CONFORMED COPY

SECURITIES ANDEXCHANGE COMMISSION

Washington, D.C.  20549

Form 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF

   THE SECURITIES EXCHANGE ACT OF 1934

   For the fiscal year ended December 31, 2004

Commission File Number  000-51221

[]Transition Report Pursuant to Section 13 or 15(d) of the Securities  Exchange Act of 1934 for the transaction period from          to        

PDC 2004-D LIMITEDPARTNERSHIP

(Exact name ofregistrant as specified in its charter)

| West Virginia

(State or other jurisdiction of

incorporation or organization) | 20-0547582

(I.R.S. Employer 

Identification No.) |
|--------------------------------------------------------------------------------|----------------------------------------------------|

103 East Main  Street, Bridgeport, West Virginia  26330

(Address ofprincipal executive offices)     (zip code)

Registrant's telephone number, including areacode           (304) 842-3597 

SECURITIESREGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE

SECURITIESREGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

General and LimitedPartnership Interests

(Title of class)

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months and (2) has been subject tosuch filing requirements for the past 90 days.   Yes       No   X  

Indicate by check mark if disclosure of delinquent filerspursuant to Item 405 of Regulation S-K is not contained herein, and will becontained, to the best of registrant's knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.  [  ]

Indicate by check mark whether the registrant is anaccelerated filer (as definition in Rule 12b-2 of the Exchange Act). Yes   No X 

There is no tradingmarket for the registrant's securities.

PART I

ITEM 1.  BUSINESS.

General

      PDC 2004-D LimitedPartnership ("the Partnership") is a limited partnership formed on September 9, 2004 pursuant to the West Virginia Uniform Limited Partnership Act. Petroleum Development Corporation ("PDC") serves as Managing GeneralPartner of the Partnership.

      Since thecommencement of operations on September 9, 2004, the Partnership has beenengaged in onshore, domestic oil and natural gas exploration exclusively in theRocky Mountain Region.  A total of 27 limited partners contributed initialcapital of $747,376 and  a total of 1,084 additional general partnerscontributed initial capital of $34,251,651 and PDC (Managing General Partner)contributed $7,738,652 in capital as a participant in accordance withcontribution provisions of the Limited Partnership Agreement (the Agreement).

      Under the terms ofthe Agreement, the allocation of revenues is as follows:

|                                         | Allocation

of Revenues |
|-----------------------------------------|-------------------------|
| Additional General and Limited Partners | 80%                     |
| Managing General Partner                | 20%                     |

      Operating and directcosts are allocated and charged to the additional general and limited partnersand the Managing General Partner in the same percentages as revenues areallocated.  Leasehold, drilling and completion costs, and equipment costs areborne 80% by the additional general and limited partners and 20% by theManaging General Partner. See Footnote 4 of financial statements for a completedescription of the allocation of Partnership revenue and costs.

Employees

      The Partnership hasno employees, however, PDC has approximately 120 employees which include astaff of geologists, petroleum engineers, landmen and accounting personnel whoadminister all of the Partnership's operations.

Plan of Operations

      The Partnershipparticipated in the drilling of approximately forty-four gross wells, (43.94net wells), 17 in the fourth quarter of 2004 and 27 in the first quarter of 2005,and will continue to operate and produce its forty-four gross productive wells. At March 31, 2005, the Partnership does not have unexpended initial capitaland no additional drilling activity is planned.

      See Item 2 herein forinformation concerning the Partnership's gas wells.

Markets for Oil and Gas

      The availability of amarket for any oil and gas produced from the operations of the Partnership willdepend upon a number of factors beyond the control of the Partnership whichcannot be accurately predicted.  These factors include the proximity of thePartnership wells to and the capacity of natural gas pipelines, theavailability and price of competitive fuels, fluctuations in seasonal supplyand demand, and government regulation of supply and demand created by itspricing and allocation restrictions.  Oversupplies of gas can be expected tooccur from time to time and may result in the Partnership's wells being shut-inor curtailed.  Increased imports of oil and natural gas have occurred and areexpected to continue. The effects of such imports could adversely impact themarket for domestic oil and natural gas. All oil and gas is sold undercontracts based on market sensitive indexes that vary from month to month. Nofixed price contracts are in place.  The Partnership has had no sales in 2004.

2

Competition

      The Partnershipcompetes in marketing its gas and oil with numerous companies and individuals,many of which have financial resources, staffs and facilities substantiallygreater than those of the Partnership or Petroleum Development Corporation.

State Regulations

      State regulatoryauthorities have established rules and regulations requiring permits for welloperations, reclamation bonds and reports concerning operations.  States alsohave statutes and regulations concerning the spacing of wells, environmentalmatters and conservation, and have established regulations concerning theunitization and pooling of oil and gas properties and maximum rates ofproduction from oil and gas wells.  The Partnership believes it has complied inall material respects with applicable state regulations. The Partnershipestimates it has spent approximately $84,850 in 2004 to comply with federal andstate regulations.

Federal Regulations

      Regulation ofLiquid Hydrocarbons.  Liquid hydrocarbons (including crude oil and naturalgas liquids) were subject to federal price and allocation controls untilJanuary 1981 when controls were effectively eliminated by executive order ofthe President.  As a result, to the extent the Partnership sells oil producedfrom its properties, those sales are at unregulated market prices.

      Although it appearsunlikely under present circumstances that controls will be reimposed uponliquid hydrocarbons, it is possible Congress may enact such legislation at afuture date. 

      Natural GasRegulation. Sale of natural gas by the Partnership is subject to regulationof production, transportation and pricing by governmental regulatory agencies. Generally, the regulatory agency in the state where a producing well is locatedregulates production activities and, in addition, the transportation of gassold intrastate.  The Federal Energy Regulatory Commission (FERC) regulates theoperation and cost of interstate pipeline operators who transport gas. Currently the price of gas to be sold by the Partnership is not regulated byany state or federal agency.

      ProposedRegulation.  Numerous proposals concerning energy are being considered bythe United States Congress, various state legislatures and regulatoryagencies.  The possible outcome and effect of these proposals cannot beaccurately predicted.

      Environmental andSafety Regulation.  The Partnership believes that it complies, in allmaterial respects, with all legislation and regulations affecting itsoperations in the drilling and production of oil and gas wells and thedischarge of wastes.  To date, compliance with such provisions and regulationshas not had a material effect upon the Partnership's expenditures for capitalequipment, its operations or its competitive position.  The cost of suchcompliance is not anticipated to be material in the future.

ITEM 2.  PROPERTIES.

Drilling Activity.

     The Partnership commenceddrilling in the fourth quarter of 2004. As of December 31, 2004 the Partnership had 17 wells drilled and an additional 27 wells (all of which wereproductive) drilled as of March 31, 2005.  All Partnership wells to date aredevelopment wells and drilling activity was substantially completed by March 31, 2005.

Production 

See "Management's Discussion and Analysis" onpage 5 for Partnership production. 

3

Reserves

See "Footnote 7" to the Partnership's financialstatements for information related to the Partnership's oil and gas reserves.

 

Productive Wells

     The Partnership has a totalof 17  gross productive wells (16.97 net wells) all of which are located in Colorado.

     A "productivewell" is a well producing, or capable of producing, oil and gas incommercial quantities.  For purposes of the above table, a "grosswell" is one in which the Partnership has a working interest and a"net well" is a gross well multiplied by the Partnership's workinginterest to which it is entitled under its drilling agreement.

Title to Properties

      The Partnership'sinterests in producing acreage are in the form of assigned direct interests inleases.  Such properties are subject to customary royalty interests generallycontracted for in connection with the acquisition of properties and could besubject to liens incident to operating agreements, liens for current taxes andother burdens.  The Partnership believes that none of these burdens materiallyinterfere with the use of such properties in the operation of the Partnership'sbusiness.

      As is customary inthe oil and gas industry, little or no investigation of title is made at thetime of acquisition of undeveloped properties (other than a preliminary reviewof local mineral records).  Investigations are generally made, including inmost cases receiving a title opinion of legal counsel, before commencement ofdrilling operations. A thorough examination of title has been made with respectto all of the Partnership's producing properties and the Partnership believesthat it has generally satisfactory title to such properties.

ITEM 3.  LEGAL PROCEEDINGS.

      The Managing GeneralPartner as driller/operator is not party to any legal action that it believes wouldhave a materially adverse affect to the Managing General Partner's orPartnership's business, financial condition, results of operations or liquidity.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS.

      Not Applicable. 

PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

      At December 31, 2004,PDC 2004-D Limited Partnership had one Managing General Partner, 27 LimitedPartners who fully paid for 37.37 units at $20,000 per unit of limitedpartnership interests and a total of 1,084 Additional General Partners whofully paid for 1,712.58 units at $20,000 per unit of additional generalpartnership interests.  No established public trading market exists for theinterests.

      Limited andadditional general partnership interests are transferable, however no assigneeof an interest in the Partnership can become a substituted partner without thewritten consent of the transferor and the Managing General Partner. There is noestablished trading market for the securities of the Partnership.

4

 

 

 

ITEM 6.  SELECTED FINANCIAL DATA.

      The selectedfinancial data presented below has been derived from audited financialstatements of the Partnership appearing elsewhere herein.

|                                                                                | Period from September 9, 2004 (date of inception) to    December 31, 2004                                                             |
|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
| Oil and Gas Sales                                                              | $           -                                                   |
| Costs and Expenses                                                             | 544,391                                                                                                                          |
| Net Loss                                                                       | (499,790)                                                                                                                             |
| Allocation of Net Income (Loss):                                               |                                                                                                                                       |
|      Managing General Partner                         |                        5,039 |
|      Limited and Additional  General Partners         | (504,829)                                                                                                                             |
|      Per Limited and  Additional General Partner Unit | (288)                                                                                                                                 |
| Total Assets                                                                   | 38,745,949                                                                                                                       |
| Cash Distributions:                                                            |                                                                                                                                       |
|      Managing General Partner                         | -                                                                                                                 |
|      Limited and Additional  General Partners         | -                                                                                                                 |

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION

             AND RESULTS OF OPERATIONS.

Liquidity and Capital Resources

      The Partnership was funded on September 9, 2004 with initial Limited and Additional General Partner contributions of$34,999,027 and the Managing General Partner's cash contribution of $7,738,652in accordance with the Agreement.  After payment of syndication costs of $3,519,432and a one-time management fee to the managing general partner of $524,986, thePartnership had available cash of $38,693,262 for Partnership activities.

      The Partnership beganexploration and development activities subsequent to the funding of thePartnership and completed these activities by March 31, 2005.  Seventeen had been drilled by December 31, 2004 and twenty-seven in 2005.  No additionalwells will be drilled.

   The Partnership had net working capital at December 31, 2004 of $25,195.

      Operations are expected to beconducted with available funds and revenues generated from oil and natural gasactivities.  No bank borrowings are anticipated.

Results of Operations

2004 Results 

     Inaccordance with the Partnership agreement, a one-time management fee equal to 11/2% of investors' subscriptions was charged to the Partnership in the amountof $524,986 by the Managing General Partner.  This fee was paid by thePartnership to the Managing General Partner of the Partnership upon funding ofthe Partnership.

      The Partnership'srevenues from oil and natural gas sales will be affected by changes in prices.As a result of changes in federal regulations, gas prices are highly dependenton the balance between supply and demand. The Partnership's gas sales pricesare subject to increase and decrease based on various market sensitive indices.

 

                                                                                           5

 

 

 

Critical Accounting Policies and Estimates

     Certainaccounting policies are very important to the portrayal of Partnership'sfinancial condition and results of operations and requires management's mostsubjective or complex judgments. Inapplying those policies, our management uses its judgment to determine theappropriate assumptions to be used in the determination of certain estimates.Those estimates are based on our historical experience, our observance oftrends in the industry, and information available from other outside sources,as appropriate. For a more detailed discussion on the application of these andother accounting policies, see "Note 1 - Summary of significant accountingpolicies" in our financial statements and related notes. The Partnership's criticalaccounting policies and estimates are as follows:

RevenueRecognition

          Sales of natural gas are recognized whennatural gas has been delivered to a custody transfer point, persuasive evidenceof a sales arrangement exists, the rights and responsibility of ownership passto the purchaser upon delivery, collection of revenue from the sale isreasonably assured and the sales price is fixed or determinable.  Natural gasis sold by the Managing General Partner under contracts with terms ranging fromone month to three years.  Virtually all of the Managing General Partner'scontracts pricing provisions are tied to a market index, with certainadjustments based on, among other factors, whether a well delivers to agathering or transmission line, quality of natural gas and prevailing supplyand demand conditions, so that the price of the natural gas fluctuates toremain competitive with other available natural gas supplies.  As a result, thePartnership's revenues from the sale of natural gas will suffer if marketprices decline and benefit if they increase.  The Managing General Partnerbelieves that the pricing provisions of its natural gas contracts are customaryin the industry.

         The Managing General Partner currently uses the "Net-Back" method of accountingfor transportation arrangements of natural gas sales.  The Managing GeneralPartner sells gas at the wellhead and collects a price and recognizes revenuesbased on the wellhead sales price since transportation costs downstream of thewellhead are incurred by the Managing General Partner's customers and reflectedin the wellhead price.  

          Sales of oil are recognized when persuasive evidence of a sales arrangementexists, the oil is verified as produced and is delivered in a stock tank,collection of revenue from the sale is reasonably assured and the sales priceis determinable.  The Partnership is currently able to sell all the oil that itcan produce under existing sales contracts with petroleum refiners andmarketers.  The partnership does not refine any of its oil under short-termpurchase contracts at prices and in accordance with arrangements that arecustomary in the oil industry.

Use of Estimates inLong-Lived Asset Impairment Testing

Impairmenttesting for long-lived assets and intangible assets with definite lives isrequired when circumstances indicate those assets may be impaired.  Inperforming the impairment test, the Partnership would estimate the future cashflows associated with individual assets or groups of assets.  Impairment mustbe recognized when the undiscounted estimated future cash flows are less thanthe related asset's carrying amount.  In those circumstances, the asset must bewritten down to its fair value, which, in the absence of market price information,may be estimated as the present value of its expected future net cash flows,using an appropriate discount rate.  Although cash flow estimates used by thePartnership are based on the relevant information available at the time theestimates are made, estimates of future cash flows are, by nature, highlyuncertain and may vary significantly from actual results.

Oil and Gas Properties

     Explorationand development costs are accounted for by the successful efforts method.

                                                                                       6

     The Partnership assessesimpairment of capitalized costs of proved oil and gas properties by comparingnet capitalized costs to undiscounted future net cash flows on a field-by-fieldbasis using expected prices. Prices utilized in each year's calculation formeasurement purposes and expected costs are held constant throughout theestimated life of the properties. If net capitalized costs exceed undiscountedfuture net cash flow, the measurement of impairment is based on estimated fairvalue which would consider future discounted cash flows.

Property acquisitioncosts are capitalized when incurred.  Geological and geophysical costs anddelay rentals are expensed as incurred.  The costs of drilling exploratorywells are capitalized pending determination of whether the wells havediscovered economically producible reserves.  If reserves are not discovered,such costs are expensed as dry holes.  Development costs, including equipment andintangible drilling costs related to both producing wells and developmental dryholes, are capitalized.

Unproved propertiesor leases are written-off to expense when it is determined that they willexpire or be abandoned.

Costs of provedproperties, including leasehold acquisitions, exploration and development costsand equipment, are depreciated and depleted by the unit-of-production methodbased on estimated proved developed oil and gas reserves.

Upon sale orretirement of complete fields of depreciable or depletable property, the bookvalue thereof, less proceeds or salvage value, is credited or charged toincome.  Upon sale of a partial unit of property, the proceeds are credited toaccumulated depreciation and depletion.

Item 7A.  Quantitative and QualitativeDisclosure About Market Risk.

Market-Sensitive Instruments and Risk Management

     The Partnership's primarymarket risk exposure is commodity price risk.  This exposure is discussed indetail below:

Commodity Price Risk

        The Managing General Partner will utilizecommodity-based derivative instruments as hedges to manage a portion of itsexposure to price risk from its oil and natural gas sales and marketingactivities.   These instruments consist of natural gas futures contracts andoption contracts for CIG-based contracts traded by JP Morgan for Colorado production.  These hedging arrangements have the effect of locking in forspecified periods (at predetermined prices or ranges of prices) the prices theManaging General Partner will receive for the volume to which the hedgerelates.  As a result, while these hedging arrangements are structured toreduce Partnership's exposure to changes in price associated with the hedgedcommodity, they also limit the benefit the Partnership might otherwise havereceived from price changes associated with the hedged commodity.  The Partnership'spolicy prohibits the use of natural gas future and option contracts forspeculative purposes. 

There are no hedge contracts outstanding as of December 31, 2004 related to oil or natural gas production. 

The average NYMEX closing price for natural gas for theyear 2004 was $6.14 per Mmbtu.  The average NYMEX closing price for oil for theyear 2004 was $41.44 per bbl. The average CIG closing price for natural gas forthe year 2004 was $5.17 per Mmbtu.  Future near-term gas prices will beaffected by various supply and demand factors such as weather, government andenvironmental regulations and new drilling activities within the industry.

Disclosure of Limitations

     As the information aboveincorporates only those exposures that exist at December 31, 2004, it does not consider those exposures or positions which could arise after that date. As aresult, the Partnership's ultimate realized gain or loss with respect tocommodity price fluctuations will depend on the exposures that arise during theperiod, the Partnership's hedging strategies at the time and commodity pricesat the time.

 

7

 

 

PART III

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:

      The response to thisItem is set forth herein in a separate section of this Report, beginning onPage F-1.

ITEM9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE.

         NONE.

 

ITEM 9A. CONTROLS AND PROCEDURES

     Underthe supervision and with the participation of the Managing General Partner'smanagement, including the Managing General Partner's Chief Executive Officerand Chief Financial Officer, the Managing General Partner has evaluated theeffectiveness of the design and operation of its disclosure controls andprocedures (as defined in Exchange Act Rule 13a-14(c)) as of the end of theperiod covered by this annual report on Form 10-K, and, based on theirevaluation, the Chief Executive Officer and Chief Financial Officer haveconcluded that these disclosure controls and procedures are effective in allmaterial respects, including those to ensure that information required to bedisclosed in reports filed or submitted under the Securities Exchange Act is recorded,processed, summarized, and reported, within the time periods specified in theCommission's rules and forms, and is accumulated and communicated tomanagement, including the Managing General Partner's Chief Executive Officerand Chief Financial Officer, as appropriate to allow for timely disclosure.There have been no significant changes in our internal controls or in otherfactors that could significantly affect these controls in the fourth quarterand subsequent to the date of their evaluation.

 

ITEM 9B.  OTHER INFORMATION

 

     NONE

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

      The Partnership hasno directors or executive officers.  The Partnership is managed by PetroleumDevelopment Corporation (the Managing General Partner).  Petroleum DevelopmentCorporation's common stock is traded in the NASDAQ National Market and Form10-K for 2004 has been filed with the Securities and Exchange Commission.  

        Although the Partnership has no Code of Ethics,Petroleum Development Corporation, the Managing General Partner of thePartnership, has a Code of Ethics that applies to its senior executiveofficers.  The Code of Ethics is posted on the website of Petroleum DevelopmentCorporation at www.petd.com. 

 

ITEM 11.  EXECUTIVE COMPENSATION.

     NON-APPLICABLE.

ITEM12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS.

        NON-APPLICABLE.

 

 

 

                                                                                       8

 

 

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      Pursuant to theauthorization contained in the Limited Partnership Agreement, PDC receives feesfor services rendered and reimbursement of certain expenses from thePartnership. See respective drilling prospectus for further informationregarding the Limited Partnership Agreement. The following table presentscompensation or reimbursements by the Partnership to PDC or other relatedparties during the period ended from September 9, 2004 (date of iInception) to December 31, 2004.

| Drilling and completion costs | $38,693,262  |
|-------------------------------|-------------------|
| Syndication costs*            | 3,519,432    |
| Management fee                | 524,986      |
| Tax return preparation        | 6,510        |
| Direct administrative cost    | 4,545        |

* Consists of broker dealer commission paid to PDC SecuritiesIncorporated (100% subsidiary of the Managing General Partner and DealerManager of the drilling program) which was reallowed or paid to the SolicitingBroker Dealers of the drilling program.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES ANDSERVICES 

     For the period from September 9, 2004 (date of inception) to  December 31, 2004, the Partnership paid  KPMGLLP $7,350 for professional services for the audit of the partnership'sfinancial statement in its form 10-K and review of financial statements includedin the Partnership's 10-Q's and $1,000 for income tax services.

Pre-Approval Policies and Procedures

 

     The Sarbanes-Oxley Act of2002 requires that all services provided to the Partnership by its independentaccountants be subject to pre-approval by the Audit Committee or authorizedmembers of the Committee. Since the Partnership does not have an AuditCommittee, the Managing General Partner's Audit Committee also serves for thePartnership.  The Audit Committee has adopted policies and procedures forpre-approval of all audit services and non-audit services to be provided by thePartnership's independent accountants. Services necessary to conduct the annualaudit must be pre-approved by the Audit Committee or by the authorized AuditCommittee member. 

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

                    (1)   Financial Statements

                            See Index to FinancialStatements on F-2

                    (2)   Financial Statement Schedules

                          SeeIndex to Financial Statements on page F-2.  All financial statement schedulesare omitted because they are not required, inapplicable, or the information isincluded in the Financial Statements or Notes thereto.

    (3) Exhibits

| 4.1  | Form  of Limited Partnership Agreement (incorporated by reference to Appendix A to  Form S-1, SEC File No. 333-111260 and Rule 424 final prospectus, dated May 25, 2004, of PDC 2004-2006 Drilling Program, filed with the SEC on May 28, 2004).                                                                                                                                                                                                                                                                                                                                      |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 14   | Code  of Ethics of Petroleum Development Corporation (incorporated by reference to  the posted code on the web site of Petroleum Development Corporation at www.petd.com).

                                                                   9 |
| 31.1 | Rule  13a-14(a)/15d-14(c) Certification of Chief Executive Officer of Petroleum  Development Corporation, the managing general partner of the Limited  Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 31.2 | Rule  13a-14(a)/15d-14(c) Certification of Chief Financial Officer of Petroleum  Development Corporation, the managing general partner of the Limited  Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 32.1 | Title 18  U.S.C. Section 1350 (Section 906 of Sarbanes-Oxley Act of 2002)  Certifications by Chief Executive Officer and Chief Financial Officer of  Petroleum Development Corporation, the managing general partner of the  limited partnership.                                                                                                                                                                                                                                                                                                                                     |

10

CONFORMED COPY

SIGNATURES

     Pursuant to therequirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, theRegistrant has duly caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

|  | PDC 2004-D Limited Partnership

By its Managing General Partner

 Petroleum Development Corporation |
|--|----------------------------------------------------------------------------------------------------------|
|  | By /s/ Steven R. Williams 

 Steven R. Williams                                                |
|  | April 19,  2005                                                                                     |

     Pursuant to therequirements of the Securities Exchange Act of 1934, this report has beensigned below by the following persons on behalf of the Registrant and in thecapacities and on the dates indicated:

| Signature                                                                | Title                                                                               | Date                 |
|--------------------------------------------------------------------------|-------------------------------------------------------------------------------------|----------------------|
|                                                                          |                                                                                     |                      |
|                                                                          |                                                                                     |                      |
|                                                                          |                                                                                     |                      |
| /s/ Steven R. Williams

    Steven R. Williams       | Chairman, Chief Executive Officer, and

 Director                              | April 19, 2005       |
|                                                                          |                                                                                     |                      |
| /s/ Darwin L. Stump 

    Darwin L. Stump            | Chief Financial Officer and Treasurer

(principal financial and accounting officer) | April 19,  2005 |
|                                                                     |                                                                                     |                      |
| /s/ Thomas E. Riley 

    Thomas E. Riley            | President and Director                                                              | April 19, 2005       |
|                                                                          |                                                                                     |                      |
| /s/ Donald B. Nestor

    Donald B. Nestor           | Director                                                                            | April 19, 2005       |
|                                                                          |                                                                                     |                      |
| /s/ Vincent F. D'Annunzio

    Vincent F. D'Annunzio | Director                                                                            | April 19, 2005       |

11

PDC 2004-D LIMITED PARTNERSHIP

(A West Virginia Limited Partnership)

Financial Statements for Annual Report

on Form 10-K to Securities and Exchange

Commission

Period from September 9, 2004 (date of inception)

                                              to December 31, 2004

(With Independent Registered Public Accounting Firm'sReport Thereon)

F-1

PDC 2004-D LIMITEDPARTNERSHIP

(A West VirginiaLimited Partnership)

Index to FinancialStatements

|                                                                                                                      |     |
|----------------------------------------------------------------------------------------------------------------------|-----|
| Report of Independent Registered Public Accounting Firm                                                              | F-3 |
| Balance Sheet - December 31, 2004                                                                                    | F-4 |
| Statement of Operations -  Period from September 9, 2004

 (date of inception) to December 31, 2004        | F-5 |
| Statement of Partners' Equity  - Period from September 9, 2004  

(date of inception) to December 31, 2004 | F-6 |
| Statement of Cash Flows - Period from September 9, 2004

 (date of inception) to December 31, 2004              | F-7 |
| Notes to Financial Statements                                                                                        | F-8 |

All financial statement schedules have been omittedbecause they are not applicable or not required or the required information isshown in the financial statements or notes thereto.

F-2

IndependentAuditors' Report

To the Partners

PDC 2004-D Limited Partnership:

We have audited the accompanying balance sheet of PDC 2004-DLimited Partnership (a West Virginia limited partnership) as of December 31,2004, and the related statements of operations, partners' equity, and cashflows for the period from September 9, 2004 (date of inception) to December 31,2004.  These financial statements are the responsibility of the Partnership'smanagement.  Our responsibility is to express an opinion on these financialstatements based on our audit.

We conducted our audit in accordance with the standardsof the Public Company Accounting Oversight Board (United States).  Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement.  An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statement.  An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation.  We believe that our audit provides a reasonable basisfor our opinion. 

In our opinion, the financial statements referred toabove present fairly, in all material respects, the financial position of PDC 2004-DLimited Partnership as of December 31, 2004, and the results of its operationsand its cash flows for the period from September 9, 2004 (date of inception) toDecember 31, 2004, in conformity with U.S. generally accepted accountingprinciples.

KPMG LLP

Pittsburgh, Pennsylvania

April 19, 2005

F-3

PDC 2004-D LIMITEDPARTNERSHIP

(A West Virginia LimitedPartnership)

Balance Sheet

December 31, 2004

| Assets                                                                                        |                                                               |
|-----------------------------------------------------------------------------------------------|---------------------------------------------------------------|
|                                                                                          |                                                               |
| Current Assets:                                                                               |                                                               |
| Cash                                                                                          | $        44,655  |
|        Total current  assets                               | 44,655                                                   |
|                                                                                               |                                                               |
| Oil and gas  properties, successful efforts method 

    (notes 3 and 5): | 12,938,993                                               |
|     Less accumulated depreciation,  depletion and amortization            | -                                         |
|        Unevaluated  properties                             | 25,762,301                                               |
| Total oil and gas properties                                                                  | 38,701,294                                               |
|                                                                                               | $38,745,949                                              |
|                                                                                               |                                                               |
| Liabilities and Partners' Equity                                                              |                                                               |
|                                                                                          |                                                               |
| Current Liabilities:                                                                          |                                                               |
|      Due to Managing General Partner                                      | $       100                |
|      Accrued expenses                                                |     19,360                           |
|        Total current  liabilities                          | 19,460                                                   |
|                                                                                               |                                                               |
| Asset retirement obligation                                                                   | 8,032                                                    |
|                                                                                               |                                                               |
| Partners' equity                                                                              | 38,718,457                                               |
|                                                                                               | $38,745,949                                              |
|                                                                                               |                                                               |

See accompanying notes to financial statements.

F-4

PDC 2004-D LIMITEDPARTNERSHIP

(A West VirginiaLimited Partnership)

Statement ofOperations

Period from September 9, 2004 (date of inception)

to December 31, 2004

| Revenues:                                                                                                                                                                                                                                                                                                |                                                               |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|
|      Interest income                                                                                                                                                                                                                                             | $        44,601  |
| Expenses (note 3):                                                                                                                                                                                                                                                                                       |                                                               |
|      Management fee                                                                                                                                                                                                                                                             | 524,986                                                  |
|      Independent audit fee                                                                                                                                                                                                                                                      | 7,350                                                    |
|      Tax return preparation                                                                                                                                                                                                                                                     | 7,510                                                    |
|      Direct administrative  cost                                                                                                                                                                                                                                                |   4,545                                        |
|                                                                                                                                                                                                                                                                                                          | 544,391                                                  |
|                   Net  income (loss)                                                                                                                                                                           | $(499,790)                                                    |
|                                                                                                                                                                                                                                                                                                          |                                                               |
|                   Net  income (loss) per limited and additional

                    general  partner unit | $    (288)                                |
|                                                                                                                                                                                                                                                                                                          |                                                               |

See accompanying notes to financial statements.

F-5

PDC 2004-D LIMITED PARTNERSHIP

(A West VirginiaLimited Partnership)

Statement ofPartners' Equity

Period from September 9, 2004 (date of inception) to December 31, 2004

|                                          | Limited and

Additional 

General Partners | Managing

General Partner                                                                                                                                                                                                 |    Total   |
|------------------------------------------|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|
| Partners' initial  capital contributions | $34,999,027                           | 7,738,652                                                                                                                                                                                                            | 42,737,679                     |
| Syndication costs                        | (3,519,432)                                | -                                                                                                                                                                                                     | (3,519,432)                         |
| Net (loss) income                        |   (504,829)                      |                        5,039               |   (499,790)               |
|                                          |                                            |                                                                                                                                                                                                                           |                                     |
| Balance December 31, 2004                | $30,974,766                           | 7,743,691                                                                                                                                                                                                            | 38,718,457                     |
|                                          |                                            |                                                                                                                                                                                                                           |                                     |

See accompanyingnotes to financial statements.

F-6

PDC 2004-D LIMITEDPARTNERSHIP

(A West VirginiaLimited Partnership)

Statement of CashFlows

Period from September 9, 2004 (date of inception)

to December 31, 2004

| Cash flows from operating activities:                                                                                                                  |                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|
|      Net loss                                                                                                                 | $(499,790)                                                 |
|      Adjustments to reconcile  net loss to net cash

       used by  operating activities: |                                                            |
|          Changes  in operating assets and liabilities:                                                    |                                                            |
|          Increase  in due to Managing General Partner                                                     |          100  |
|          Increase  in accrued expenses                                                                    |   19,360                                    |
|                                                                                                                                                        |                                                            |
|                                                                                                                                                        | Net cash used by operating activities                      | (480,330) |
|                                                                                                                                                        |                                                            |
| Cash flows from investing activities:                                                                                                                  |                                                            |
|      Expenditures for oil and  gas properties                                                                                 | (12,930,961)                                               |
|      Expenditures for  unevaluated oil and gas properties                                                                     | (25,762,301)                                               |
|                                                                                                                                                        |                                                            |
|                                                                                                                                                        | Net cash used by investing activities                      | (38,693,262) |
|                                                                                                                                                        |                                                            |
| Cash flows from financing activities:                                                                                                                  |                                                            |
|       Limited and  additional general partner contributions                                                    | 34,999,027                                            |
|       Managing General  Partner contribution                                                                             | 7,738,652                                             |
|       Syndication cost  paid                                                                                             | (3,519,432)                                                |
|                                                                                                                                                        |                                                            |
|                                                                                                                                                        | Net cash provided from financing activities                | 39,218,247  |
|                                                                                                                                                        |                                                            |  |
|                                                                                                                                                        |                                                            |
| Net increase in cash                                                                                                                                   |  44,655                                          |
| Cash at beginning of period                                                                                                                            |        -      |
| Cash at end of period                                                                                                                                  | $        44,655              |
|                                                                                                                                                        |
|                                                                                                                                                        |                                                            |  |  |

See accompanying notes to financial statements.

F-7

PDC 2004-D LIMITEDPARTNERSHIP

(A West VirginiaLimited Partnership)

Notes to FinancialStatements

December 31, 2004

(1)    Summary of SignificantAccounting Policies

       PartnershipFinancial Statement Presentation Basis

The financialstatements include only those assets, liabilities and results of operations ofthe partners which relate to the business of PDC 2004-D Limited Partnership(the Partnership).  The statements do not include any assets, liabilities,revenues or expenses attributable to any of the partners' other activities.  PetroleumDevelopment Corporation ("PDC") serves as managing general partner of thePartnership.

 

Oil and GasProperties

The Partnershipfollows the successful efforts method of accounting for the cost of exploringfor and developing oil and gas reserves. Under this method, costs ofdevelopment wells, including equipment and intangible drilling costs related toboth producing wells and developmental dry holes, and successful exploratorywells are capitalized and amortized on an annual basis to operations by theunits-of-production method using estimated proved developed reserves which weredetermined at year end by an independent petroleum engineer, Wright &Company, Inc. If a determination is made that an exploratory well has notdiscovered economically producible reserves, then its costs are expensed as dryhole costs.  

The Partnershipassesses impairment of capitalized costs of proved oil and gas properties bycomparing net capitalized costs to undiscounted future net cash flows on afield-by-field basis using expected prices. Prices utilized in each year'scalculation for measurement purposes and expected costs are held constantthroughout the estimated life of the properties. If net capitalized costsexceed undiscounted future net cash flow, the measurement of impairment isbased on estimated fair value which would consider future discounted cashflows.

As of December 31, 2004, the Partnership signed a turnkey drilling agreement and paid drillingadvances of $38,693,262 to Petroleum Development Corporation, Managing GeneralPartner, for the drilling of the Partnership wells, leases and equipment. There were 17 wells drilled as of December 31, 2004. The Partnership had drilled an additional 27 wells (all of which were productive) as of March 31, 2005.  Drilling activity was completed by March 31, 2005.

Revenue Recognition

 

Sales of natural gas are recognized whennatural gas has been delivered to a custody transfer point, persuasive evidenceof a sales arrangement exists, the rights and responsibility of ownership passto the purchaser upon delivery, collection of revenue from the sale isreasonably assured and the sales price is fixed or determinable.  Natural gasis sold by the Managing General Partner under contracts with terms ranging fromone month to three years.  Virtually all of the Managing General Partner'scontracts pricing provisions are tied to a market index, with certainadjustments based on, among other factors, whether a well delivers to agathering or transmission line, quality of natural gas and prevailing supplyand demand conditions, so that the price of the natural gas fluctuates toremain competitive with other available natural gas supplies.  As a result, thePartnership's revenues from the sale of natural gas will suffer if marketprices decline and benefit if they increase.  The Managing General Partnerbelieves that the pricing provisions of its natural gas contracts are customaryin the industry.

F-8

PDC 2004-D LIMITEDPARTNERSHIP

(A West VirginiaLimited Partnership)

Notes to FinancialStatements

December 31, 2004

The Managing General Partner currentlyuses the "Net-Back" method of accounting for transportation arrangements ofnatural gas sales.  The Managing General Partner sells gas at the wellhead andcollects a price and recognizes revenues based on the wellhead sales pricesince transportation costs downstream of the wellhead are incurred by themanaging General Partner's customers and reflected in the wellhead price. 

Sales of oil are recognized when persuasiveevidence of a sales arrangement exists, the oil is verified as produced and isdelivered in a stock tank, collection of revenue from the sale is reasonablyassured and the sales price is determinable.  The partnership is currently ableto sell all the oil that it can produce under existing sales contracts withpetroleum refiners and marketers.  The Partnership does not refine any of itsoil production.  The Partnership's crude oil production is sold to purchasersat or near the Partnership's wells under short-term purchase contracts atprices and in accordance with arrangements that are customary in the oilindustry.

 

Income Taxes

Since the taxableincome or loss of the Partnership is reported in the separate tax returns ofthe partners, no provision has been made for income taxes on the Partnership'sbooks.

Under federal incometax laws, regulations and administrative rulings, certain types of transactionsmay be accorded varying interpretations. Accordingly, the Partnership's taxreturn and, consequently, individual tax returns of the partners may be changedto conform to the tax treatment resulting from a review by the Internal RevenueService.

Use of Estimates

The Partnership hasmade a number of estimates and assumptions relating to the reporting of assetsand liabilities and revenues and expenses and the disclosure of contingentassets and liabilities to prepare these financial statements in conformity withaccounting principles generally accepted in the United States of America. Actual results could differ from those estimates. Estimates which areparticularly significant to the financial statements include estimates of oiland gas reserves and future cash flows from oil and gas properties which areused in assessing impairment of long-lived assets.

(2)    Organization

The Partnership wasorganized as a limited partnership on September 9, 2004 in accordance with the laws of the State of West Virginia for the purpose of engaging in the drilling,completion and operation of oil and gas development and exploratory wells inthe Rocky Mountain Region.

Purchasers ofpartnership units subscribed to and fully paid for 37.37 units of limitedpartner interests and 1,712.58 units of additional general partner interests at$20,000 per unit (Investor Partners). Petroleum Development Corporation hasbeen designated the Managing General Partner of the Partnership. Althoughcosts, revenues and cash distributions allocable to the limited and additionalgeneral partners are shared pro rata based upon the amount of theirsubscriptions, including the Managing General Partner to the extent of itscapital contributions, there are significant differences in the federal incometax effects and liability associated with these different types of units in thePartnership.

F-9

PDC 2004-D LIMITED PARTNERSHIP

(A West Virginia Limited Partnership)

Notes to Financial Statements

Upon completion of the drilling phase ofthe Partnership's wells, all additional general partners units are convertedinto units of limited partner interests and thereafter become limited partnersof the Partnership. Limited partners do not have any rights to convert theirunits into units of additional general partner interests in the Partnership.

In accordance withthe terms of the Partnership Agreement (the Agreement), the Managing GeneralPartner manages all activities of the Partnership and acts as the intermediaryfor substantially all Partnership transactions.

(3)    Transactions with ManagingGeneral Partner and Affiliates

Pursuant to theauthorization contained in the Limited Partnership Agreement, PDC receives feesfor services rendered and reimbursement of certain expenses from thePartnership.  See respective drilling prospectus for further informationregarding the Limited Partnership Agreement. The following table presentscompensation or reimbursements by the Partnership to PDC or other relatedparties for the period from September 9, 2004 (date of inception) to December 31, 2004.

|                                | Period from 

September 9, 2004 

(date of inception)

to December 31, 2004 |
|--------------------------------|-----------------------------------------------------------------------------|
| Drilling  and completion costs | $38,693,262                                                            |
| Syndication  costs *           | 3,519,432                                                              |
| Management  fee                | 524,986                                                                |
| Tax  return preparation        | 7,510                                                                  |
| Direct  administrative cost    | 4,545                                                                  |

*Consists of brokerdealer commission paid to PDC Securities Incorporated (100% subsidiary of theManaging General Partner and Dealer manger of the drilling program) which wasreallowed or paid to the Soliciting Broker Dealers of the drilling program.

(4)    Allocation

The table belowsummarizes the participation of the Managing General Partner and the InvestorPartners, taking account of the Managing General Partner's capital contributionequal to a minimum of 20% of the initial capital, in the costs and revenues ofthe Partnership.

| Partnership Costs                          |  | Investor

Partners(5)(6) | Managing

General

Partner(5)(6) |
|--------------------------------------------|--|--------------------------|----------------------------------|
| Broker-dealer  Commissions and Expenses(1) |  | 100%                     | 0%                               |
| Management  Fee(2)                         |  | 100%                     | 0%                               |
| Undeveloped  lease costs                   |  | 0%                       | 100%                             |
| Drilling  and Completion Costs             |  | 80%                      | 20%                              |
| Tangible  Equipment                        |  | 0%                       | 100%                             |
| Intangible  Drilling and Development Costs |  | 100%                     | 0%                               |
| Operating  Costs (3)                       |  | 80%                      | 20%                              |
| Direct  Costs (4)                          |  | 80%                      | 20%                              |
| Administrative  Costs                      |  | 0%                       | 100%                             |
|                                            |  |                          |                                  |  |  |
|                                            |  |                          |                                  |  |  |

F-10

PDC 2004-D LIMITED PARTNERSHIP

(A West Virginia Limited Partnership)

Notes to Financial Statements

| Partnership  Revenues           |  |          |      |
|---------------------------------|--|----------|------|
|                                 |  |          |      |  |  |
| Sale of Oil and Gas  Production |  | 80%      | 20%  |
| Sale of Productive  Properties  |  | 80%      | 20%  |
| Sale of Equipment               |  |  0% | 100% |
| Sale of Undeveloped  Leases     |  | 80%      | 20%  |
| Interest  Income                |  | 80%      | 20%  |
|                                 |  |          |      |  |  |

____________________

(1)  Organizationand offering costs, net of the dealer manager commissions, discounts, duediligence expenses, and wholesaling fees of the Partnership were paid by theManaging General Partner and not from Partnership funds.  In addition,organization and offering costs in excess of 10-1/2% of Subscriptions were paidby the Managing General Partner, without recourse to the Partnership.

(2)  Representsa one-time fee paid to the Managing General Partner on the day the Partnershipis funded equal to 1-1/2% of total investor subscriptions.

(3)  RepresentsOperating costs incurred after the completion of productive wells, includingmonthly per-well charges paid to the Managing General Partner.

(4)  TheManaging General Partner receives monthly reimbursement from the Partnershipfor their direct costs incurred by the Managing General Partner on behalf ofthe Partnership.

(5)  Tothe extent that Investor Partners receive preferred cash distributions, theallocations for Investor Partners will be increased accordingly and theallocation for the Managing General Partner will likewise be decreased.

(6)  Theallocation of profits, losses and cash distributions of the Managing GeneralPartner might be increased, and the allocation of profits, losses, and cashdistributions of the Investor Partners might be decreased in the event that theManaging General Partner were to invest more than the Managing GeneralPartner's minimum required Capital Contribution to cover tangible equipment andlease costs. TheManaging General Partner will pay for the Partnership's share of all Leases andtangible well equipment.  The entire Capital Contribution of the InvestorPartners, after payment of brokerage commissions, due diligence reimbursement,and the Management Fee, will be utilized to pay for intangible drilling costs.In the event that the Intangible Drilling Costs exceed the funds of theInvestor Partners available for payment of Intangible Drilling Costs (herein"excess IDC"), a portion of the Capital Contribution of the ManagingGeneral Partner may be used to pay such excess IDC.  If the cost of Leases andtangible well equipment were to exceed the Managing General Partner's CapitalContribution of approximately 22% of the aggregate Capital Contribution of theInvestor Partners, then the Managing General Partner will increase its CapitalContribution to fund such additional capital requirements and the ManagingGeneral Partner's allocation of profits, losses, and cash distributions will beincreased to equal the percentage arrived at by dividing the CapitalContribution made by the Managing General Partner by the Capital Available forInvestment; the allocation of the Investor Partners will be decreasedaccordingly.

(7)  Inaccordance with the repurchase provision of the partnership prospectus, PDC mayrepurchase units from the investor partners, which is entirely voluntary on thepart of the partners. During 2004 there were no units purchased by PDC.

F-11

PDC 2004-D LIMITED PARTNERSHIP

(A West Virginia Limited Partnership)

              Notesto Financial Statements

 (5)    CostsRelating to Oil and Gas Activities

The Partnership isengaged solely in oil and gas activities, all of which are located in thecontinental United States.  Information regarding aggregate capitalized costsand results of operations for these activities is located in the basicfinancial statements.  Costs capitalized for these activities at December 31, 2004, are as follows:

| Lease  acquisition costs       | $618,800                             |
|--------------------------------|-------------------------------------------|
| Intangible  development costs  | 9,516,125                            |
| Well  equipment                | 2,796,036                            |
| Capital  asset retirement cost |      8,032  |
|                                | $12,938,993                          |

The followingadditional costs were incurred for the Partnership's oil and gas activities:

|                                   |         Period from 

 September 9, 2004

   (date  of inception)

to  December 31, 2004 |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
| Cost  incurred:                   |                                                                                                                                       |
|  Property  acquisition costs | $     618,800                                                                                           |  
 Development  costs

12,312,161 

 
 Unevaluated  oil and gas properties

25,762,301 

 
$38,693,262 

 
Unevaluated oil andgas properties consist of payments to the managing general partner fordrilling, completion, lease acquisition and gathering system costs on 27 wellsdrilled prior to March 31, 2005.  All of the 27 wells drilled are productive.

(6)    IncomeTaxes

As a result of thedifferences in the treatment of certain items for income tax purposes asopposed to financial reporting purposes, primarily depreciation, depletion andamortization of oil and gas properties and the recognition of intangibledrilling costs as an expense or capital item, the income tax basis of oil andgas properties differs from the basis used for financial reporting purposes.  At December 31, 2004, the income tax basis of the Partnership's oil and gasproperties was $7,738,652.

(7)    Supplemental Reserve Information (Unaudited)

Proved oil and gasreserves of the Partnership have been estimated at December 31, 2004 by an independent petroleum engineer, Wright & Company, Inc. These reserves have beenprepared in compliance with the Securities and Exchange Commission rules basedon year end prices. A copy of the reserve report has been made available to allpartners. All of the partnership's reserves are proved developed. An analysisof the change in estimated quantities of proved developed oil and gas reservesis shown below:

Oil  (Bbls)

2004

 
Proved developed reserves:

 
Beginning of year

-    

 
New Discoveries and extensions

 
     Rocky Mountain Region

  179,000

 
End of year

 179,000

 
F-12PDC 2004-D LIMITED PARTNERSHIP

(A West Virginia Limited Partnership)

Notes to Financial Statements

Gas  (MCF)

2004

 
Proved developed reserves:

 
Beginning of year

-    

 
New Discoveries and extensions

 
     Rocky Mountain Region

3,615,000 

 
End of year

3,615,000 

 
(8)    StandardizedMeasure of Discounted Future Net Cash Flows and Changes Therein Relating toProved      Oil and Gas Reserves (Unaudited)

Summarized in the following table is information for the Partnership withrespect to the standardized measure of discounted future net cash flowsrelating to proved oil and gas reserves.  Future cash inflows are computed byapplying year-end prices of oil and gas relating to the Partnership provedreserves to the year-end quantities of those reserves.  Future production,development, site restoration and abandonment costs are derived based oncurrent costs assuming continuation of existing economic conditions. 

As of  December 31, 2004

 
Future estimated revenues

 $  29,029,000 

 
Future estimated production costs

(6,730,000)

 
Future estimated development costs

(1,129,000)

 
   Future net cash flows

21,170,000 

 
10% annual discount for estimated timing of cash flows

(9,326,000)

 
   Standardized measure of discounted  future

 
     estimated net cash flows

$11,844,000 

The following table summarizes the principal sources of change in thestandardized measure of discounted future estimated net cash flows:

Period  from September 9, 2004 (date of inception) to December 31,  2004

 
Extensions,  discoveries, and improved recovery,   less related cost

  $8,239,000 

 
Development costs incurred during the  period

12,931,000 

 
Less 10% discount

(9,326,000)

 
$11,844,000 

 
It isnecessary to emphasize that the data presented should not be viewed asrepresenting the expected cash flow from, or current value of, existing provedreserves since the computations are based on a large number of estimates andarbitrary assumptions.  Reserve quantities cannot be measured with precisionand their estimation requires many judgmental determinations and frequentrevisions.  The required projection of production and related expenditures overtime requires further estimates with respect to pipeline availability, rates ofdemand and governmental control. Actual future prices and costs are likely tobe substantially different from the current prices and costs utilized in thecomputation of reported amounts.  Any analysis or evaluation of the reportedamounts should give specific recognition to the computational methods utilizedand the limitations inherent therein.

F-13 |