***NEWS   FROM***


**Petroleum
      Development Corporation**








**FOR
      IMMEDIATE RELEASE:**  August 31, 2007


**CONTACT:**Celesta
      Miracle - (304)
      842-3597   http://www.petd.com





**Petroleum
      Development Corporation Is Evaluating**


**Formation
      of a Master Limited Partnership and Adopts Stockholder Rights
      Plan**




**Bridgeport,
      West Virginia –** Petroleum Development Corporation (NASDAQ/GSM: PETD)
      announced today that it is evaluating the formation of a master limited
      partnership, or MLP, with select assets from its existing portfolio of producing
      properties.  The assets being evaluated for initial inclusion in the
      MLP are long-lived reserves with low associated operating costs and low
      production decline rates.  PDC would continue to control the assets
      through its ownership of the general partner of the MLP and would have a
      significant retained interest in the equity of, and cash flows from, the
      MLP.  The size of the MLP being considered would involve an initial
      public offering of $100 to $150 million of common units representing partnership
      interests in the MLP.  PDC expects that it may use cash generated by
      the sale of MLP equity to help fund its accelerated drilling program, and PDC
      expects that the MLP could highlight the value of PDC’s mature assets and
      provide PDC with a tax-efficient vehicle bearing a low cost of equity for
      pursuing acquisitions.




PDC
      also
      announced that on August 28, 2007 its board of directors adopted a stockholder
      rights plan in which common stock purchase rights will be distributed as a
      dividend at the rate of one right for each share of common stock of PDC held
      by
      stockholders of record as of the close of business on September 14,
      2007.  The stockholder rights plan is designed to deter coercive
      takeover tactics, including the accumulation of shares in the open market or
      through private transactions, and to prevent an acquiror from gaining control
      of
      PDC without offering a fair price to all of PDC’s stockholders.  The
      stockholder rights plan was not adopted in response to a takeover
      offer.  The rights under the stockholder rights plan will expire on
      September 13, 2017.




PDC’s
      board of directors adopted the stockholder rights plan in order to enhance
      the
      likelihood that all stockholders can benefit over time from successful
      implementation of PDC’s new strategic direction and participate in the expected
      enhancement of long-term stockholder value.  The rights under the
      stockholder rights plan are intended to encourage anyone seeking to acquire
      PDC
      to negotiate with the board.




The
      rights under the stockholder rights plan generally will be exercisable only
      if a
      person or group acquires beneficial ownership of 15% or more of PDC’s common
      stock (excluding any stockholder that currently owns more than 15% of PDC’s
      common stock) or commences a tender or exchange offer upon consummation of
      which
      the person or group would beneficially own 15% or more of PDC’s common stock.
      Prior to a flip-in or flip-over event as described in the stockholder rights
      plan, each right under the stockholder rights plan will entitle stockholders
      upon exercise to buy one share of PDC’s common stock for $240.




A
      more
      detailed description of the stockholder rights plan and its operation will
      appear in PDC’s Current Report on Form 8-K, to be filed in the coming days with
      the Securities and Exchange Commission.  The Form 8-K will be
      available on PDC’s website:  www.petd.com.




Morgan
      Stanley is serving as financial advisor to PDC in connection with a general
      evaluation of PDC’s capital structure, including the potential formation of the
      MLP and the adoption of the stockholder rights plan.




THIS
      NEWS
      RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
      TO
      BUY ANY SECURITY.  ANY OFFERS, SOLICITATIONS OF OFFERS TO BUY, OR ANY
      SALES OF SECURITIES WILL ONLY BE MADE IN ACCORDANCE WITH THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT OF 1933 OR AN EXEMPTION
      THEREFROM.







*Continue
      to Page 2*





*Page
      2*







About
      Petroleum Development Corporation


Petroleum
      Development Corporation (www.petd.com) is an independent energy company engaged
      in the development, production and marketing of natural gas and oil. Its
      operations are focused in the Rocky Mountains with additional operations in
      the
      Appalachian Basin and Michigan. During the third quarter of 2004, PDC was added
      to the S&P SmallCap 600 Index. Additionally, PDC was added to the Russell
      3000 Index of Companies in 2003.





Certain
      matters discussed within this press release are forward-looking statements
      within the meaning of the Private Securities Litigation Reform Act of 1995.
      Although PDC believes the expectations reflected in such forward-looking
      statements are based on reasonable assumptions, it can give no assurance that
      its expectations will be attained. Factors that could cause actual results
      to
      differ materially from expectations include financial performance, oil and
      gas
      prices, drilling program results, drilling results, regulatory changes, changes
      in federal or state tax policy, changes in local or national economic conditions
      and other risks detailed from time to time in PDC's reports filed with the
      Securities and Exchange Commission, including quarterly reports on Form 10-Q,
      current reports on Form 8-K and annual reports on Form 10-K.







###