Kimmeridge

Setting the Record Straight on PDC’s Underperformance

Kimmeridge Energy Management Company, LLC ("Kimmeridge" or the "Firm") today released a presentation setting the record straight on PDC Energy, Inc. ("PDC" or the "Company") (NASDAQ: PDCE) operating performance and refuting data presented by PDC. A copy of the Kimmeridge presentation can be found here: http://kimmeridge.com/pdc_part5

Setting the record straight: The facts.

Since Bart Brookman has been appointed CEO of PDC (January 1, 2015), the Company has reported¹

• Cumulative Net Income (loss): ($560) million
• Cumulative Impairments: $924 million
• Cumulative Net cash flow: negative $1.63 billion
• Board Metrics Achieved: 10 of 21
• Cumulative Executive Compensation²: $55.7 million
• Average Bonus Pay vs. Target: 150%
• Cumulative SG&A: $553 million
• Changes to Internally set Peer Group: 30
• Absolute Share Price Performance: negative 11%
• Average ROACE: <0%
• Cash Returned to Shareholders: $0

From January 1, 2015 to date, WTI oil prices have increased from $53/bbl to $62/bbl.

Kimmeridge is disappointed that PDC continues to manipulate data to give shareholders a false impression of their operating performance, and that management appear unwilling to commit to delivering a return on capital, paying a dividend, returning cash to shareholders, and aligning their pay with total shareholder return.

Ben Dell, Founder and Managing Partner of Kimmeridge, said, “PDC’s shareholders have before them a critical decision. They can choose to support the Company’s proposed nominees to the Board, and in turn maintain PDC’s status quo, or they can vote for the Kimmeridge minority slate, and give their fellow shareholders the opportunity to effect change at PDC, with a refreshed Board who will commit to thinking and acting like owners.”

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¹ Source: PDC’s public filing data (financial and proxy statements) data for fiscal years ended December 31, 2015, 2016, 2017 and 2018 (the Period).
² Total compensation awarded in each year during the Period to the top 5 highest paid PDC executives.

“A vote for the existing PDC nominees is a vote for continued value destruction, underperformance, failure to meet internally-set targets, poor financial controls, bloated executive compensation and high SG&A. Kimmeridge’s nominees are highly qualified, experienced industry professionals who are focused on creating sustained value for all shareholders, while aligning management compensation with absolute performance and placing the Company on a path to profitability.”