PDC ENERGY, INC.10-Q000007787712/3103/31/20232023Q1falseNOTE 9 - LEASESWe have operating leases for office space, drilling rig and well equipment, and finance leases for vehicles. Our leases have remaining lease terms ranging from one to ten years. We had short-term lease costs of $168 million and $75 million for the three months ended March 31, 2023 and March 31, 2022, respectively. Our short-term lease costs include amounts that are capitalized as part of the cost of assets and are recorded as properties and equipment, or recognized as expense.The following table presents the components of our lease costs for the periods presented:LeasesCondensed Consolidated Balance Sheet Line ItemMarch 31, 2023December 31, 2022(in thousands)Operating lease right-of-use assetsOther assets$19,577$19,577Finance lease right-of-use assetsProperties and equipment, net6,1846,184Total right-of-use assets$25,761$25,761Operating lease obligation - short-termOther accrued expenses3,8243,825Operating lease obligation - long-termOther liabilities37,72037,720Finance lease obligation - short-termOther accrued expenses2,1622,162Finance lease obligation - long-termOther liabilities4,0954,095Total lease liabilities$47,801$47,802Weighted average remaining lease term (years)7.97.9Weighted average discount rate5.1%5.1%NOTE 9 - LEASESWe have operating leases for office space, drilling rig and well equipment, and finance leases for vehicles. Our leases have remaining lease terms ranging from one to ten years. We had short-term lease costs of $168 million and $75 million for the three months ended March 31, 2023 and March 31, 2022, respectively. Our short-term lease costs include amounts that are capitalized as part of the cost of assets and are recorded as properties and equipment, or recognized as expense.The following table presents the components of our lease costs for the periods presented:LeasesCondensed Consolidated Balance Sheet Line ItemMarch 31, 2023December 31, 2022(in thousands)Operating lease right-of-use assetsOther assets$19,577$19,577Finance lease right-of-use assetsProperties and equipment, net6,1846,184Total right-of-use assets$25,761$25,761Operating lease obligation - short-termOther accrued expenses3,8243,825Operating lease obligation - long-termOther liabilities37,72037,720Finance lease obligation - short-termOther accrued expenses2,1622,162Finance lease obligation - long-termOther liabilities4,0954,095Total lease liabilities$47,801$47,802Weighted average remaining lease term (years)7.97.9Weighted average discount rate5.1%5.1%16875The following table presents the components of our lease costs for the periods presented:LeasesCondensed Consolidated Balance Sheet Line ItemMarch 31, 2023December 31, 2022(in thousands)Operating lease right-of-use assetsOther assets$19,577$19,577Finance lease right-of-use assetsProperties and equipment, net6,1846,184Total right-of-use assets$25,761$25,761Operating lease obligation - short-termOther accrued expenses3,8243,825Operating lease obligation - long-termOther liabilities37,72037,720Finance lease obligation - short-termOther accrued expenses2,1622,162Finance lease obligation - long-termOther liabilities4,0954,095Total lease liabilities$47,801$47,802Weighted average remaining lease term (years)7.97.9Weighted average discount 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10-Q





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March 31, 2023





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001-37419





PDC ENERGY, INC.





Delaware95-2636730(State of incorporation)(I.R.S. Employer Identification No.)


1099 18th Street, Suite 1500


Denver Colorado 80202








303 860-5800








Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon stock, par value $0.01 per sharePDCENasdaq Global Select Market





Yes
    ☐





Yes
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Large Accelerated Filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐











☐





87,455,855







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PART I – FINANCIAL INFORMATIONPageItem 1.Financial Statements (Unaudited)Condensed Consolidated Balance Sheets1Condensed Consolidated Statements of Operations2Condensed Consolidated Statements of Cash Flows3Condensed Consolidated Statements of Stockholders’ Equity4Notes to Condensed Consolidated Financial Statements5Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations20Item 3.Quantitative and Qualitative Disclosures About Market Risk37Item 4.Controls and Procedures39PART II – OTHER INFORMATIONItem 1.Legal Proceedings40Item 1A.Risk Factors40Item 2.Unregistered Sales of Equity Securities and Use of Proceeds41Item 3.Defaults Upon Senior Securities41Item 4.Mine Safety Disclosures41Item 5.Other Information41Item 6.Exhibits42Signatures43













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March 31, 2023December 31, 2022AssetsCurrent assets:Cash and cash equivalents$17,443$6,494Accounts receivable, net474,783546,311Fair value of derivatives68,14431,963Prepaid expenses and other current assets10,8228,987Total current assets571,192593,755Properties and equipment, net7,510,3127,293,355Fair value of derivatives46,49725,562Other assets131,46470,093Total Assets$8,259,465$7,982,765Liabilities and Stockholders’ EquityLiabilitiesCurrent liabilities:Accounts payable$285,995$244,406Production tax liability253,962244,737Fair value of derivatives125,529274,218Funds held for distribution523,889539,094Accrued interest payable20,87711,655Other accrued expenses112,294106,082Total current liabilities1,322,5461,420,192Long-term debt1,296,4911,314,010Asset retirement obligations170,060171,665Fair value of derivatives29,01953,600Deferred income taxes621,358507,683Other liabilities605,615532,870Total liabilities4,045,0894,000,020Commitments and contingent liabilitiesStockholders’ equityCommon shares - par value $0.01 per share, 150,000,000 authorized, 87,570,195 and 89,224,353 issued as of March 31, 2023 and December 31, 2022, respectively876892Additional paid-in capital2,742,7062,823,364Retained earnings1,476,2051,165,816Treasury shares - at cost, 88,328 and 119,336 as of March 31, 2023 and December 31, 2022, respectively(5,411)(7,327)Total stockholders’ equity4,214,3763,982,745Total Liabilities and Stockholders’ Equity$8,259,465$7,982,765













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Three Months Ended March 31,20232022RevenuesCrude oil, natural gas and NGLs sales$813,284$882,378Commodity price risk management gain (loss), net144,132(568,055)Other income2522,125Total revenues957,668316,448Costs, expenses and otherLease operating expense73,25954,156Production taxes55,74762,916Transportation, gathering and processing expense32,50527,971Exploration, geologic and geophysical expense534253General and administrative expense41,48734,107Depreciation, depletion and amortization207,187151,055Accretion of asset retirement obligations3,7142,987Impairment of properties and equipment1,373943Loss (gain) on sale of properties and equipment155(125)Total costs, expenses and other415,961334,263Income (loss) from operations541,707(17,815)Interest expense, net(14,705)(12,945)Income (loss) before income taxes527,002(30,760)Income tax expense(112,870)(1,200)Net income (loss)$414,132$(31,960)Earnings (loss) per share:Basic$4.69$(0.33)Diluted$4.64$(0.33)Weighted average common shares outstanding:Basic88,35796,279Diluted89,22896,279
















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Three Months Ended March 31,20232022Cash flows from operating activities:Net income (loss)$414,132$(31,960)Adjustments to net income (loss) to reconcile to net cash from operating activities:Net change in fair value of unsettled commodity derivatives(230,386)406,461Depreciation, depletion and amortization207,187151,055Impairment of properties and equipment1,373943Accretion of asset retirement obligations3,7142,987Non-cash stock-based compensation6,5645,474Amortization of debt discount, premium and issuance costs1,3611,357Deferred income taxes113,6753,600Other258(1,030)Changes in assets and liabilities70,445(49,839)Net cash from operating activities588,323489,048Cash flows from investing activities:Capital expenditures for development of crude oil and natural gas properties(362,251)(187,021)Capital expenditures for midstream assets(3,574)—Capital expenditures for other properties and equipment(6,651)(67)Proceeds from sale of properties and equipment3789Proceeds from divestitures—465Funds held in escrow for acquisition—(50,000)Net cash from investing activities(372,439)(236,534)Cash flows from financing activities:Proceeds from revolving credit facility and other borrowings496,000100,500Repayment of revolving credit facility and other borrowings(514,000)(100,500)Payment of debt issuance costs—(30)Purchase of treasury shares for employee stock-based compensation tax withholding obligations(19,243)(9,203)Purchase of treasury shares under stock repurchase program(129,944)(80,853)Dividends paid(37,179)(24,681)Principal payments under financing lease obligations(569)(419)Net cash from financing activities(204,935)(115,186)Net change in cash and cash equivalents10,949137,328Cash and cash equivalents, beginning of period6,49433,829Cash and cash equivalents, end of period$17,443$171,157













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Three Months Ended March 31, 2023Common StockAdditional Paid-in CapitalTreasury StockRetained Earnings (Accumulated Deficit)Total Stockholders’ EquitySharesAmountSharesAmountBalance, January 1, 202389,224$892$2,823,364(119)$(7,327)$1,165,816$3,982,745Net income (loss)—————414,132414,132Stock-based compensation73486,497—59—6,564Purchase of treasury shares for employee stock-based compensation tax withholding obligations———(300)(19,243)—(19,243)Retirement of treasury shares for employee stock-based compensation tax withholding obligations(300)(3)(10,942)30019,243(8,298)—Retirement of treasury shares(2,088)(21)(76,213)2,089136,047(59,813)—Issuance of treasury shares———1———Purchase of treasury shares under stock repurchase program———(2,059)(134,190)—(134,190)Dividends declared ($0.40 per share)—————(35,632)(35,632)Balance, March 31, 202387,570$876$2,742,706(88)$(5,411)$1,476,205$4,214,376





Three Months Ended March 31, 2022Common StockAdditional Paid-in CapitalTreasury StockAccumulated DeficitTotal Stockholders’ EquitySharesAmountSharesAmountBalance, January 1, 202296,468$965$3,161,941(55)$(2,705)$(249,954)$2,910,247Net income (loss)—————(31,960)(31,960)Stock-based compensation65571,798—3,669—5,474Purchase of treasury shares for employee stock-based compensation tax withholding obligations———(164)(9,203)—(9,203)Retirement of treasury shares for employee stock-based compensation tax withholding obligations(53)(2)(3,022)533,024——Retirement of treasury shares(1,320)(13)(83,508)1,32083,521——Issuance of treasury shares———67———Purchase of treasury shares under stock repurchase program———(1,326)(85,339)—(85,339)Dividends declared ($0.25 per share)——(24,468)———(24,468)Balance, March 31, 202295,750$957$3,052,741(105)$(7,033)$(281,914)$2,764,751










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4,100


The accompanying unaudited condensed consolidated financial statements include the accounts of PDC and our wholly-owned subsidiaries. Pursuant to the proportionate consolidation method, our accompanying financial statements include our pro rata share of assets, liabilities, revenues and expenses of the entities which we proportionately consolidate. All material intercompany accounts and transactions have been eliminated in consolidation In our opinion, the accompanying condensed consolidated financial statements contain all adjustments, consisting of normal recurring adjustments necessary for a fair statement of the results of interim periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, certain notes and other financial information included in audited financial statements have been condensed or omitted. The December 31, 2022 condensed consolidated balance sheet data was derived from audited statements, but does not include all disclosures required by U.S. GAAP. The information presented in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements and notes thereto included in our 2022 Form 10-K. Our results of operations and cash flows for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year or any other future period







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The following table details our final purchase price, valuation and allocation of the purchase price to the assets acquired and liabilities assumed as a result of the Great Western Acquisition:


(in thousands, except share and per share data)Consideration:Cash$542,500Retirement of Great Western’s credit facility235,822Extinguishment of Great Western’s secured senior notes361,231Total cash consideration$1,139,553Common stock issued4,007,018Fair value of PDC common stock on May 6, 2022$73.20Total fair value of common stock issued293,314Total consideration$1,432,867Assets acquired:Cash$63,183Accounts receivable164,026Other current assets3,129Properties and equipment, net - proved2,091,301Properties and equipment, net - other7,035Other noncurrent assets20,345Total assets acquired$2,349,019Liabilities assumed:Accounts payable$(119,142)Production tax liability(110,940)Funds held for distribution(170,708)Other current liabilities(19,203)Fair value of derivatives(319,600)Asset retirement obligations(25,300)Deferred tax liabilities(28,400)Other liabilities(32,802)Total liabilities assumed$(826,095)Total identifiable net assets acquired$1,522,924Gain on bargain purchase90,057Purchase price consideration$1,432,867





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Three months ended March 31, 2022(in thousands, except per share data)Total revenue$352,347Net income (loss)(101,097)Earnings (loss) per share:Basic$(1.01)Diluted(1.01)
















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Three Months Ended March 31,Revenue by Commodity and Operating Region20232022Percent Change(in thousands)Crude oilWattenberg Field$445,846$451,911(1)%Delaware Basin68,45397,838(30)%Total514,299549,749(6)%Natural gasWattenberg Field153,355143,6997%Delaware Basin7,68719,425(60)%Total161,042163,124(1)%NGLsWattenberg Field119,159138,875(14)%Delaware Basin18,78430,630(39)%Total137,943169,505(19)%Crude oil, natural gas and NGLsWattenberg Field718,360734,485(2)%Delaware Basin94,924147,893(36)%Total$813,284$882,378(8)%
















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March 31, 2023December 31, 2022Condensed Consolidated Balance Sheet Line ItemSignificant OtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)TotalSignificant OtherObservableInputs(Level 2)SignificantUnobservableInputs(Level 3)Total(in thousands)Derivative assetsCurrentFair value of derivatives$38,181$29,963$68,144$9,178$22,785$31,963Non-currentFair value of derivatives36,7509,74746,49720,4395,12325,562Total$74,931$39,710$114,641$29,617$27,908$57,525Derivative liabilitiesCurrentFair value of derivatives$(97,328)$(28,201)$(125,529)$(214,171)$(60,047)$(274,218)Non-currentFair value of derivatives(22,424)(6,595)(29,019)(49,749)(3,851)(53,600)Total$(119,752)$(34,796)$(154,548)$(263,920)$(63,898)$(327,818)





Three Months Ended March 31,20232022(in thousands)Fair value of Level 3 instruments, net asset (liability) beginning of period$(35,990)$(62,540)Changes in fair value included on condensed consolidated statements of operations line item:Commodity price risk management gain (loss), net40,796(209,771)Settlements included on condensed consolidated statement of operations line items:Commodity price risk management gain (loss), net10846,100Fair value of Level 3 instruments, net asset (liability) end of period$4,914$(226,211)Net change in fair value of Level 3 unsettled derivatives included on condensed consolidated statements of operations line item:Commodity price risk management gain (loss), net$33,490$(159,118)

















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March 31, 2023December 31, 2022Nominal InterestEstimated Fair ValuePercent of ParEstimated Fair ValuePercent of Par(in millions)(in millions)2024 Senior Notes6.125%$199.699.8%$198.499.2%2026 Senior Notes5.75%732.897.7%716.095.5%













The following table presents the impact of our derivative instruments on our condensed consolidated statements of operations for the periods presented:


Three Months Ended March 31,Condensed Consolidated Statement of Operations Line Item20232022(in thousands)Commodity price risk management gain (loss), netNet settlements$(86,254)$(161,594)Net change in fair value of unsettled derivatives230,386(406,461)Total commodity price risk management gain (loss), net$144,132$(568,055)





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As of March 31, 2023, we had the following outstanding derivative contracts. When aggregating multiple contracts, the weighted average contract price is presented:


CollarsFixed-Price SwapsCommodity/ Index/ Maturity PeriodQuantity(Crude oil -MBblsNatural Gas - BBtu)Weighted Average Contract PriceQuantity(Crude Oil - MBblsGas and Basis-BBtu)Weighted Average Contract PriceFair ValueMarch 31, 2023(in thousands)FloorsCeilingsCrude OilNYMEX20234,509$60.52$81.927,311$67.40$(66,451)20241,54563.1687.446,12670.593,7732025———2,64075.1019,024Total Crude Oil6,05416,077(43,654)Natural GasNYMEX202318,7653.445.8029,6663.0425,165202414,9403.004.6826,1603.54(2,608)20254,9803.505.0014,9404.421,82338,68570,76624,380CIG2023———6,5703.394,9682025———4,8003.10(4,584)—11,370384Total Natural Gas38,68582,13624,764Basis Protection - Natural GasCIG202347,219(0.26)(6,227)202441,100(0.31)(11,306)202519,920(0.25)(3,484)Total Basis Protection - Natural Gas108,239(21,017)Commodity Derivatives Fair Value$(39,907)











Total Gross Amount Presented on the Balance SheetEffect of Master Netting AgreementsTotal Net Amount(in thousands)As of March 31, 2023Derivative asset instruments, at fair value$114,641$(89,682)$24,959Derivative liability instruments, at fair value$154,548$(89,682)$64,866





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Derivative Counterparties.Our commodity derivative instruments expose us to the risk of non-performance by our counterparties. We use financial institutions who are also lenders under our revolving credit facility as counterparties to our commodity derivative contracts. To date, we have had no derivative counterparty default losses. We have evaluated the credit risk of our derivative assets from our counterparties using relevant credit market default rates, giving consideration to amounts outstanding for each counterparty and the duration of each outstanding derivative position. Based on our evaluation, we have determined that the potential impact of nonperformance of our current counterparties on the fair value of our derivative instruments is not significant at March 31, 2023; however, this determination may change.













March 31, 2023December 31, 2022(in thousands)Properties and equipment, net:Crude oil and natural gas propertiesProved$11,696,780$11,324,756Unproved156,004156,418Total crude oil and natural gas properties11,852,78411,481,174Equipment and other83,05472,151Land and buildings25,40625,406Construction in progress750,460716,302Properties and equipment, at cost12,711,70412,295,033Accumulated DD&A(5,201,392)(5,001,678)Properties and equipment, net$7,510,312$7,293,355


The following table presents the changes in capitalized exploratory well cost pending determination of proved reserves and included in properties and equipment for the periods presented:


Three Months Ended March 31, 2023Year Ended December 31, 2022(in thousands, except for number of wells)Beginning balance$—$—Additions to capitalized exploratory well costs pending the determination of proved reserves2,538—Reclassifications to proved properties——Ending balance$2,538$—Number of wells pending determination at period-end3—


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March 31, 2023December 31, 2022(in thousands)Crude oil, natural gas and NGLs sales$398,324$491,327Joint interest billings56,08846,633Other25,71513,796Allowance for doubtful accounts(5,344)(5,445)Accounts receivable, net$474,783$546,311


The following table presents the components of other accrued expenses as of the dates indicated:


March 31, 2023December 31, 2022(in thousands)Employee benefits$18,396$29,288Asset retirement obligations25,86425,986Environmental expenses23,52925,666Operating and finance leases28,1275,987Other16,37819,155Other accrued expenses$112,294$106,082


The following table presents the components of other liabilities as of the dates indicated:


March 31, 2023December 31, 2022(in thousands)Deferred midstream gathering credits$141,976$145,937Production taxes371,863315,758Operating and finance leases63,49641,815Other28,28029,360Other liabilities$605,615$532,870







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March 31, 2023December 31, 2022(in thousands)Revolving credit facility due November 2026$352,000$370,0006.125% Senior Notes due September 2024199,286199,1635.75% Senior Notes due May 2026745,205744,847Total debt, net of unamortized discount, premium and debt issuance costs$1,296,491$1,314,010





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3.5 1.5 1.1 20


0.75 1.75 0.375





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2024 Senior Notes2026 Senior NotesOutstanding principal amounts (in thousands)$200,000$750,000Interest rate6.125%5.75%Maturity dateSeptember 15, 2024May 15, 2026Interest payment datesMarch 15, September 15May 15, November 15Redemption periods(1)September 15, 2022May 15, 2024











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(in thousands)Beginning balance$197,651Obligations incurred with development activities and other2,888Obligations incurred with acquisition—Accretion expense3,714Revisions in estimated cash flows—Obligations discharged with asset retirements and divestitures(8,329)Asset retirement obligations at end of period195,924Current portion(1)(25,864)Long-term portion$170,060


(1) The current portion of the asset retirement obligation is included in other accrued expenses on our condensed consolidated balance sheets.


Our estimated asset retirement obligations liability is based on historical experience in plugging and abandoning wells, estimated economic lives and estimated plugging, abandonment and surface reclamation costs considering federal and state regulatory requirements in effect at the time that the obligation is incurred. The liability is discounted using the credit-adjusted risk-free rate estimated at the time the liability is incurred or revised. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligations liability, a corresponding adjustment is made to the properties and equipment balance. Changes in the liability due to the passage of time are recognized as an increase in the carrying amount of the liability and as accretion expense.










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7,050,000 3,515,571





241,841





Three Months Ended March 31,20232022(in thousands)General and administrative expense$6,218$5,182Lease operating expense346292Total stock-based compensation expense$6,564$5,474








SharesWeighted Average Grant-Date Fair Value per ShareNon-vested at beginning of period896,511$42.05Granted87,35466.49Vested(156,353)32.01Forfeited(720)60.38Non-vested at end of period826,79246.51


66.49 57.57 5 6 26 1.6





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96,605 zero 250








Three Months Ended March 31,20232022Expected term of award (in years)2.92.9Risk-free interest rate4.4%1.7%Expected volatility66.7%86.3%Weighted average grant-date fair value per share$110.18$107.85





SharesWeighted Average Grant-Date Fair Value per ShareNon-vested at beginning of period309,753$71.76Granted96,605110.18Non-vested at end of period406,35880.89


20 1.5





50,000,000 0.01 no





2 2.1 1.3 134 85 1.1





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Dividends


For the three months ended March 31, 2023 and 2022, our dividends totaled $36 million or $0.40 per share of outstanding common stock and $24 million or $0.25 per share of outstanding stock, respectively. All RSUs and PSUs receive a dividend equivalent per unit, recognized as a liability included in other liabilities on our condensed consolidated balance sheets, until the recipients receive the equivalents upon vesting. Dividends declared were recorded as a reduction of retained earnings; however, if there were no retained earnings as of the date of declaration, dividends declared were recorded as a reduction of additional paid-in capital. Future dividend payments must be approved by our board of directors and will depend on our liquidity, financial requirements, and other factors considered relevant by our board.







21.4
  3.9


I










Basic earnings per share is computed by dividing net earnings by the weighted average number of common shares outstanding for the period. Diluted earnings per share is similarly computed, except that the denominator includes the effect, using the treasury stock method, of unvested stock-based employee awards and shares held pursuant to our non-employee director deferred compensation plan, if including such potential shares of common stock is dilutive.





Three Months Ended March 31,20232022(in thousands)Weighted average common shares outstanding - basic88,35796,279Dilutive effect of:RSUs and PSUs852—Other equity-based awards19—Weighted average common shares and equivalents outstanding - diluted89,22896,279





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Three Months Ended March 31,20232022(in thousands)Weighted average common share equivalents excluded from diluted earnings per share due to their anti-dilutive effect:RSUs and PSUs822,281Other equity-based awards32143Total anti-dilutive common share equivalents1142,424







Three Months Ended March 31,20232022(in thousands)Supplemental cash flow information:Cash payments (receipts) for:Interest, net of capitalized interest$4,261$3,825Income taxes—(233)Non-cash investing and financing activities:Change in accounts payable related to capital expenditures$52,304$33,135Change in asset retirement obligations, with a corresponding change to crude oil and natural gas properties, net of disposals2,156767










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Operated WellsWattenberg FieldDelaware BasinTotalGrossNetGrossNetGrossNetIn-process as of December 31, 20222001851212212197Wells spud6460997369Wells turned-in-line(55)(49)(6)(6)(61)(55)In-process as of March 31, 20232091961515224211






















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Three Months EndedMarch 31, 2023December 31, 2022Percent Change(dollars in millions, except per unit data)Production:Crude oil (MBbls)6,9387,380(6)%Natural gas (MMcf)52,48753,479(2)%NGLs (MBbls)6,2866,430(2)%Crude oil equivalent (MBoe)21,97122,723(3)%Average Boe per day (Boe)244,122246,989(1)%Crude Oil, Natural Gas and NGLs Sales:Crude oil$514$607(15)%Natural gas161224(28)%NGLs138145(5)%Total crude oil, natural gas and NGLs sales$813$976(17)%Net Settlements on Commodity DerivativesCrude oil$(35)$(105)(66)%Natural gas(51)(62)(18)%Total net settlements on derivatives$(86)$(167)(48)%Average Sales Price (excluding net settlements on derivatives):Crude oil (per Bbl)$74.13$82.24(10)%Natural gas (per Mcf)3.074.20(27)%NGLs (per Bbl)21.9522.49(2)%Crude oil equivalent (per Boe)37.0242.95(14)%Average Costs and Expense (per Boe):Lease operating expense$3.33$3.0410%Production taxes2.542.71(6)%Transportation, gathering and processing expense1.481.53(3)%General and administrative expense1.891.6018%Depreciation, depletion and amortization9.438.896%Lease Operating Expense by Operating Region (per Boe)Wattenberg Field$2.83$2.5212%Delaware Basin7.147.032%





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December 31, 2022 -March 31, 2023(in millions)Change in:Production$(44)Average crude oil price(56)Average natural gas price(59)Average NGLs price(4)Total change in crude oil, natural gas and NGLs sales revenue$(163)








Three Months EndedProduction by Operating RegionMarch 31, 2023December 31, 2022Percent ChangeCrude oil (MBbls)Wattenberg Field6,0056,406(6)%Delaware Basin933974(4)%Total6,9387,380(6)%Natural gas (MMcf)Wattenberg Field46,72047,502(2)%Delaware Basin5,7675,977(4)%Total52,48753,479(2)%NGLs (MBbls)Wattenberg Field5,6285,799(3)%Delaware Basin6586314%Total6,2866,430(2)%Crude oil equivalent (MBoe)Wattenberg Field19,42020,122(3)%Delaware Basin2,5512,601(2)%Total21,97122,723(3)%Average crude oil equivalent per day (Boe)Wattenberg Field215,778218,717(1)%Delaware Basin28,34428,272—%Total244,122246,989(1)%








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Three Months EndedProduction Ratio by Operating RegionMarch 31, 2023December 31, 2022Wattenberg FieldCrude oil31%32%Natural gas40%39%NGLs29%29%Total100%100%Delaware BasinCrude oil36%37%Natural gas38%39%NGLs26%24%Total100%100%

















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Three Months EndedWeighted Average Realized Sales Price by Operating RegionMarch 31, 2023December 31, 2022Percent Change(excluding net settlements on derivatives)Crude oil (per Bbl)Wattenberg Field$74.25$82.10(10)%Delaware Basin73.3583.15(12)%Weighted average price74.1382.24(10)%Natural gas (per Mcf)Wattenberg Field$3.28$4.46(26)%Delaware Basin1.332.07(36)%Weighted average price3.074.20(27)%NGLs (per Bbl)Wattenberg Field$21.17$21.24—%Delaware Basin28.5834.04(16)%Weighted average price21.9522.49(2)%Crude oil equivalent (per Boe)Wattenberg Field$36.99$42.79(14)%Delaware Basin37.2044.17(16)%Weighted average price37.0242.95(14)%














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Three Months Ended March 31, 2023Average NYMEX PriceAverage Realized Price Before TGP ExpenseAverage Realization Percentage Before TGP ExpenseAverage TGP Expense(1)Average Realized Price After TGP ExpenseAverage Realization Percentage After TGP ExpenseCrude oil (per Bbl)$76.13$74.1397%$2.66$71.4794%Natural gas (per MMBtu)3.423.0790%0.182.8985%NGLs (per Bbl)76.1321.9529%—21.9529%Crude oil equivalent (per Boe)54.0037.0269%1.2835.7466%Three Months Ended December 31, 2022Average NYMEX PriceAverage Realized Price Before TGP ExpenseAverage Realization Percentage Before TGP ExpenseAverage TGP Expense(1)Average Realized Price After TGP ExpenseAverage Realization Percentage After TGP ExpenseCrude oil (per Bbl)$82.64$82.24100%$2.55$79.6996%Natural gas (per MMBtu)6.263.9463%0.213.7360%NGLs (per Bbl)82.6422.4927%—22.4927%Crude oil equivalent (per Boe)64.9542.3465%1.3241.0263%























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Three Months EndedMarch 31, 2023December 31, 2022(in millions)Commodity price risk management gain (loss), net:Net settlements of commodity derivative instruments:Crude oil collars and fixed price exchanges$(35)$(105)Natural gas collars and fixed price exchanges(5)(69)Natural gas basis protection exchanges(46)7Total net settlements of commodity derivative instruments(86)(167)Change in fair value of unsettled commodity derivative instruments:Reclassification of settlements included in prior period changes in fair value of commodity derivative instruments110156Crude oil collars and fixed price exchanges69(153)Natural gas collars and fixed price exchanges8093Natural gas basis protection exchanges(29)(29)Net change in fair value of unsettled commodity derivative instruments23067Total commodity price risk management gain (loss), net$144$(100)


































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December 31, 2022 - March 31, 2023(in millions)Increase (decrease) in production$(7)Increase (decrease) in weighted average depletion rates12Total increase (decrease) in DD&A expense related to crude oil and natural gas properties$5





Three Months EndedMarch 31, 2023December 31, 2022(per Boe)Operating Region/AreaWattenberg Field$9.04$8.56Delaware Basin11.5010.66Total weighted average DD&A expense rate9.328.80




















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Three Months Ended March 31,20232022(in thousands)Cash flows from operating activities$588,323$489,048Cash flows from investing activities(372,439)(236,534)Cash flows from financing activities(204,935)(115,186)Net increase (decrease) in cash and cash equivalents$10,949$137,328











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As of/Three Months EndedAs of/Year EndedMarch 31, 2023December 31, 2022IssuerGuarantorsIssuerGuarantors(in millions)AssetsCurrent assets5185453955Intercompany accounts receivable, guarantor subsidiary—323—334Investment in guarantor subsidiary1,767—1,767—Properties and equipment, net6,4441,0676,2861,007





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As of/Three Months EndedAs of/Year EndedMarch 31, 2023December 31, 2022IssuerGuarantorsIssuerGuarantors(in millions)Other non-current assets12454888LiabilitiesCurrent liabilities1,2171051,36259Intercompany accounts payable323—334—Long-term debt1,297—1,314—Other non-current liabilities1,2441821,102164Statement of OperationsCrude oil, natural gas and NGLs sales718953,639657Commodity price risk management gain (loss), net144—(464)—Total revenues863953,180666Production costs(1)301671,167282Gross profit(2)416282,472376Impairment of properties and equipment1—16Net income (loss)388261,420359

































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Three Months EndedMarch 31, 2023December 31, 2022March 31, 2022(in millions)Cash flows from operations to adjusted cash flows from operations and adjusted free cash flow:Net cash from operating activities$588$688$489Changes in assets and liabilities(70)(84)50Adjusted cash flows from operations518604539Capital expenditures for development of crude oil and natural gas properties(362)(296)(187)Capital expenditures for midstream assets(4)(1)—Change in accounts payable related to capital expenditures for oil and gas development activities and midstream assets(51)(49)(33)Adjusted free cash flow$101$258$319Net income (loss) to adjusted net income (loss):Net income (loss)$414$350$(32)Loss (gain) on commodity derivative instruments(144)100568Net settlements on commodity derivative instruments(86)(167)(161)Tax effect of above adjustments4914(16)Adjusted net income (loss)$233$297$359







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PeriodTotal Number of Shares Purchased(1) (2)Average Price Paid per Share(3)Total Numberof Shares Purchased as Part of Publicly Announced Plans or Programs(1)Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1) (3)(in millions)January987,363$64.63749,680$406February783,77764.19721,6001,109March587,30063.78587,3001,072Total first quarter 2023 purchases2,358,44064.602,058,5801,072





































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Incorporated by ReferenceExhibit NumberExhibit DescriptionFormSEC File NumberExhibitFiling DateFiled Herewith22Securities guaranteed by Guarantors.X31.1Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.X31.2Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.X32.1*Certifications by Chief Executive Officer and Chief Financial Officer pursuant to Title 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.99.1Form of 2023 Performance Share Agreement.X99.2Form of 2023 Restricted Stock Unit Agreement (Executives).X101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documentX101.SCHXBRL Taxonomy Extension Schema DocumentX101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentX101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentX101.LABXBRL Taxonomy Extension Label Linkbase DocumentX101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentX104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)X










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PDC Energy, Inc.(Registrant)Date:   May 3, 2023/s/ Barton R. BrookmanBarton R. BrookmanPresident and Chief Executive Officer(principal executive officer)/s/ R. Scott MeyersR. Scott MeyersExecutive Vice President and Chief Financial Officer(principal financial officer)