BUILT TO DELIVER SUSTAINABLE, LONG-TERM SHAREHOLDER VALUE May 8, 2019
PDC Energy Positioned to Drive Long-Term Value for Shareholders Top-tier asset positions in the Core Wattenberg and Delaware Basin The Right Assets Core Wattenberg wellhead returns among the best in the Lower 48 Delaware Basin…
PDC Energy Company Overview 2.6B Market Cap1 3.9B Enterprise Value1 Core Wattenberg Delaware Basin 545 96,000 net acres2 42,000 net acres3 425 MMBoe proved reserves 120 MMBoe proved reserves 100,000 Boe/d (40% oil)4…
The Right Assets Well-Positioned to Deliver Sustainable Free Cash Flow Third largest producer in one of the top rate-of-return horizontal oil plays in the U.S. Consolidated acreage in rural Weld County minimizes surface usage,…
The Right Assets 2019 Plan Significantly Enhances Efficiencies Core Wattenberg Capital investment of 500mm TILs by Lateral Length 2018 2019 Three rigs and one completion crew SRL/MRL/XRL well costs of 3/4/5mm with spud to spud drill…
The Right Assets Efficiency Gains & Commitment to Capital Discipline Core Wattenberg Operational Efficiencies Well Costs Below Budget Core Wattenberg benefiting from consolidated 5.0 5.0 acreage position 4.8 Track record as…
The Right Assets Steady Progress Towards Development Mode Delaware Basin TILs by Lateral Length Capital investment of 350mm 2018 2019 Includes 40mm of planned midstream investment Project 20% increase in lateral feet TILd compared…
The Right Assets Efficiency Gains & Commitment to Capital Discipline Delaware Basin Operational Efficiencies Well Costs Below Budget Delaware Basin continued operational improvements 14.0 13.0 12.9 Faster drill times More completion…
The Right Assets Systematic Improvements Quarter-Over-Quarter Delaware Basin Drilling Completions Consistent improvements in average drill times over past Modified completion design over time delivers consistent two years improvements…
The Right Strategy Adapting to the Changing Landscape Developed Multi-Year Plan Focused to Achieve Specific Targets at 50 Oil & 3 Gas 1 Sustainable FCF Year-over-year growth in FCF of 50mm Positioned to return capital to…
The Right Strategy Returning Capital to Shareholders Key considerations in Stock Repurchase Program Board approved program Up to 200mm program, dependent upon market conditions Near-term value-creation Execution of program with…
The Right Strategy 2019 Plan Expected to Deliver Differentiating Results Adjusted Guidance to Reflect 55/Bbl WTI and 3/Mcf NYMEX Prices Adj. Cash Flow Capital 2019 Guidance Overview from Ops Investment1 (880 - 930mm) (810 - 870mm)…
The Right Strategy Prioritizing Free Cash Flow & Debt-Adj. Per Share Growth Adjusted Outlook to Reflect 55/3 NYMEX 2019 Highlights Production and Leverage Ratio Outlook 80 2.0x Production Commitment to capital discipline 70 Leverage…
CORPORATE GOVERNANCE
PDC Energy Corporate Governance Structured to Promote Accountability Independent Chairman Jeffrey C. Swoveland has decades of experience in E&P industry and Independent Board Leadership provides strong leadership and oversight of…
The Right Team Highly Experienced in Large-Scale E&P Operations and Colorado Regulations The three PDC 2019 nominees Bart Brookman Mark E. Ellis Larry F. Mazza Jeffrey C. Swoveland Anthony J. Crisafio Christina M. Ibrahim Randy S.…
The Right Team Proper Mix of Skills and Experience to Drive Long Term Value PDCs directors have significant expertise in areas that are essential to the Companys success, including a combined 84 years of senior leadership in the oil &…
The Right Team Continuous Refreshment Has Resulted in a Balanced Board of Directors Balanced Board with strong expertise in key functional areas Directors have a balanced range of tenures Rigorous, thoughtful selection criteria has…
Corporate Governance PDCs Shareholder-Focused Pay-for-Performance Philosophy Compensation structure is designed to attract, retain, and motivate Equity represents a significant portion of direct compensation AVERAGE SHAREHOLDER…
Corporate Governance PDC Exec Comp Demonstrates Strong Pay-for-Performance Alignment Approximately 2/3rds of PDC executives pay consists of equity incentives that are highly correlated with the absolute and relative performance of PDC…
Corporate Governance Compensation Framework Ensures Further Shareholder Alignment Relative TSR vs. CEO compensation 2019 proxy peers1 PDC continues to exhibit its commitment to alignment with shareholders PDCs executive compensation…
PDC Energy Consistently Solid Relative TSR Performance Since Bart Brookmans CEO appointment on January 1st, 2015, PDC has delivered solid relative TSR returns over the short- and long-term, despite unique regulatory challenges given…
The Right Team Support PDC Energys High-Quality Director Nominees PDC Energy has taken decisive steps to reposition its portfolio and is executing a long-term strategy to capitalize on the Companys high-quality assets and operational…
ANALYSIS OF KIMMERIDGE DEMANDS
Kimmeridges Changing Demands Highlight a Lack of Public Company Operating Experience Kimmeridges constantly changing demands PDCs analysis 1 Develop a plan to earning a return on average 1 PDC is already a leader in proactively adopting…
1 An Appropriate Set of Peers Yields Considerably Different Conclusions Who are the Appropriate Peers for PDC Enterprise Value (bn) Diversified peers Permian peers DJ peers 9.2 8.9 8.0 PDC current Enterprise Value of 3.9bn 4.7 4.2…
1 PDCs FCF Margin and CROCI Consistently Benchmark at the Top-End of PDCs Appropriate Peer Set PDC is Focused on Free Cash Flow Margin and CROCI to Drive Shareholder Value Free cash flow margin is a short-term metric which identifies…
1 PDCs FCF Margin and CROCI Consistently Benchmark at the Top-End of PDCs Appropriate Peer Set 2015 CROCI 2016 CROCI 2017 CROCI 2018 CROCI 2019e CROCI 2020e CROCI Company Value Company Value Company Value Company Value Company Value…
1 Kimmeridges Own Analysis Shows that PDCs Returns Have Exceeded Peers PDC employs a disciplined approach that considers both prudent capital allocation and free cash flow, as well as growth Since 2008, PDC has made great strides to…
2 PDC has already shown significant improvement in G&A in 1Q19 G&A per Boe 1Q19 G&A includes 0.80 per Boe of investments in 6.00 Responsible Operations Scalability Legal ensuring PDCs long-term success 4.78 4.01 3.97 4.19 0.25…
3 PDC is Returning Capital to Shareholders Announced share repurchase program Board approved share repurchase program Up to 200mm program, dependent upon market conditions Near-term value-creation Execution of program with target…
3 PDC Will Continue to Holistically Evaluate Appropriate Capital Return Opportunities Implementing Kimmeridges dividend demand would not be a sound or sustainable financial policy No peers are at or near 4% dividend yield1 Dividends…
4 PDC has Efficiently Executed on its Development Program, Exceeding Expectations PDC consistently delivers on guidance Kimmeridge cherry picks 2018 as a year in which some actual results did not meet expectations without consideration…
5 PDC has Opportunistically Enhanced its Asset Scale in Core Areas PDC regularly evaluates strategic transactions that will increase operational efficiencies and create long-term value for shareholders Since 2016, PDC has made multiple…
6 PDCs Slate of Directors Have Substantially More Experience Relative to Kimmeridges Director Nominees Kimmeridges Director slate would lead to substantial loss of diversity of thought and key E&P leadership experience PDCs nominees…
7 Management Compensation is Aligned with Shareholder Interests and Compares Favorably to the Industry 2019 proxy peers 2018 named executive compensation as % of EBITDA1 PDC continues to exhibit its commitment to alignment with…
In Summary, Kimmeridges Demands Lack Substance and Ignore PDCs Top-Tier Track Record Kimmeridges demands include only three actual recommendations These demands ignore PDCs track record and already strong governance Peer leading…
Kimmeridges Interests are Not Aligned with Other Stockholders Kimmeridge does not have a track record of enhancing long term shareholder value Carrizo timeline 35 6/22/18: Kimmeridge sells a majority Activist Ends Campaign Against…
What Does Kimmeridge Really Want We believe Kimmeridge is solely looking out for their own self-interest The facts By its own admission, Kimmeridge has repeatedly requested preferential inside access to PDCs management, Board and…
Conclusion Support PDC Energys High-Quality Director Nominees SUPPORT WHITE PDC Energy has taken decisive steps to reposition its portfolio and is executing a long-term strategy to capitalize on the Companys high-quality assets and…
APPENDIX
PDC Energy Corporate Social Responsibility SAFE OPERATIONS EMPLOYEES MATTER COMMUNITY OUTREACH May 2019 44
PDC Energy Is Committed to Corporate Social Responsibility Health and Safety Commitment to Environment Full disclosure of Safety Data Sheets for employees, customers, suppliers, and others We use solar panels to monitor and control…
PDCs Highly Qualified Board of Directors Bart Brookman (President & CEO) Director since 2015 Mr. Brookman, the Companys President and Chief Executive Officer (CEO), was appointed to the Board in January 2015, simultaneous with his…
PDCs Highly Qualified Board of Directors Jeffrey C. Swoveland (Non-Executive Chairman) Director since 1991 Mr. Swoveland, a National Association of Corporate Directors Board Leadershop Fellow, was first elected to the Board in 1991…
PDCs Highly Qualified Board of Directors Randy S. Nickerson Director since 2017 Mr. Nickerson joined the Board in March 2017. Mr. Nickerson most recently served as the Executive Vice President, Corporate Strategy of Marathon…
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