Petroleum
Development Corporation


3Q 2008
Earnings Release


November
6, 2008


Richard
W. McCullough, President & CEO


Bart
Brookman, SVP Exploration & Production


NASDAQ
GMS:PETD





Disclaimer


The
following information contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based on Management’s current expectations and beliefs, as well
as a number of assumptions concerning future events.





These
statements are based on certain assumptions and analyses made by Management in
light of its experience and its perception of historical trends, current
conditions and expected future developments as well as other factors it believes
are appropriate in the circumstances.  However, whether actual results
and developments will conform with Management’s expectations and predictions is
subject to a number of risks and uncertainties, general economic, market or
business conditions; the opportunities (or lack thereof) that may be presented
to and pursued by Petroleum Development Corporation; actions by competitors;
changes in laws or regulations; and other factors, many of which are beyond the
control of Petroleum Development Corporation.





You are
cautioned not to put undue reliance on such forward-looking statements because
actual results may vary materially from those expressed or implied, as more
fully discussed in our safe harbor statements found in our SEC filings,
including, without limitation, the discussion under the heading “Risk Factors”
in the company’s annual report on Form 10-K. All forward-looking statements are
based on information available to Management on this date and Petroleum
Development Corporation assumes no obligation to, and expressly disclaims any
obligation to, update or revise any forward looking statements, whether as a
result of new information, future events or otherwise.


The SEC
permits oil and gas companies to disclose in their filings with the SEC only
proved reserves, which are reserve estimates that geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years
from known reservoirs under existing economic and operating conditions. The
Company uses in this presentation the terms “probable” and “possible” reserves,
which SEC guidelines prohibit in filings of U.S. registrants. Probable reserves
are unproved reserves that are more likely than not to be recoverable. Possible
reserves are unproved reserves that are less likely to be recoverable than
probable reserves. Estimates of probable and possible reserves which may
potentially be recoverable through additional drilling or recovery techniques
are by nature more uncertain than estimates of proved reserves and accordingly
are subject to substantially greater risk of not actually being realized by the
Company. In addition, the Company’s production forecasts and expectations for
future periods are dependent upon many assumptions, including estimates of
production decline rates from existing wells and the undertaking and outcome of
future drilling activity, which may be affected by significant commodity price
declines or drilling cost increases.





This
material also contains certain non-GAAP financial measures as defined under the
Securities and Exchange Commission rules.





Rick
McCullough


President
& CEO





Improving
Fundamentals





20082006
            2007
            1Q
            2Q
            3QProduction
      (Bcfe)
            17
            28
            8.5
            8.8
            10.2Proved
      Reserves
            323
            686
            N/A
            797(1)
            N/ARealized
      Gas Prices(2)
            $6.91
            $6.52
            $8.16
            $9.48
            $9.49Adj
      EBITDA ($ thousands)(3)
            $80,285
            $136,068
            $43,561
            $55,542
            $59,116Adj
      Cash Flow from Operations
              ($
      thousands)(3)
            $29,769
            $95,626
            $40,388
            $59,208
            $59,108Adj
      Cash Flow from Operations (/Share)(3)
            $2.00
            $6.44
            $2.72
            $4.02
            $3.98Stock
      Price(4)
            $32-$47
            $35-$61
            $50-$73
            $52
            $20.71


(1)The
reserves noted are internal mid-year estimates


(2)Equivalent
prices including oil sales, natural gas liquids and realized derivative gains
and losses. Excludes non-realized derivative gains & losses


(3)See
Slides 22 & 23 for GAAP reconciliation of Adjusted EBITDA, Adjusted Cash
Flow respectively.  Gain on leasehold sale in 2006
excluded.


(4)Monthly
closing ranges.  Third quarter 2008 amount is the October 31, 2008
closing price.





See
Slide 2 regarding Forward Looking Statement








Quarterly
Highlights & Updates


•
            32%
      production increase 3Q 2008 over 3Q 2007 and 16% production increase in 3Q
      2008 over 2Q 2008


•
            Unrealized
      hedging gains of $172.2 MM for 3Q
2008


•
            Key
      financial metrics (comparisons to 3rd
      Quarter of 2007):


–
            Oil
      & Gas Sales up 124%


–
            Average
      realized prices per Mcfe up 56% to $9.49 (including realized
      derivatives)


–
            Adjusted
      Cash Flow from Operations(1)
      increased $27.5 MM up 87%


–
            Adjusted
      Net Income(2)
      is $16.1 MM or $1.08/share up 112%


–
            Costs
      are generally in line with
expectations


•
            Gysle
      Shellum named Chief Financial Officer effective November 11,
      2008


(1)See
Slide 23 for GAAP reconciliation of Adjusted Cash Flow from
Operations


(2)See
Slide 24for GAAP reconciliation of Adjusted Net Income





See
Slide 2 regarding Forward Looking Statement





Summary
Financial Results





20082007
              Annual
            1Q
            2Q
            3Q$/MCFE
            $/MCFE
            $/MCFE
            $/MCFEO&G
      Revenues
            6.26
            8.45
            11.23
            9.76O&G
      Operating Margins(1)
            4.50
            6.31
            8.86
            7.58Adjusted
      EBITDA(2)
            4.87
            5.14
            6.36
            5.81Adjusted
      Net Income /(Loss)(2)
            0.97
            1.32
            2.27
            1.58Adjusted
      Cash Flow from Operations Per Mcfe(2)
            3.42
            4.76
            6.73
            5.81Adjusted
      Cash Flow from Operations Per Share(2)
            6.44
            2.72
            4.02
            3.98


(1)
O&G Operating Margins is defined as O&G sales less O&G production
and well operations costs.


(2) See
Slides 22, 23 and 24 for GAAP reconciliation of Adjusted EBITDA, Adjusted Cash
Flow and Adjusted Net Income, respectively.





See
Slide 2 regarding Forward Looking Statement








Summary
Financial Results (continued)





2007
              Annual
            20081Q
            2Q
            3Q$/MCFE
            $/MCFE
            $/MCFE
            $/MCFEDD&A
            2.53
            2.49
            2.51
            2.56G&A(1)
            1.11
            1.16
            1.05
            0.80Lifting
      Cost(2)
            0.90
            1.13
            1.13
            0.94Production
      Taxes
            0.44
            0.59
            0.79
            0.68





(1)
            1Q
      2008 includes $3.2MM and 3Q2008 includes $1.1 MM non-recurring costs
      associated with executive transition.  The 2008 nine month
      G&A = $0.99/Mcfe and if non-recurring items above are
      excluded  the nine month G&A =
  $0.83/Mcfe


(2)
            Lifting
      Cost does not include production
taxes.





See
Slide 2 regarding Forward Looking Statement





Debt
Maturity Schedule ($MM) {Graphic}


•
            $300
      million revolver matures November 4,
2010


•
            Maturity
      schedule reflects:


–
            Mitigation
      of liquidity risk


–
            Diversification
      of funding sources


–
            Expect
      to complete $75 million revolver borrowing base upsize initiative by mid
      November 2008


–
            Current
      revolver availability enhanced by expected $75 million upsize provides
      strong liquidity position


(1)
            $122
      MM Drawn balance and $47 MM cash balance as of September 30,
      2008





See
Slide 2 regarding Forward Looking Statement





Energy
Market Exposure {Graphic}


Percentage
of Mcfe Sold by Market (For Three Months ended September 30, 2008)


Colorado
Interstate Gas, 37%


Crude
Oil, 17%


Midcontinent,
15%


Nymex,
11%


San Juan
Basin, 9%


Michigan,
4%


Southern
California, 4%


Colorado Liquids, 2%


Northern
Border, 1%


See
Slide 2 regarding Forward Looking Statement







Pro
Forma Marginal Economics(1)


Pricing
      ScenariosO&G
      Revenues
            $4.00
            $5.00
            $6.00Operating
      Margin(2)
            2.23
            3.16
            4.09EBITDA(3)
            0.49
            1.42
            2.35Interest
            $0.65
            $0.65
            $0.65F&D/DD&D
            $1.35
      / $2.56
            $1.35
      /  $2.56
            $1.35
      /  $2.56


(1)Based
on 3Q 2008 production & cost levels


(2)O&G
Operating Margins is defined as O&G sales less O&G production and well
operations costs


(3)
EBITDA calculated similarly to Adjusted EBITDA reconciliation on slide
22


See
Slide 2 regarding Forward Looking Statement





Hedges
in Place


4Q
      2008
            2009
            2010Weighted
      Average Hedge PriceWith
      Floors
            $9.45
            $8.73
            $10.09With
      Ceilings
            $9.55
            $10.80
            $12.03%
      of 9/30/08 Production
            63%
            58%
            19%Weighted
      Avg Forward Prices (1)
            $5.91
            $7.17
            $7.91Blended
      Pricing @ 9/30/08 Production Levels
            $8.14
            $8.10
            $8.51Blended
      Pricing @ 20% Increase in Production
            
            $7.94
            $8.41


(1)Assuming
forward prices as of October 31, 2008 for unhedged production


See
Slide 2 regarding Forward Looking Statement





CAPEX
Spending & Production Growth


2006
            2007
            2008CAPEX
      Total ($MM)
            $146
            $264
            $305(1)CAPEX
      Developmental ($MM)
            $124(2)
            $224
            $256(1)Organic
      Production Growth
            20%(2)
            32%
      (2)
            38%


(1)Projected
as of November 2008 for year-end actual.


(2)Internal
estimate


See
Slide 2 regarding Forward Looking Statement





Bart
Brookman


SVP
Exploration & Production





Increasing
Production {Graphic}


•
            32%
      improvement over 3Q 2007


•
            Record
      10.2 Bcfe 3Q 2008


•
            16%
      improvement over 2Q 2008


See
Slide 2 regarding Forward Looking Statement





2008
Production Forecast {Graphic}


•
            Estimated
      2008 production of 38 - 39 Bcfe.


•
            Piceance
      production currently curtailed at 10% –
15%


–
            Anticipated
      curtailments through 4Q 2008


•
            Current
      production slightly below forecast due to
  curtailments





See
Slide 2 regarding Forward Looking Statement





2008
Production Forecast





2008
Forecast by Area(1)
(Mmcfe)


ForecastArea
            9
      Mos
              Actuals
            Actual/
              Forecast
            1Q
            2Q
            3Q
            4Q
            2008Rocky
      Mountain
            23,348
            103%
            7,050
            7,478
            8,243
            9,702-10,152
            32,473-32,923Appalachia
            2,926
            93%
            974
            1,001
            1,164
            1,133
            4,272Michigan
            1,174
            100%
            389
            388
            387
            398
            1,562Company
      Total
            27,448
            101%
            8,413
            8,867
            9,794
            11,233-11,683
            38,307-38,757








Rocky
Mountain Forecast by Area(1)
(Mmcfe)


ForecastArea
            9
      Mos
              Actual
            Actual/
              Forecast
            1Q
            2Q
            3Q
            4Q
            2008Wattenberg
            11,152
            112%
            3,088
            3,344
            3,524
            4,366
            13,652Grand
      Valley
            8,459
            99%
            2,833
            2,676
            3,062
            3,730-4,180
            12,301-12,571NECO
            3,517
            87%
            1,077
            1,370
            1,583
            1,470
            5,765North
      Dakota
            153
            71%
            52
            88
            74
            60
            323Other
            68
            NA
            NA
            NA
            NA
            76
            76Rocky
      Mountain Total
            23,348
            103%
            7,050
            7,478
            8,243
            9,702-10,152
            32,473-32,923


(1)  4Q
2008 & 2008 total forecast revised November 2008


See
Slide 2 regarding Forward Looking Statement





Drilling
Activity {Graphic}


See
Slide 2 regarding Forward Looking Statement





Reserves{Graphic}


Mid-Year
2008 Reserves Summary


•
            797
      Bcfe proved reserves


•
            15%
      improvement from YE 2007


•
            1.17
      Tcfe 3P reserves(1)


•
            3P
      does not include Barnett or
Marcellus


(1) The
reserves noted are internal estimates


See
Slide 2 regarding Forward Looking Statement








Marcellus
Update {Graphic}


PDC
Areas of Operations


*Subject
to upward or downward adjustment depending upon obtaining necessary curative
instruments


to
perfect title.


•
            11,000
      net Marcellus acres in Central PA*


•
            25,000
      net Marcellus acres in WV*


•
            16,500
      net shallow Marcellus acres in NY*


•
            3,000
      ft depth, under pressured, & lower per well reserves
      expected


•
            Majority
      of PA & WV acreage is HBP


•
            Will
      commence drilling 1st
      PDC Marcellus test in WV Nov 12


•
            4
      Marcellus tests are planned in 4Q 2008 & early 1Q
  2009


•
            Strong
      technical focus on Marcellus in
2009


See
Slide 2 regarding Forward Looking Statement





2008
4Q Developments


•
            Modest
      slowdown in drilling in Wattenberg & NECO relative to
    plan


•
            Production
      curtailment in Piceance anticipated through late 4th
      quarter – approximately 10,000
mcf/day


•
            Drilling
      will begin on first Marcellus well in
WV


•
            Production
      gains in Appalachian basin anticipated with lower line pressures and
      colder weather


•
            Very
      strong production in Wattenberg


•
            Startup
      of facility expansions in Wattenberg anticipated in
    mid-2009


•
            Fourth
      Barnett well fraced early Nov – closely monitoring production/reserves/
      pricing


•
            Up
      to four Bakken tests planned on North Dakota acreage – Joint Venture –
      minimal capital commitments by PDC


See
Slide 2 regarding Forward Looking Statement





3Q
2008 Financial Results


Appendix





Adjusted
EBITDA Reconciliation ($ in thousands)





Adjusted
      EBITDA
            2006
            2007
            1Q08
            2Q08
            3Q08Net
      Income(loss)
            $237,772
            $33,209
            ($13,928)
            ($40,712)
            $129,896Gain
      on Sale of Leasehold
            ($328,000)
            -
            -
            -
            -Unrealized
      Derivative (Gain)Loss
            (7,252)
            4,417
            39,899
            86,444
            (172,154)Litigation
      Provision
            -
            -
            -
            4,195
            (170)Interest,
      net
            (5,607)
            6,617
            4,661
            6,319
            7,666Income
      Taxes
            149,637
            20,981
            (8,202)
            (22,809)
            68,233Depreciation
            33,735
            70,844
            21,131
            22,105
            28,645Adjusted
      EBITDA
            $80,285
            $136,068
            $43,561
            $55,542
            $59,116


See
Slide 2 regarding Forward Looking Statement








Adjusted
Cash Flow Reconciliation ($ in thousands)





Adjusted
      Cash Flow Operations
            2006
            2007
            1Q08
            2Q08
            3Q08Net
      Cash Used in Operating Activities
            $67,390
            $60,304
            $48,789
            $18,942
            $36,062Changes
      in Assets & Liabilities to Operations
            (37,621)
            35,322
            (8,401)
            40,266
            23,046Adjusted
      Cash Flow from Operations
            $29,769
            $95,626
            $40,388
            $59,208
            $59,108


See
Slide 2 regarding Forward Looking Statement





Adjusted
Net Income Reconciliation ($ in thousands)




Adjusted Net Income
            2006
            2007
            1Q08
            2Q08
            3Q08Net
      income (loss)
            N/A
            $33,209
            ($13,928)
            ($40,712)
            126,896Unrealized
      derivative (gain) loss
            N/A
            (4,417)
            39,899
            86,444
            (172,154)Litigation
      provision
            N/A
            -
            -
            4,195
            (170)Tax
      effect
            N/A
            (1,632)
            (15,042)
            (29,467)
            61,520Adjusted
      net income
            N/A
            $27,160
            $10,929
            $20,460
            $16,092


See
Slide 2 regarding Forward Looking Statement




Petroleum
Development Corporation


3Q 2008
Earnings Release


November
6, 2008


Richard
W. McCullough, President & CEO


Bart
Brookman, SVP Exploration & Production


NASDAQ
GMS:PETD