completion attempts are made in theslightly shallower Niobrara carbonate reservoir.  Unlike the other twoRocky Mountain areas, the Wattenberg Field produces a considerable amount of oiland, to a lesser extent, natural gas liquids, (or “NGL’s”).

 net, oil andnatural gas wells.  Leasehold positions encompass approximately 8,000gross acres remaining for development as of December 31, 2009.  1gross and 1 
net well was drilled in the area in 2009 andproduced approximately 15.7 Bcfe.  Development wells drilled in thearea range from 7,000 to 9,500 feet in depth and the majority of wells aredrilled directionally from multi-well pads ranging from two to ten wells perdrilling pad.  The primary target in the area is gas reserves,developed from multiple sandstone reservoirs in the Mesaverde Williams Forkformation.  Well spacing is approximately 10 acres perwell.

|   | Wells      Drilled                |                                                    |                       |                                                    |   |                                                    |   |                                                    |   |                                                    |   |                                                    |   |   |   |   |
|--------|-----------------------------------|---------------------------------------------------------|----------------------------|---------------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------------|--------|--------|--------|--------|
|   |                              |                                                    |                       |                                                    |   |                                                    |   |                                                    |   |                                                    |   |                                                    |   |   |   |   |
|   |                              | Three      Months Ended December 31,                    | Year-End      December 31, |                                                    |   |
|   |                              | 2009                                                    |                       |                                                    |   | 2008                                                    |   |                                                    |   | 2009                                                    |   |                                                    |   | 2008   |   |   |
|   |                              | Gross                                                   |                       | Net                                                     |   | Gross                                                   |   | Net                                                     |   | Gross                                                   |   | Net                                                     |   | Gross  |   | Net    |
|   |  Rocky      Mountain Region: |                                                    |                       |                                                    |   |                                                    |   |                                                    |   |                                                    |   |                                                    |   |   |   |   |
|   | Wattenberg                        | 23                                                      |                       | 12.8                                                    |   |       33                  |   | 31.4                                                    |   | 82                                                      |   | 65.2                                                    |   | 149    |   | 122.7  |
|   | Piceance                          |          - |                       |          - |   |       12                  |   | 12.0                                                    |   | 1                                                       |   | 1.0                                                     |   | 62     |   | 54.4   |
|   | NECO                              | 1                                                       |                       | 1.0                                                     |   |       10                  |   | 10.0                                                    |   | 8                                                       |   | 4.5                                                     |   | 98     |   | 88.2   |
|   | Other                             |          - |                       |          - |   |          - |   |          - |   | 1                                                       |   | 0.5                                                     |   | 2      |   | 0.5    |
|   | Total      Rocky Mountain Region  | 24                                                      |                       | 13.8                                                    |   |       55                  |   | 53.4                                                    |   | 92                                                      |   | 71.2                                                    |   | 311    |   | 265.8  |
|   | Appalachian      Basin            | 1                                                       |                       | 1.0                                                     |   |       25                  |   | 25.0                                                    |   | 8                                                       |   | 8.0                                                     |   | 62     |   | 62.0   |
|   | Other                             |          - |                       |          - |   |         1       |   | 1.0                                                     |   |          - |   |          - |   | 6      |   | 5.6    |
|   |  Total      Wells Drilled    | 25                                                      |                       | 14.8                                                    |   | 81                                                      |   | 79.4                                                    |   | 100                                                     |   | 79.2                                                    |   | 379    |   | 333.4  |
|   |                              |                                                    |                       |                                                    |   |                                                    |   |                                                    |   |                                                    |   |                                                    |   |   |   |   |

| Average      Costs Related to Oil and Gas Operations (per Mcfe)                               |
|-----------------------------------------------------------------------------------------------|
|                                                                                          |   |   |   |   |   |   |   |   |
|                                                                                          |   | Three      Months Ended | Twelve      Months Ended |
|                                                                                          |   | December      31, |   | December      31, |
|                                                                                          |   | 2009 |   | 2008 |   | 2009 |   | 2008 |
| Average      lifting costs (lease operating expense, exclusive of production      taxes) |  $        0.98 |   |  $        1.09 |   |  $        0.83 |   |  $        1.07 |
| Exploration      expense (less impairment and amortization)                                   |  $        0.48 |   |  $        0.44 |   |  $        0.35 |   |  $        0.50 |
| DD&A      (oil and gas properties only)                                                   |   |  $        2.82 |   |  $        2.73 |   |  $        2.83 |   |  $        2.51 |

|                                 | Three      Months Ended December 31, |   |                                                                                                                                                         |   | Year-Ended      December 31, |   |       |
|--------------------------------------|--------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|------------|
|                                 | 2009                                 |   | 2008                                                                                                                                                         |   | Percent                      |   | 2009       |   | 2008 |   | Percent |
| Natural      Gas (Mcf)               |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Rocky      Mountain Region           | 6,791,946                            |   | 7,808,760                                                                                                                                                    |   | -13.0%                       |   | 29,987,465 |   | 26,136,487 |   | 14.7% |
| Appalachian      Basin               | 1,039,138                            |   | 1,006,684                                                                                                                                                    |   | 3.2%                         |   | 4,010,511  |   | 3,902,183 |   | 2.8% |
| Other                                | 403,035                              |   | 501,337                                                                                                                                                      |   | -19.6%                       |   | 1,538,116  |   | 1,721,122 |   | -10.6% |
| Total                                | 8,234,119                            |   | 9,316,781                                                                                                                                                    |   | -11.6%                       |   | 35,536,092 |   | 31,759,792 |   | 11.9% |
|                                 |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Weighted      Average Sales Price    | $4.10                                |   | $4.21                                                                                                                                                        |   | -2.6%                        |   | $3.12      |   | $6.98 |   | -55.3% |
|                                 |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Oil      (Bbls)                      |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Rocky      Mountain Region           | 288,851                              |   | 323,027                                                                                                                                                      |   | -10.6%                       |   | 1,277,887  |   | 1,149,071 |   | 11.2% |
| Appalachian      Basin               | 2,348                                |   | 1,518                                                                                                                                                        |   | 54.7%                        |   | 9,589      |   | 6,623 |   | 44.8% |
| Other                                | 991                                  |   | 1,680                                                                                                                                                        |   | -41.0%                       |   | 4,012      |   | 4,714 |   | -14.9% |
| Total                                | 292,190                              |   | 326,225                                                                                                                                                      |   | -10.4%                       |   | 1,291,488  |   | 1,160,408 |   | 11.3% |
|                                 |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Weighted      Average Sales Price    | $68.95                               |   | $52.14                                                                                                                                                       |   | 32.2%                        |   | $55.03     |   | $89.77 |   | -38.7% |
|                                 |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Natural      Gas Equivalents (Mcfe)* |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Rocky      Mountain Region           | 8,525,052                            |   | 9,746,922                                                                                                                                                    |   | -12.5%                       |   | 37,654,787 |   | 33,030,913 |   | 14.0% |
| Appalachian      Basin               | 1,053,226                            |   | 1,015,792                                                                                                                                                    |   | 3.7%                         |   | 4,068,045  |   | 3,941,921 |   | 3.2% |
| Other                                | 408,981                              |   | 511,417                                                                                                                                                      |   | -20.0%                       |   | 1,562,188  |   | 1,749,406 |   | -10.7% |
| Total                                | 9,987,259                            |   | 11,274,131                                                                                                                                                   |   | -11.4%                       |   | 43,285,020 |   | 38,722,240 |   | 11.8% |
|                                 |                                 |   |                                                                                                                                                         |   |                         |   |       |   |   |   |   |
| Weighted      Average Sales Price    | $5.40                                | $4.99  |                            | 8.2%   |                         |   | $4.20      | $8.42 |   | 50.1% |   |

|                                                                 |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |
|----------------------------------------------------------------------|--------------------------------------------------------|-----------------------------------------------------------------------------|--------------------------------------------------|---------------------------------------------------------------------------------------|--------------------------------------------------|-------------------------------------------------------------|--------------------------------------------------|-------------------------------------------------------------|
| Adjusted      Cash Flow from Operations                              |
|                                                                 |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |
|                                                                 |                                                   | Three      Months Ended                                                     | Twelve      Months Ended                         |
|                                                                 |                                                   | December      31,                                                           |                                             | December      31,                                                                     |
|                                                                 |                                                   | 2009                                                                        |                                             | 2008                                                                                  |                                             | 2009                                                        |                                             | 2008                                                        |
| Net      cash provided by operating activities                       |                                                   |  $     43,924                                 |                                             |  $     35,309                                           |                                             |  $   143,895                            |                                             |  $   139,101                            |
| Changes      in current assets and liabilities related to operations | 11,585                                                 |                                                                        | 5,907                                            |                                                                                  | 26,320                                           |                                                        | 60,818                                           |
| Adjusted      cash flow from operations                              |                                                   |  $     55,509                                 |                                             |  $     41,216                                           |                                             |  $   170,215                            |                                             |  $   199,919                            |
|                                                                 |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |
|                                                                 |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |
|                                                                 |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |
| Adjusted      Net Income (Loss) Attributable to Shareholers          |
|                                                                 |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |
|                                                                 |                                                   | Three      Months Ended                                                     | Twelve      Months Ended                         |
|                                                                 |                                                   | December      31,                                                           |                                             | December      31,                                                                     |
|                                                                 |                                                   | 2009                                                                        |                                             | 2008                                                                                  |                                             | 2009                                                        |                                             | 2008                                                        |
| Net      income (loss) attributable to shareholders                  |  $   (16,019)                      |                                                                        |  $     41,053      |                                                                                  |  $   (79,277)                |                                                        |  $   113,309                 |
| Unrealized      (gain) loss on derivatives, net                      |                                                   |        20,888                            |                                             |       (72,165)                                          |                                             |       116,623                 |                                             |     (117,536)                           |
| Provision      for underpayment of gas sales                         |                                                   |             125 |                                             |               - |                                             |          2,706 |                                             |          4,025 |
| Tax      effect of above adjustments                                 |                                                   |         (5,679)                     |                                             |        26,795                                      |                                             |       (42,981)                |                                             |        39,887            |
| Adjusted      net income (loss) attributable to shareholders         |  $       (685) |                                                                        |  $     (4,317)     |                                                                                  |  $     (2,929)     |                                                        |  $     39,685      |
| Weighted      average diluted shares outstanding                     |        19,172       |                                                                        |        14,791 |                                                                                  |        16,448 |                                                        |        14,848 |
| Adjusted      diluted earnings (loss) per share                      |                                                   |  $      (0.04)                           |                                             |  $      (0.29)                                     |                                             |  $      (0.18)           |                                             |  $        2.67 |
|                                                                      |                                                   |                                                                        |                                             |                                                                                  |                                             |                                                        |                                             |                                                        |

| PETROLEUM      DEVELOPMENT CORPORATION                                                 |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
|----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|---------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------|
| Consolidated      Statements of Income                                                 |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| (in      thousands except per share data)                                              |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
|                                                                                   |        (unaudited)                                                                                 |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
|                                                                                   | Three      Months Ended December 31,                                                                                                  | Twelve      Months Ended December 31, |
|                                                                                   | 2009                                                                                                                                  |                                  | 2008                                                                                                                      |   | 2009(1)                                                                     |   | 2008(1)                                                                                                                         |
| Revenues:                                                                              |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Natural      gas and oil sales                                                         |  $          53,787                                                             |                                  |  $       56,260                                                                   |   |  $  179,093                                                  |   |  $       321,877                                                                        |
| Sales      from natural gas marketing                                                  |              17,435                                                  |                                  |           32,625                                                        |   |        64,635                            |   |           140,263                                                             |
| Commodity      price risk management gain (loss), net                                  |                3,361                                       |                                  |         102,544                                                                   |   |       (10,053)                                |   |           127,838                                                             |
| Well      operations, pipeline income and other                                        |                2,694                                       |                                  |             3,564                                             |   |        11,043                            |   |             11,767                                                  |
| Total      revenues                                                                    |              77,277                                                  |                                  |         194,993                                                                   |   |      244,718                                       |   |           601,745                                                             |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Costs      and expenses:                                                               |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Natural      gas and oil production and well operations      costs                |              19,123                                                  |                                  |           17,239                                                        |   |        64,746                            |   |             79,354                                                  |
| Cost      of natural gas marketing                                                     |              17,108                                                  |                                  |           32,624                                                        |   |        62,534                            |   |           139,234                                                             |
| Exploration      expense and impairment of natural gas and      oil properties    |                7,525                                       |                                  |           27,143                                                        |   |        22,887                            |   |             45,105                                                  |
| General      and administrative expense                                                |              17,480                                                  |                                  |           10,555                                                        |   |        53,985                            |   |             37,715                                                  |
| Depreciation,      depletion and amortization                                          |              30,208                                                  |                                  |           32,711                                                        |   |      131,004                                       |   |           104,640                                                             |
| Total      costs and expenses                                                          |              91,444                                                  |                                  |         120,272                                                                   |   |      335,156                                       |   |           406,048                                                             |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Gain      on sale of leaseholds                                                        |                   350                       |                                  |                     - |   |             470 |   |                      - |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Income      (loss) from operations                                                     |            (13,817)                                                            |                                  |           74,721                                                        |   |       (89,968)                                |   |           195,697                                                             |
| Interest      income                                                                   |                     14            |                                  |                  94                  |   |             254 |   |                  591                       |
| Interest      expense                                                                  |            (10,184)                                                            |                                  |            (8,989)                                                 |   |       (37,208)                                |   |           (28,132)                                                            |
| Income      (loss) from continuing operations before income      taxes            |            (23,987)                                                            |                                  |           65,826                                                        |   |     (126,922)                                           |   |           168,156                                                             |
| Provision      (benefit) for income taxes                                              |              (6,483)                                                 |                                  |           24,442                                                        |   |       (45,716)                                |   |             59,089                                                  |
| Income      (loss) from continuing operations                                          |  $        (17,504)                                                                       |                                  |  $       41,384                                                                   |   |  $   (81,206)                                           |   |  $       109,067                                                                        |
| Income      (loss) from discontinued operations, net of      tax                  |                       - |                                  |               (348)                                 |   |             113 |   |               4,177                                       |
| Net      income (loss)                                                                 |  $        (17,504)                                                                       |                                  |  $       41,036                                                                   |   |  $   (81,093)                                           |   |  $       113,244                                                                        |
| Less:      net loss attributable to noncontrolling interests                      |              (1,485)                                                 |                                  |                 (17)                      |   |         (1,816)                     |   |                  (65)                      |
| Net      income (loss) attributable to shareholders                                    |  $        (16,019)                                                                       |                                  |  $       41,053                                                                   |   |  $   (79,277)                                           |   |  $       113,309                                                                        |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Amounts      attributable to Petroleum Development Corporation      shareholders: |                                                                                                                                  |                                  |                                                                                                                      |   |
| Income      (loss) from continuing operations                                          |  $        (16,019)                                                                       |                                  |  $       41,401                                                                   |   |  $   (79,390)                                           |   |           109,132                                                             |
| Income      (loss) from discontinued operations, net      of tax                  |                       - |                                  |               (348)                                 |   |             113 |   |               4,177                                       |
| Net      income (loss) attributable to shareholders                                    |  $        (16,019)                                                                       |                                  |  $       41,053                                                                   |   |  $   (79,277)                                           |   |  $       113,309                                                                        |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Earnings      (loss) per share attributable to shareholders:                           |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Basic                                                                                  |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Income      (loss) from continuing operations                                          |  $            (0.84)                                                 |                                  |  $           2.80                                             |   |  $       (4.83)                     |   |  $             7.41                                       |
| Income      (loss) from discontinued operations                                        |                     -             |                                  |  $          (0.02)                                                 |   |            0.01      |   |                 0.28                            |
| Net      income (loss) attributable to shareholders                                    |  $            (0.84)                                                 |                                  |  $           2.78                                             |   |  $       (4.82)                     |   |  $             7.69                                       |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Diluted                                                                                |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Income      (loss) from continuing operations                                          |  $            (0.84)                                                 |                                  |  $           2.80                                             |   |  $       (4.83)                     |   |  $             7.35                                       |
| Income      (loss) from discontinued operations                                        |                     -             |                                  |  $          (0.02)                                                 |   |            0.01      |   |                 0.28                            |
| Net      income (loss) attributable to shareholders                                    |  $            (0.84)                                                 |                                  |  $           2.78                                             |   |  $       (4.82)                     |   |  $             7.63                                       |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Weighted      average common shares outstanding                                        |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |
| Basic                                                                                  |              19,172                                                  |                                  |           14,778                                                        |   |        16,488                            |   |             14,736                                                  |
| Diluted                                                                                |              19,172                                                  |                                  |           14,791                                                        |   |        16,488                            |   |             14,848                                                  |
|                                                                                   |                                                                                                                                  |                                  |                                                                                                                      |   |                                                                        |   |                                                                                                                            |

| ·   | changes      in production volumes, worldwide and national demand, and commodity prices      for oil and natural gas; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·   | the      timing and extent of our success in discovering, acquiring, developing and      producing natural gas and oilreserves; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | our      ability to acquire leases, drilling rigs, supplies and services at      reasonable prices; |
|--------------------|-----------------------------------------------------------------------------------------------------|

| ·   | the      availability and cost of capital tous; |
|--------------------|-------------------------------------------------|

| ·   | risks      incident to the drilling and operation of natural gas and oil      wells; |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | future      production and development costs; |
|--------------------|-----------------------------------------------|

| ·   | the      availability of sufficient pipeline and other transportation facilities to      carry our production and the impact of these facilities on      price; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      effect of existing and future laws, governmental regulations and the      political and economic climate of the United States of      America; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the      effect of natural gas and oil derivatives  activities; |
|--------------------|-----------------------------------------------------------------|

| ·   | conditions      in the capital markets; and |
|--------------------|---------------------------------------------|

| ·   | losses      possible from pending or futurelitigation. |
|--------------------|--------------------------------------------------------|

----