Kimmeridge: Setting the Record Straight on PDC’s Underperformance

PDC’s portrayal of its operating performance is not what it
appears to be; Kimmeridge refutes PDC’s performance data

NEW YORK & DENVER–(BUSINESS WIRE)–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:

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.”


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.”

For ease of reference, links to Kimmeridge’s press releases can be found

Kimmeridge Nominees the chance to serve as a catalyst for change at PDC.
Kimmeridge Nominees stand ready to represent the voice of stockholders
who deserve to have a Board and management who are willing to lead
through the lens of ownership, setting the tone at the top for the Board
and management to think and act like owners.


Shareholders can vote electronically via the Internet, by telephone or
by signing and dating the GOLD Proxy Card or Voting Instruction
Form and mailing it in the postage paid envelope provided. If you have
questions about the voting process or need help in voting your shares,
please feel free to reach out to our proxy solicitor, Innisfree M&A
Incorporated (“Innisfree”) toll free at (877) 750-8338 or collect at
(212) 750-5833.

We urge shareholders NOT to vote using any WHITE proxy card or voting
instruction forms you receive from PDC. If you return the WHITE proxy
card – even by simply indicating “withhold” on the Company’s slate – you
will revoke any vote you had previously submitted for the Kimmeridge
Nominees on the GOLD proxy card.

About Kimmeridge Energy

Kimmeridge is a private equity firm, and direct operator, focused on the
development of unconventional oil and gas assets at the front-end of the
cost curve in the US upstream energy sector. We are also deeply familiar
with PDC’s core assets in the Permian basin, having owned and operated
those assets prior to selling them to PDC in 2016. We are stockholders
who believe that public company boards should have meaningful equity
ownership and must hold management accountable for performance. We are
currently invested in only one public E&P, that being PDC.


Kimmeridge Energy Management Company, LLC (“Kimmeridge”), Kimmeridge
Active Investments, LLC, Kimmeridge Chelsea, LLC, Benjamin Dell, Alice
E. Gould, James F. Adelson, Alexander Inkster, Noam Lockshin, Henry
Makansi and Neil McMahon (collectively, the “Participants”) have filed a
definitive proxy statement with the Securities and Exchange Commission
(the “SEC”), along with an accompanying GOLD proxy card to be used in
connection with the Participants’ solicitation of proxies from the
stockholders of PDC Energy, Inc. (the “Company”) for use at the
Company’s 2019 annual meeting of stockholders. All stockholders of the
Company are advised to read the foregoing proxy materials because they
contain important information, including additional information related
to the Participants. The definitive proxy statement and an accompanying
proxy card will be furnished to some or all of the Company’s
stockholders and are, along with other relevant documents, available at
no charge on the SEC’s website at

Information about the Participants and a description of their direct or
indirect interests by security holdings are contained in the definitive
proxy statement on Schedule 14A filed by Kimmeridge with the SEC on
April 18, 2019. This document can be obtained free of charge from the
source indicated above.


Investor Contact:
Scott Winter / Jonathan Salzberger
M&A Incorporated

Media Contact:
Daniel Yunger / Cathryn Vaulman

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