drilling Partnerships. None of the
following events has occurred or is reasonably likely to occur: (x) a material
increase in the aggregate amount of contributions required to be made to all
Plans by the Company or the Subsidiaries in the current fiscal year of the
Company and the Subsidiaries compared to the amount of such contributions made
in the Company and the Subsidiaries’ most recently completed fiscal year; or
(y) a material increase in the Company and the Subsidiaries’ “accumulated
post-retirement benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 106) compared to the amount of such obligations
in the Company and the Subsidiaries’ most recently completed fiscal year.

(dd) Disclosure Controls. The Company and the Subsidiaries maintain an effective
system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of
the Exchange Act) that complies with the requirements of the Exchange Act and
has been designed to ensure that information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Commission’s rules and forms, including controls and procedures designed to
ensure that such information is accumulated and communicated to the Company’s
management as appropriate to allow timely decisions regarding required
disclosure. The Company and the Subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule
13a-15 of the Exchange Act.

(ee) Accounting Controls. The Company and the Subsidiaries maintain systems of
“internal control over financial reporting” (as defined in Rule 13a-15(f) of the
Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal
executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including,
but not limited to, internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance

 

14

--------------------------------------------------------------------------------

with management’s general or specific authorization; (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences; and
(v) the interactive data in eXtensible Business Reporting Language incorporated
by reference in the Time of Sale Information and the Offering Memorandum fairly
presents the information called for in all material respects and is prepared in
accordance with the Commission’s rules and guidelines applicable thereto. Except
as disclosed in the Time of Sale Information and the Offering Memorandum, there
are no material weaknesses in the Company’s internal controls. The Company’s
auditors and the Audit Committee of the Board of Directors of the Company have
been advised of: (i) all significant deficiencies and material weaknesses in the
design or operation of internal controls over financial reporting which have
adversely affected or are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information; and
(ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal controls over
financial reporting.

(ff) Insurance. The Company, the Subsidiaries, and, to the best knowledge of the
Company after due inquiry, the Drilling Partnerships have insurance covering
their respective properties, operations, personnel and businesses, which
insurance is in amounts and insures against such losses and risks as are
adequate to protect the Company, the Subsidiaries, the Drilling Partnerships and
their respective businesses with respect to matters covered by such insurance
consistent with customary industry standards; and none of the Company, any of
the Subsidiaries or, to the best knowledge of the Company after due inquiry, any
Drilling Partnership has (i) received notice from any insurer or agent of such
insurer that material capital improvements or other expenditures are required or
necessary to be made in order to continue such insurance or (ii) any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business.

(gg) No Unlawful Payments. None of the Company, any of the Subsidiaries or, to
the best knowledge of the Company after due inquiry, any Drilling Partnership
or, to the best knowledge of the Company, any director, officer, agent,
employee, affiliate or other person associated with or acting on behalf of the
Company or any of the Subsidiaries has while so acting (i) used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.

 

15

--------------------------------------------------------------------------------

(hh) Compliance with Money Laundering Laws. The operations of the Company, the
Subsidiaries and, to the best knowledge of the Company after due inquiry, the
Drilling Partnerships are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions to which the Company is subject, the
rules and regulations thereunder and any related or similar rules, regulations
or guidelines, issued, administered or enforced by any governmental agency with
jurisdiction over the Company (collectively, the “Money Laundering Laws”) and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company, any of the
Subsidiaries or any Drilling Partnership with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company, threatened.

(ii) Compliance with OFAC. None of the Company, any of the Subsidiaries or, to
the best knowledge of the Company after due inquiry, any Drilling Partnership,
or, to the best knowledge of the Company, any director, officer, agent,
employee, affiliate or representative of the Company, any Subsidiaries or any
Drilling Partnership is an individual or entity (“Person”) currently subject to
or the target of any sanctions administered or enforced by the United States
Government, including, without limitation, the U.S. Department of the Treasury’s
Office of Foreign Assets Control (“OFAC”) (collectively, “Sanctions”), nor is
the Company located, organized or resident in a country or territory that is the
subject of Sanctions; and the Company will not, directly or indirectly, use the
proceeds of the offering of the Securities hereunder, or lend, contribute or
otherwise make available such proceeds to any subsidiaries, joint venture
partners or other person, for the purpose of funding any activities of or
business with any person, or in any country or territory, that, at the time of
such funding, is the subject of Sanctions or in any other manner that will
result in a violation by any person (including any person participating in the
transaction, whether as initial purchaser, advisor, investor or otherwise) of
Sanctions.

(jj) Solvency. On and immediately after the Closing Date, the Company (after
giving effect to the issuance and sale of the Securities and the other
transactions related thereto as described in each of the Time of Sale
Information and the Offering Memorandum) will be Solvent. As used in this
paragraph, the term “Solvent” means, with respect to a particular date and
entity, that on such date (i) the fair value (and present fair saleable value)
of the assets of such entity is not less than the total amount required to pay
the probable liability of such entity on its total existing debts and
liabilities (including contingent liabilities) as they become absolute and
matured; (ii) such entity is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and commitments as they mature and
become due in the normal course of business; (iii) assuming consummation of the
issuance and sale of the Securities as contemplated by this Agreement, the Time
of Sale Information and the Offering Memorandum, such entity does not have,
intend to incur or believe that it will incur debts or liabilities beyond its
ability to pay as such debts and liabilities mature; (iv) such entity is not
engaged in any business or transaction, and does not propose to engage in any
business or transaction, for which its property would constitute unreasonably
small capital; and (v) such entity is not a defendant in any civil action that
is reasonably likely to result in a judgment that such entity is or would become
unable to satisfy.

 

16

--------------------------------------------------------------------------------

(kk) No Restrictions on Subsidiaries. No Subsidiary is currently prohibited,
directly or indirectly, under any agreement or other instrument to which it is a
party or is subject, from paying any dividends to the Company, from making any
other distribution on such Subsidiary’s capital stock, from repaying to the
Company any loans or advances to such Subsidiary from the Company or from
transferring any of such Subsidiary’s properties or assets to the Company or any
other subsidiary of the Company, except for limitations on the foregoing set
forth in the PDCM Credit Facility and described in each of the Time of Sale
Information and the Offering Memorandum.

(ll) No Broker’s Fees. Neither the Company nor any of the Subsidiaries is a
party to any contract, agreement or understanding with any person (other than
this Agreement) that would give rise to a valid claim against any of them or any
Initial Purchaser for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Securities, except as described in
each of the Time of Sale Information and the Offering Memorandum.

(mm) Rule 144A Eligibility. On the Closing Date, the Securities will not be of
the same class as securities listed on a national securities exchange registered
under Section 6 of the Exchange Act or quoted in an automated inter-dealer
quotation system; and each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains or will contain all the
information that, if requested by a prospective purchaser of the Securities,
would be required to be provided to such prospective purchaser pursuant to Rule
144A(d)(4) under the Securities Act.

(nn) No Integration. Neither the Company nor any of its affiliates (as defined
in Rule 501(b) of Regulation D) has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act), that is or will be integrated
with the sale of the Securities in a manner that would require registration of
the Securities under the Securities Act.

(oo) No General Solicitation or Directed Selling Efforts. None of the Company or
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no representation is made) has
(i) solicited offers for, or offered or sold, the Securities by means of any
form of general solicitation or general advertising within the meaning of Rule
502(c) of Regulation D or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act or (ii) in connection with offers
and sales of Securities outside the United States, engaged in any directed
selling efforts within the meaning of Regulation S under the Securities Act
(“Regulation S”), and all such persons have complied with the offering
restrictions requirement of Regulation S.

 

17

--------------------------------------------------------------------------------

(pp) Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 1(b) (including
Exhibit D hereto) and their compliance with their agreements set forth therein,
it is not necessary, in connection with the issuance and sale of the Securities
to the Initial Purchasers and the offer, resale and delivery of the Securities
by the Initial Purchasers in the manner contemplated by this Agreement, the Time
of Sale Information and the Offering Memorandum, to register the Securities
under the Securities Act or to qualify the Indenture under the Trust Indenture
Act.

(qq) No Stabilization. The Company has not taken, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in
any stabilization or manipulation of the price of the Securities.

(rr) Margin Rules. Neither the issuance, sale and delivery of the Securities nor
the application of the proceeds thereof by the Company as described in each of
the Time of Sale Information and the Offering Memorandum will violate Regulation
T, U or X of the Board of Governors of the Federal Reserve System or any other
regulation of such Board of Governors.

(ss) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) included or incorporated by reference in any of the Time of Sale
Information or the Offering Memorandum has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.

(tt) Industry Statistical and Market Data. Nothing has come to the attention of
the Company that has caused the Company to believe that the industry statistical
and market-related data included or incorporated by reference in each of the
Time of Sale Information and the Offering Memorandum is not based on or derived
from sources that are reliable and accurate in all material respects.

(uu) Sarbanes-Oxley Act. There is and has been no failure on the part of the
Company or, to the best knowledge of the Company, any of the Company’s directors
or officers, in their capacities as such, to comply with any provision of the
Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.

(vv) Oil and Gas Reserve Estimates. The information underlying the estimates of
the oil and gas reserves of the Company, its Subsidiaries and, to the best of
the knowledge of the Company after due inquiry, the Drilling Partnerships as
described in the Time of Sale Information and the Offering Memorandum is
complete and accurate in all material respects (or, with regard to any
information underlying the estimates prepared by any petroleum engineers
retained by the seller of such oil and gas reserves, is, to the best knowledge
of the Company after reasonable investigation, complete and accurate in all
material respects);

 

18

--------------------------------------------------------------------------------

other than production of the Company’s reserves in the ordinary course of
business and intervening product price fluctuations described in the Time of
Sale Information and the Offering Memorandum, the Company is not aware of any
facts or circumstances that would result in a material adverse change in such
reserves or the present value of future net cash flows therefrom as described in
the Time of Sale Information and the Offering Memorandum. Estimates of such
reserves and present values comply in all material respects with the applicable
requirements of Regulation S-X and Subpart 1200 of Regulation S-K.

(ww) Independent Petroleum Engineer. Ryder Scott Company L.P., the petroleum
engineer who is named as having reviewed certain reserve data included in the
Time of Sale Information and the Offering Memorandum, is an independent
engineering firm with respect to the Company and its Subsidiaries. The
information underlying the estimates of oil and natural gas reserves of the
Company, its Subsidiaries and, to the best knowledge of the Company after due
inquiry, the Drilling Partnerships, which the Company prepared and supplied to
Ryder Scott Company L.P. for the purpose of preparing the reports referred to in
the Time of Sale Information and the Offering Memorandum was true and correct in
all material respects on the dates such estimates were made and such information
was supplied and was prepared in accordance with customary industry practices.

(xx) Certificates. Any certificate signed by an officer of the Company or any of
its Subsidiaries and delivered to the Representatives or to counsel for the
Initial Purchasers shall be deemed a representation and warranty by the Company
to each Initial Purchaser as to the matters covered thereby.

4. Further Agreements of the Company. The Company covenants and agrees with each
Initial Purchaser that:

(a) Delivery of Copies. The Company will deliver, without charge, to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.

(b) Offering Memorandum, Amendments or Supplements. Before finalizing the
Offering Memorandum or making or distributing any amendment or supplement to any
of the Time of Sale Information or the Offering Memorandum or filing with the
Commission any document that will be incorporated by reference therein, the
Company will furnish to the Representative and counsel for the Initial
Purchasers a copy of the proposed Offering Memorandum or such amendment or
supplement or document to be incorporated by reference therein for review, and
will not distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which the
Representative reasonably objects.

 

19

--------------------------------------------------------------------------------

(c) Additional Written Communications. Before making, using, authorizing,
approving or referring to any Issuer Written Communication, the Company will
furnish to the Representative and counsel for the Initial Purchasers a copy of
such written communication for review and will not make, use, authorize, approve
or refer to any such written communication to which the Representative
reasonably objects.

(d) Notice to the Representative. The Company will advise the Representative
promptly, and confirm such advice in writing, (i) of the issuance by any
governmental or regulatory authority of any order preventing or suspending the
use of any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum or the initiation or threatening of any proceeding for
that purpose; (ii) of the occurrence of any event at any time prior to the
completion of the initial offering of the Securities as a result of which any of
the Time of Sale Information, any Issuer Written Communication or the Offering
Memorandum as then amended or supplemented would include any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing when such Time of
Sale Information, Issuer Written Communication or the Offering Memorandum is
delivered to a purchaser, not misleading; and (iii) of the receipt by the
Company of any notice with respect to any suspension of the qualification of the
Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or suspending any such qualification of
the Securities and, if any such order is issued, will obtain as soon as possible
the withdrawal thereof.

(e) Time of Sale Information. If at any time prior to the Closing Date (i) any
event shall occur or condition shall exist as a result of which any of the Time
of Sale Information as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (ii) it is necessary to amend or
supplement the Time of Sale Information to comply with law, the Company will
immediately notify the Initial Purchasers thereof and forthwith prepare and,
subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Time of Sale Information (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in any of the Time of Sale Information as so
amended or supplemented (including such documents to be incorporated by
reference therein) will not, in the light of the circumstances under which they
were made, be misleading or so that any of the Time of Sale Information will
comply with applicable law.

 

20

--------------------------------------------------------------------------------

(f) Ongoing Compliance of the Offering Memorandum. If at any time prior to the
completion of the initial offering of the Securities (i) any event shall occur
or condition shall exist as a result of which the Offering Memorandum as then
amended or supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Offering Memorandum
is delivered to a purchaser, not misleading or (ii) it is necessary to amend or
supplement the Offering Memorandum to comply with applicable law, the Company
will immediately notify the Initial Purchasers thereof and forthwith prepare
and, subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or any document to be
filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in the Offering Memorandum as so amended or
supplemented (including such document to be incorporated by reference therein)
will not, in the light of the circumstances existing when the Offering
Memorandum is delivered to a purchaser, be misleading or so that the Offering
Memorandum will comply with applicable law.

(g) Blue Sky Compliance. The Company will qualify the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will use reasonable best efforts to
continue such qualifications in effect so long as required for the initial
offering and resale of the Securities; provided that the Company shall not be
required to (i) qualify as a foreign corporation or other entity or as a dealer
in securities in any such jurisdiction where it would not otherwise be required
to so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.

(h) Clear Market. During the period from the date hereof through and including
the date that is 60 days after the date hereof, the Company will not, without
the prior written consent of the Representative, offer, sell, contract to sell
or otherwise dispose of any debt securities issued or guaranteed by the Company
and having a tenor of more than one year.

(i) Use of Proceeds. The Company will apply the net proceeds from the sale of
the Securities as described in each of the Time of Sale Information and the
Offering Memorandum under the heading “Use of proceeds”.

(j) Supplying Information. While the Securities remain outstanding and are
“restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which the Company is not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
furnish to holders of the Securities and prospective purchasers of the
Securities designated by such holders, upon the request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act.

(k) DTC. The Company will assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through DTC.

 

21

--------------------------------------------------------------------------------

(l) No Resales by the Company. The Company will not, and will not permit any of
its affiliates (as defined in Rule 144 under the Securities Act) to, resell any
of the Securities that have been acquired by any of them, except for Securities
purchased by the Company or any of its affiliates and resold in a transaction
registered under the Securities Act.

(m) No Integration. Neither the Company nor any of its affiliates (as defined in
Rule 501(b) of Regulation D) will, directly or through any agent, sell, offer
for sale, solicit offers to buy or otherwise negotiate in respect of, any
security (as defined in the Securities Act), that is or will be integrated with
the sale of the Securities in a manner that would require registration of the
Securities under the Securities Act.

(n) No General Solicitation or Directed Selling Efforts. None of the Company or
any of its affiliates or any other person acting on its or their behalf (other
than the Initial Purchasers, as to which no covenant is given) will (i) solicit
offers for, or offer or sell, the Securities by means of any form of general
solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) in connection with offers and sales
of Securities outside the United States, engage in any directed selling efforts
within the meaning of Regulation S, and all such persons will comply with the
offering restrictions requirement of Regulation S.

(o) No Stabilization. The Company will not take, directly or indirectly, any
action designed to or that could reasonably be expected to cause or result in
any stabilization or manipulation of the price of the Securities.

5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize use of, refer
to, or participate in the planning for use of, any written communication that
constitutes an offer to sell or the solicitation of an offer to buy the
Securities other than (i) the Preliminary Offering Memorandum and the Offering
Memorandum, (ii) any written communication that contains either (a) no “issuer
information” (as defined in Rule 433(h)(2) under the Securities Act) or
(b) “issuer information” that was included (including through incorporation by
reference) in the Time of Sale Information or the Offering Memorandum, (iii) any
written communication listed on Exhibit B or prepared pursuant to Section 4(c)
above (including any electronic road show), (iv) any written communication
prepared by such Initial Purchaser and approved by the Company in advance in
writing or (v) any written communication relating to or that contains the terms
of the Securities and/or other information that was included (including through
incorporation by reference) in the Time of Sale Information or the Offering
Memorandum, except for any communication that if the offering of the Securities
were conducted as a public offering pursuant to a registration statement filed
with the SEC would constitute a “free writing prospectus” as defined in Rule 405
under the Securities Act and required to be filed thereunder.

 

22

--------------------------------------------------------------------------------

6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial
Purchaser to purchase Securities on the Closing Date as provided herein is
subject to the performance by the Company of its covenants and other obligations
hereunder and to the following additional conditions:

(a) Representations and Warranties. The representations and warranties of the
Company contained herein shall be true and correct on the date hereof and on and
as of the Closing Date; and the statements of the Company and its officers made
in any certificates delivered pursuant to this Agreement shall be true and
correct on and as of the Closing Date.

(b) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the
execution and delivery of this Agreement, (i) no downgrading shall have occurred
in the rating accorded the Securities or any other debt securities or preferred
stock issued or guaranteed by the Company or any of the Subsidiaries by any
“nationally recognized statistical rating organization”, as such term is defined
under Section 3(a)(62) under the Exchange Act and (ii) no such organization
shall have publicly announced that it has under surveillance or review, or has
changed its outlook with respect to, its rating of the Securities or of any
other debt securities or preferred stock issued or guaranteed by the Company or
any of the Subsidiaries (other than an announcement with positive implications
of a possible upgrading).

(c) No Material Adverse Change. No event or condition of a type described in
Section 3(f) hereof shall have occurred or shall exist, which event or condition
is not described in each of the Time of Sale Information (excluding any
amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.

(d) Officer’s Certificate. The Representative shall have received on and as of
the Closing Date a certificate of an executive officer of the Company who has
specific knowledge of the Company’s financial matters and is satisfactory to the
Representative (i) confirming that such officer has carefully reviewed the Time
of Sale Information and the Offering Memorandum and, to the best knowledge of
such officer, the representations set forth in Sections 3(a) and 3(b) hereof are
true and correct, (ii) confirming that the other representations and warranties
of the Company in this Agreement are true and correct and that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date and (iii) to
the effect set forth in paragraphs (b) and (c) above.

 

23

--------------------------------------------------------------------------------

(e) Accountants’ Comfort Letters. (i) On the date of this Agreement and on the
Closing Date, PricewaterhouseCoopers LLP shall have furnished to the
Representative, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representative, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to initial purchasers with respect to the financial statements and
certain financial information contained or incorporated by reference in each of
the Time of Sale Information and the Offering Memorandum; and (ii) on the date
of this Agreement and on the Closing Date, KPMG LLP shall have furnished to the
Representative, at the request of the Company, letters, dated the respective
dates of delivery thereof and addressed to the Initial Purchasers, in form and
substance reasonably satisfactory to the Representative, containing statements
and information of the type customarily included in accountants’ “comfort
letters” to initial purchasers with respect to the financial statements and
certain financial information concerning the Wattenberg Field assets purchased
by the Company contained or incorporated by reference in each of the Time of
Sale Information and the Offering Memorandum; provided that the letters
delivered on the Closing Date shall use a “cut-off” date no more than three
business days prior to the Closing Date.

(f) Engineer’s Letters. On the date of this Agreement and on the Closing Date,
the Representative shall have received letters from Ryder Scott Company L.P.,
dated the respective dates of delivery thereof and in the form and substance
reasonably satisfactory to the Representative, together with signed or
reproduced copies of such letters for each of the other Initial Purchasers,
containing statements and information with respect to such matters as the
Representative may require.

(g) Opinion and 10b-5 Statement of Counsel for the Company. Davis Graham &
Stubbs LLP, counsel for the Company, shall have furnished to the Representative,
at the request of the Company, their written opinion and 10b-5 statement, dated
the Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, to the effect set forth in
Exhibit H hereto.

(h) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The
Representative shall have received on and as of the Closing Date an opinion and
10b-5 statement, addressed to the Initial Purchasers, of Davis Polk & Wardwell
LLP, counsel for the Initial Purchasers, with respect to such matters as the
Representative may reasonably request, and such counsel shall have received such
documents and information as they may reasonably request to enable them to pass
upon such matters.

(i) No Legal Impediment to Issuance. No action shall have been taken and no
statute, rule, regulation or order shall have been enacted, adopted or issued by
any federal, state or foreign governmental or regulatory authority that would,
as of the Closing Date, prevent the issuance or sale of the Securities; and no
injunction or order of any federal, state or foreign court shall have been
issued that would, as of the Closing Date, prevent the issuance or sale of the
Securities.

 

24

--------------------------------------------------------------------------------

(j) Good Standing. The Representative shall have received on and as of the
Closing Date satisfactory evidence of the good standing of the Company and the
Subsidiaries in their respective jurisdictions of organization and their good
standing in such other jurisdictions as the Representative may reasonably
request, in each case in writing or any standard form of telecommunication from
the appropriate governmental authorities of such jurisdictions.

(k) Registration Rights Agreement. The Initial Purchasers shall have received a
counterpart of the Registration Rights Agreement that shall have been executed
and delivered by a duly authorized officer of the Company.

(l) DTC. The Securities shall be eligible for clearance and settlement through
DTC.

(m) Indenture and Securities. The Indenture shall have been duly executed and
delivered by a duly authorized officer of the Company, and the Trustee, and the
Securities shall have been duly executed and delivered by a duly authorized
officer of the Company and duly authenticated by the Trustee.

(n) Additional Documents. On or prior to the Closing Date, the Company shall
have furnished to the Representative such further certificates and documents as
the Representative may reasonably request.

(o) Credit Facility. The Initial Purchasers shall have received evidence to
their satisfaction that the issuance of the Securities will not result in a
breach of the Company’s obligations under the Credit Facility.

(p) Chief Financial Officer’s Certificate. On the date of this Agreement and on
the Closing Date, the Initial Purchasers shall have received from the chief
financial officer of the Company a certificate to the effect as set forth in
Exhibit I hereto.

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

 

7. Indemnification and Contribution.

(a) Indemnification of the Initial Purchasers. The Company agrees to indemnify
and hold harmless each Initial Purchaser, its affiliates, directors and officers
and each person, if any, who controls such Initial Purchaser within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including,

 

25

--------------------------------------------------------------------------------

without limitation, legal fees and other expenses reasonably incurred in
connection with any suit, action or proceeding or any claim asserted, as such
fees and expenses are incurred), joint or several, that arise out of, or are
based upon, any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Memorandum, any of the other Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum (or any
amendment or supplement thereto) or any omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise
out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
therein.

(b) Indemnification of the Company. Each Initial Purchaser agrees, severally and
not jointly, to indemnify and hold harmless the Company and its directors and
officers and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the indemnity set forth in paragraph (a) above, but only with respect
to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with any information relating to such
Initial Purchaser furnished to the Company in writing by such Initial Purchaser
through the Representative expressly for use in the Preliminary Offering
Memorandum, any of the other Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum (or any amendment or supplement
thereto), it being understood and agreed that the only such information consists
of the following paragraphs in the Preliminary Offering Memorandum and the
Offering Memorandum: the third paragraph and the twelfth paragraph under the
caption “Plan of Distribution.”

(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the “Indemnified
Person”) shall promptly notify the person against whom such indemnification may
be sought (the “Indemnifying Person”) in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under paragraph (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under paragraph (a) or (b) above. If any
such proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person (who
shall not, without the consent of the

 

26

--------------------------------------------------------------------------------

Indemnified Person, be counsel to the Indemnifying Person) to represent the
Indemnified Person and any others entitled to indemnification pursuant to this
Section 7 that the Indemnifying Person may designate in such proceeding and
shall pay the fees and expenses of such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding, as incurred. In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person; (iii) the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to the Indemnifying Person; or (iv) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred. Any such separate firm for any Initial Purchaser, its affiliates,
directors and officers and any control persons of such Initial Purchaser shall
be designated in writing by J.P. Morgan Securities LLC and any such separate
firm for the Company its directors and officers and any control persons of the
Company shall be designated in writing by the Company. The Indemnifying Person
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Person shall, without the written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnification could have been sought hereunder by such
Indemnified Person, unless such settlement (x) includes an unconditional release
of such Indemnified Person, in form and substance reasonably satisfactory to
such Indemnified Person, from all liability on claims that are the subject
matter of such proceeding and (y) does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any
Indemnified Person.

(d) Contribution. If the indemnification provided for in paragraph (a) or
(b) above is unavailable to an Indemnified Person or insufficient in respect of
any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the

 

27

--------------------------------------------------------------------------------

Company on the one hand and the Initial Purchasers on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but also the relative
fault of the Company on the one hand and the Initial Purchasers on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Initial Purchasers on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Securities and the total discounts and
commissions received by the Initial Purchasers in connection therewith, as
provided in this Agreement, bear to the aggregate offering price of the
Securities. The relative fault of the Company on the one hand and the Initial
Purchasers on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

(e) Limitation on Liability. The Company and the Initial Purchasers agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Initial Purchaser be required
to contribute any amount in excess of the amount by which the total discounts
and commissions received by such Initial Purchaser with respect to the offering
of the Securities exceeds the amount of any damages that such Initial Purchaser
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers’ obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.

(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be
available to any Indemnified Person at law or in equity.

 

28

--------------------------------------------------------------------------------

8. Termination. This Agreement may be terminated in the absolute discretion of
the Representative, by notice to the Company, if after the execution and
delivery of this Agreement and on or prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on any of the New York
Stock Exchange or the NASDAQ or the over-the-counter market; (ii) trading of any
securities issued or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representative, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum.

9. Defaulting Initial Purchaser.

(a) If, on the Closing Date, any Initial Purchaser defaults on its obligation to
purchase the Securities that it has agreed to purchase hereunder, the
non-defaulting Initial Purchasers may in their discretion arrange for the
purchase of such Securities by other persons satisfactory to the Company on the
terms contained in this Agreement. If, within 36 hours after any such default by
any Initial Purchaser, the non-defaulting Initial Purchasers do not arrange for
the purchase of such Securities, then the Company shall be entitled to a further
period of 36 hours within which to procure other persons satisfactory to the
non-defaulting Initial Purchasers to purchase such Securities on such terms. If
other persons become obligated or agree to purchase the Securities of a
defaulting Initial Purchaser, either the non-defaulting Initial Purchasers or
the Company may postpone the Closing Date for up to five full business days in
order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchasers may be necessary in the Time of Sale
Information, the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Time of Sale Information or the Offering Memorandum that effects any such
changes. As used in this Agreement, the term “Initial Purchaser” includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Exhibit A hereto that, pursuant to this Section 9, purchases
Securities that a defaulting Initial Purchaser agreed but failed to purchase.

 

29

--------------------------------------------------------------------------------

(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased does not exceed one-eleventh of the aggregate principal amount of
all the Securities, then the Company shall have the right to require each
non-defaulting Initial Purchaser to purchase the principal amount of Securities
that such Initial Purchaser agreed to purchase hereunder plus such Initial
Purchaser’s pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Initial Purchaser or Initial Purchasers for which such arrangements
have not been made.

(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate principal amount of such Securities that remains
unpurchased exceeds one-eleventh of the aggregate principal amount of all the
Securities, or if the Company shall not exercise the right described in
paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers. Any termination of this
Agreement pursuant to this Section 9 shall be without liability on the part of
the Company, except that the Company will continue to be liable for the payment
of expenses as set forth in Section 10 hereof and except that the provisions of
Section 7 hereof shall not terminate and shall remain in effect.

(d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company or any non-defaulting Initial Purchaser for
damages caused by its default.

10. Payment of Expenses.

(a) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company agrees to pay or cause
to be paid all costs and expenses incident to the performance of its obligations
hereunder, including without limitation, (i) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Securities and
any taxes payable in that connection; (ii) the costs incident to the preparation
and printing of the Preliminary Offering Memorandum, any other Time of Sale
Information, any Issuer Written Communication and the Offering Memorandum
(including any amendment or supplement thereto) and the distribution thereof;
(iii) the costs of reproducing and distributing each of the Transaction
Documents; (iv) the fees and expenses of the Company’s counsel and independent
accountants and KPMG LLP; (v) the fees and expenses incurred in connection with
the registration or qualification and determination of eligibility for
investment of the Securities under the laws of such jurisdictions as the
Representative may reasonably designate and the preparation, printing and
distribution of a Blue Sky Memorandum (including the related fees and expenses
of counsel for the Initial Purchasers); (vi) any fees charged by rating agencies
for rating the Securities; (vii) the fees and expenses of the Trustee and any
paying agent (including related fees and expenses of any counsel to such
parties); (viii) all expenses and application fees incurred in connection with
the approval of the Securities for book-entry transfer by DTC; and (ix) all
expenses incurred by the Company in connection with any “road show” presentation
to potential investors.

 

30

--------------------------------------------------------------------------------

(b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the Company
for any reason fails to tender the Securities for delivery to the Initial
Purchasers or (iii) the Initial Purchasers decline to purchase the Securities
for any reason permitted under this Agreement, the Company agrees to reimburse
the Initial Purchasers for all out-of-pocket costs and expenses (including the
fees and expenses of their counsel) reasonably incurred by the Initial
Purchasers in connection with this Agreement and the offering contemplated
hereby.

11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and any controlling persons referred
to herein, and the affiliates of each Initial Purchaser referred to in Section 7
hereof. Nothing in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein. No purchaser of Securities
from any Initial Purchaser shall be deemed to be a successor merely by reason of
such purchase.

12. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Company or
the Initial Purchasers pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination of this
Agreement or any investigation made by or on behalf of the Company or the
Initial Purchasers.

13. Certain Defined Terms. For purposes of this Agreement, (a) except where
otherwise expressly provided, the term “affiliate” has the meaning set forth in
Rule 405 under the Securities Act; (b) the term “business day” means any day
other than a day on which banks are permitted or required to be closed in New
York City; (c) the term “subsidiary” has the meaning set forth in Rule 405 under
the Securities Act; (d) the term “Exchange Act” means the Securities Exchange
Act of 1934, as amended; and (e) the term “written communication” has the
meaning set forth in Rule 405 under the Securities Act.

14. Compliance with USA Patriot Act. In accordance with the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)), the Initial Purchasers are required to obtain, verify and record
information that identifies their respective clients, including the Company,
which information may include the name and address of their respective clients,
as well as other information that will allow the Initial Purchasers to properly
identify their respective clients.

 

31

--------------------------------------------------------------------------------

15. Miscellaneous.

(a) Authority of the Representative. Any action by the Initial Purchasers
hereunder may be taken by J.P. Morgan Securities LLC on behalf of the Initial
Purchasers, and any such action taken by J.P. Morgan Securities LLC shall be
binding upon the Initial Purchasers.

(b) Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted and
confirmed by any standard form of telecommunication. Notices to the Initial
Purchasers shall be given to the Representative c/o J.P. Morgan Securities LLC,
383 Madison Avenue, New York, New York 10179 (fax: 212-270-1063); Attention: Bob
Mertensotto. Notices to the Company shall be given to it at PDC Energy, Inc.,
1775 Sherman Street, Suite 3000, Denver, Colorado 80203, Attention of Gysle
Shellum.

(c) Governing Law. This Agreement and any claim, controversy or dispute arising
under or related to this Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

(d) Submission to Jurisdiction. The Company hereby submits to the exclusive
jurisdiction of the U.S. federal and New York state courts in the Borough of
Manhattan in The City of New York in any suit or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. The Company
waives any objection which it may now or hereafter have to the laying of venue
of any such suit or proceeding in such courts. The Company agrees that final
judgment in any such suit, action or proceeding brought in such court shall be
conclusive and binding upon the Company and may be enforced in any court to the
jurisdiction of which Company is subject by a suit upon such judgment.

(e) Waiver of Jury Trial. Each of the parties hereto hereby waives any right to
trial by jury in any suit or proceeding arising out of or relating to this
Agreement.

(f) Counterparts. This Agreement may be signed in counterparts (which may
include counterparts delivered by any standard form of telecommunication), each
of which shall be an original and all of which together shall constitute one and
the same instrument.

(g) Amendments or Waivers. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.

(h) Headings. The headings herein are included for convenience of reference only
and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.

 

32

--------------------------------------------------------------------------------

If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

 

Very truly yours, PDC ENERGY, INC. By   /s/ Gysle Shellum   Title: Chief
Financial Officer

Accepted: September 28, 2012

J.P. MORGAN SECURITIES LLC

For itself and on behalf of the

several Initial Purchasers listed

in Exhibit A hereto.

 

By   /s/ Bob Mertensotto  

Authorized Signatory