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Table of Contents

As filed with the Securities and Exchange Commission on September 25, 2019

Registration No. 333-                


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



LOGO

PDC Energy, Inc.
(Exact Name of Registrant As Specified in Its Charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  1311
(Primary Standard Industrial
Classification Code Number)
  95-2636730
(I.R.S. Employer
Identification Number)

1775 Sherman Street, Suite 3000
Denver, Colorado 80203
(303) 860-5800

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Nicole L. Martinet
General Counsel, Senior Vice President and Corporate Secretary
PDC Energy, Inc.
1775 Sherman Street, Suite 3000
Denver, Colorado 80203
(303) 860-5800
(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Christine B. LaFollette
Akin Gump Strauss Hauer & Feld LLP
1111 Louisiana St., 44th Floor
Houston, TX 77002
(713) 220-5996

 

Cathleen M. Osborn
Executive Vice President, General
Counsel and Secretary
SRC Energy Inc.
1675 Broadway, Suite 2600
Denver, CO 80202
(720) 616-4300

 

Igor Kirman
Elina Tetelbaum
Wachtell, Lipton, Rosen &
Katz
51 West 52nd St.
New York, NY 10019
(212) 403-1000

 

John A. Elofson
Samuel J. Seiberling
Davis Graham & Stubbs LLP
1550 17th St., Suite 500
Denver, CO 80202
(303) 892-7335



Approximate date of commencement of proposed sale of the securities to the public:
As soon as practicable after this Registration Statement is declared effective.

             If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.    o

             If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

             If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

             Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o   Smaller reporting company o

Emerging growth company o

             If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

             If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

             Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) o

             Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) o



CALCULATION OF REGISTRATION FEE

               
 

Title of Each Class of Securities
to be Registered

  Amount to be
Registered(1)
  Proposed Maximum
Offering Price Per
Share
  Proposed Maximum
Aggregate Offering
Price(2)
  Amount of
Registration Fee(3)
 

Common stock, par value $0.01 per share

  39,923,671   N/A   $1,212,871,023   $147,000

 

(1)
Represents the maximum number of shares of common stock, par value $0.01 per share, of PDC Energy, Inc. ("PDC common stock") estimated to be issuable, or subject to options, restricted stock units, performance share awards and stock bonus awards (collectively "SRC equity awards") of SRC Energy Inc. ("SRC") that may be assumed by PDC Energy, Inc. upon the completion of the merger with SRC described herein. The number of shares of PDC common stock being registered is calculated based on (a) the sum of (i) 243,509,005 shares of common stock, par value $0.001 per share, of SRC ("SRC common stock") outstanding as of September 16, 2019 and (ii) 9,172,458 shares of SRC common stock underlying SRC equity awards outstanding as of September 16, 2019, multiplied by (b) the exchange ratio of 0.158 of a share of PDC common stock for each share of SRC common stock.

(2)
Calculated pursuant to Rule 457(f)(1) and Rule 457(c) under the Securities Act of 1933, as amended, solely for the purpose of calculating the registration fee based on the average of the high and low prices for shares of SRC common stock as reported on the NYSE American on September 23, 2019 ($4.80 per share), multiplied by 252,681,463 (which represents the estimated maximum number of shares of SRC common stock that may be exchanged or converted for the securities being registered). In accordance with Rule 416, this Registration Statement also covers an indeterminate number of additional shares of securities as may be issuable as a result of stock splits, stock dividends or similar transactions.

(3)
The registration fee for the securities registered hereby has been calculated pursuant to Section 6(b) of the Securities Act of 1933, as amended, by multiplying the proposed maximum aggregate offering price for the securities by 0.0001212.



             The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This joint proxy statement/prospectus is not an offer to sell these securities and does not constitute the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY—SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 2019

LOGO   LOGO

JOINT LETTER TO STOCKHOLDERS OF PDC ENERGY, INC.
AND SHAREHOLDERS OF SRC ENERGY INC.

Dear Security Holders:

          PDC Energy, Inc., or PDC, and SRC Energy Inc., or SRC, have entered into a merger agreement (which, as it may be amended from time to time, we refer to as the "merger agreement") providing for the acquisition of SRC by PDC pursuant to a merger between PDC and SRC (which we refer to as the "merger"). PDC stockholders as of the close of business on                        , 2019, the PDC record date, are invited to attend a special meeting of PDC stockholders on                        , 2019, at                        , Mountain Time, to consider and vote upon proposals to adopt and approve the merger agreement and the issuance of shares of PDC common stock in connection with the merger. SRC shareholders as of the close of business on                        , 2019, the SRC record date, are invited to attend a special meeting of SRC shareholders at                        , Mountain Time, on                        , 2019, to consider and vote upon a proposal to adopt and approve the merger agreement and a non-binding advisory proposal to approve certain compensation that may be paid or become payable to SRC's named executive officers that is based on or otherwise relates to the merger.

          For SRC shareholders, if the merger is completed, you will be entitled to receive, for each issued and outstanding share of SRC common stock owned by you immediately prior to the effective time of the merger, 0.158 of a share of PDC common stock, with cash in lieu of any fractional shares (which we refer to as the "merger consideration"), with certain exceptions as further described in the joint proxy statement/prospectus accompanying this notice. The market value of the merger consideration will fluctuate with the price of PDC common stock. Based on the closing price of PDC common stock on August 23, 2019, the last trading day before the public announcement of the signing of the merger agreement, the value of the per share merger consideration payable to holders of SRC common stock upon completion of the merger was approximately $3.99. Based on the closing price of PDC common stock on                        , 2019, the last practicable date before the date of the joint proxy statement/prospectus accompanying this notice, the value of the merger consideration payable to holders of SRC common stock upon completion of the merger was approximately $            . PDC and SRC urge you to obtain current stock price quotations for PDC common stock and SRC common stock. PDC common stock is traded on The Nasdaq Global Select Market under the symbol "PDCE" and SRC common stock is traded on the NYSE American under the symbol "SRCI."

          The PDC board of directors has determined that the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of PDC common stock in connection with the merger, are fair to, and in the best interests of, PDC and the PDC stockholders, adopted and approved the merger agreement and the transactions contemplated thereby, including the issuance of shares of PDC common stock in connection with the merger, directed that the merger agreement be submitted to the PDC stockholders for approval and recommended that the PDC stockholders approve the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of PDC common stock in connection with the merger. The PDC board unanimously recommends that PDC stockholders vote "FOR" the PDC merger proposal and "FOR" the issuance of shares of PDC common stock proposal.

          The SRC board of directors has determined that the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, SRC and the SRC shareholders, adopted and approved the merger agreement and the transactions contemplated thereby, including the merger, directed that the merger agreement be submitted to the SRC shareholders for approval and recommended that the SRC shareholders approve the merger agreement and the transactions contemplated thereby, including the merger. The SRC board unanimously recommends that SRC shareholders vote "FOR" the SRC merger proposal and "FOR" the non-binding compensation proposal.

          PDC and SRC will each hold a special meeting of their respective stockholders and shareholders to consider certain matters relating to the merger. PDC and SRC cannot complete the merger unless, among other things, PDC stockholders approve the merger and the issuance of shares of PDC common stock in connection with the merger and SRC shareholders approve the merger agreement.

          Your vote is very important. To ensure your representation at PDC's special meeting or SRC's special meeting, complete and return the applicable enclosed proxy card or submit your proxy by phone or the Internet. Please vote promptly whether or not you expect to attend PDC's special meeting or SRC's special meeting. Submitting a proxy now will not prevent you from being able to vote in person at PDC's special meeting or SRC's special meeting.

          The joint proxy statement/prospectus accompanying this notice is also being delivered to SRC shareholders as PDC's prospectus for its offering of shares of PDC common stock to SRC shareholders in connection with the merger.

          The obligations of PDC and SRC to complete the merger are subject to the satisfaction or waiver of the conditions set forth in the merger agreement, a copy of which is included as part of the accompanying joint proxy statement/prospectus. The joint proxy statement/prospectus provides you with detailed information about the merger. It also contains or incorporates by reference information about PDC and SRC and certain related matters. You are encouraged to read the joint proxy statement/prospectus carefully and in its entirety. In particular, you should carefully read the section entitled "Risk Factors" beginning on page 40 of the joint proxy statement/prospectus for a discussion of risks you should consider in evaluating the merger and the issuance of shares of PDC common stock in connection with the merger and how they will affect you.

Sincerely,   Sincerely,

 

Barton R. Brookman
President and Chief Executive Officer
PDC Energy, Inc.

 

  

Lynn A. Peterson
Chairman, Chief Executive Officer and President
SRC Energy Inc.

          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under the accompanying joint proxy statement/prospectus or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

          The joint proxy statement/prospectus is dated                        , 2019 and is first being mailed to stockholders of PDC and shareholders of SRC on or about                        , 2019.


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LOGO

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON                        , 2019
AT            

        NOTICE IS HEREBY GIVEN that a special meeting of stockholders of PDC Energy, Inc., or PDC, will be held on                        , 2019, at                , Mountain Time, at                , to consider and vote on the following proposals:

        PDC stockholder adoption and approval of the PDC merger proposal and the PDC issuance proposal is required to complete the merger. PDC will transact no other business at the PDC special meeting. The record date for the PDC special meeting has been set as                        , 2019. Only PDC stockholders of record as of the close of business on such record date are entitled to notice of, and to vote at, the PDC special meeting or any subsequent reconvening of the PDC special meeting following any adjournments and postponements of the PDC special meeting. For additional information regarding the PDC special meeting, see the section entitled "Special Meeting of PDC Stockholders" beginning on page 56 of the joint proxy statement/prospectus accompanying this notice.

        The PDC board of directors unanimously recommends that you vote "FOR" the PDC merger proposal and "FOR" the PDC issuance proposal.

        The PDC merger proposal and the PDC issuance proposal are described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

        PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE PDC SPECIAL MEETING. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.

Your vote is very important. Approval of the PDC merger proposal requires the affirmative vote of the holders of a majority of the outstanding PDC common stock, and approval of the PDC issuance proposal requires the affirmative vote of a majority of votes cast by PDC stockholders present in person or by proxy at the PDC special meeting and entitled to vote on such proposal. Approval of both the PDC merger proposal and the PDC issuance proposal is a condition to the completion of the merger. PDC stockholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes by phone or the Internet. Simply follow the instructions provided on the enclosed proxy card. Abstentions will be counted as votes "AGAINST" the PDC merger proposal and the PDC issuance proposal. Broker non-votes and failures to vote will be counted as votes "AGAINST" the PDC merger proposal but will have no effect on the PDC issuance proposal.

    BY ORDER OF THE BOARD OF DIRECTORS,

 

 

  

Jeffrey C. Swoveland
Non-Executive Chairman of the Board
PDC Energy, Inc.
                        , 2019

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LOGO

NOTICE OF THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON                        , 2019
AT            

        NOTICE IS HEREBY GIVEN that a special meeting of shareholders of SRC Energy Inc., or SRC, will be held on                    , 2019, at                , Mountain Time, at                , to consider and vote on the following proposals:

        SRC shareholder approval of the SRC merger proposal is required to complete the merger between PDC and SRC, as contemplated by the merger agreement. SRC shareholders will also be asked to approve the non-binding compensation proposal, which is not a condition to the merger. SRC does not intend to transact any other business at the SRC special meeting. The record date for the SRC special meeting has been set as                        , 2019. Only SRC shareholders of record as of the close of business on such record date are entitled to notice of, and to vote at, the SRC special meeting or any subsequent reconvening of the SRC special meeting following any adjournments and postponements of the SRC special meeting. For additional information regarding the SRC special meeting, see the section entitled "Special Meeting of SRC Shareholders" beginning on page 62 of the joint proxy statement/prospectus accompanying this notice.

        The SRC board of directors unanimously recommends that holders of SRC common stock vote "FOR" the SRC merger proposal and "FOR" the non-binding compensation proposal.

        The SRC shareholder proposals are described in more detail in the accompanying joint proxy statement/prospectus, which you should read carefully and in its entirety before you vote. A copy of the merger agreement is attached as Annex A to the accompanying joint proxy statement/prospectus.

        PLEASE VOTE AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TO ATTEND THE SRC SPECIAL MEETING. IF YOU LATER DESIRE TO REVOKE OR CHANGE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE MANNER DESCRIBED IN THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS. FOR FURTHER INFORMATION CONCERNING THE PROPOSALS BEING VOTED UPON, USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE ACCOMPANYING JOINT PROXY STATEMENT/PROSPECTUS.

Your vote is very important. Approval of the SRC merger proposal by the SRC shareholders is a condition to the merger and requires the affirmative vote of the holders of a majority of the outstanding shares of SRC common stock. Approval of the non-binding compensation proposal requires that the votes cast in favor of the proposal exceed the votes cast against the proposal. SRC shareholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, which requires no postage if mailed in the United States, or to submit their votes by phone or the Internet. Simply follow the instructions provided on the enclosed proxy card. Abstentions, failures to vote and broker non-votes will have the same effect as votes "AGAINST" the SRC merger proposal but will not count as votes "FOR" or "AGAINST" the non-binding compensation proposal.

     

Cathleen M. Osborn
Executive Vice President,General Counsel
and Secretary

SRC Energy Inc.
                    , 2019

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REFERENCES TO ADDITIONAL INFORMATION

        This joint proxy statement/prospectus incorporates by reference important business and financial information about PDC Energy, Inc. (which we refer to as "PDC") and SRC Energy Inc. (which we refer to as "SRC") from other documents that are not included in or delivered with this joint proxy statement/prospectus, including documents that PDC and SRC have filed with the U.S. Securities and Exchange Commission (which we refer to as the "SEC"). For a listing of documents incorporated by reference herein, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively. This information is available for you to review free of charge through the SEC's website at www.sec.gov. The information contained on the website of the SEC is expressly not incorporated by reference into this joint proxy statement/prospectus.

        You may request copies of this joint proxy statement/prospectus and any of the documents incorporated by reference herein or other information concerning PDC or SRC, without charge, upon written or oral request to the PDC's or SRC's principal executive offices. The respective addresses and phone numbers of such principal offices are listed below.

For PDC Stockholders:
  For SRC Shareholders:
PDC Energy, Inc.   SRC Energy Inc.
1775 Sherman Street, Suite 3000   1675 Broadway, Suite 2600
Denver, Colorado 80203   Denver, Colorado 80202
Attention: Corporate Secretary   Attention: Corporate Secretary
Telephone: (303) 860-5800   Telephone: (720) 616-4300

        To obtain timely delivery of these documents before the PDC special meeting, PDC stockholders must request the information no later than                  , 2019 (which is five business days before the date of the PDC special meeting).

        To obtain timely delivery of these documents before the SRC special meeting, SRC shareholders must request the information no later than                  , 2019 (which is five business days before the date of the SRC special meeting).

        In addition, if you have questions about the merger or this joint proxy statement/prospectus, would like additional copies of this joint proxy statement/prospectus or need to obtain proxy cards or other information related to the proxy solicitation, contact MacKenzie Partners, Inc., the proxy solicitor for PDC and SRC. You will not be charged for any of these documents that you request.


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ABOUT THIS JOINT PROXY STATEMENT/PROSPECTUS

        This document, which forms part of a registration statement on Form S-4 filed with the SEC by PDC (File No. 333-        ), constitutes a prospectus of PDC under Section 5 of the Securities Act of 1933, as amended (which we refer to as the "Securities Act") with respect to the shares of common stock of PDC, par value $0.01 per share (which we refer to as "PDC common stock"), to be issued to SRC shareholders pursuant to the Agreement and Plan of Merger, dated August 25, 2019 (which, as it may be amended from time to time, we refer to as the "merger agreement"), by and between PDC and SRC.

        This document also constitutes a notice of meeting and proxy statement of each of PDC and SRC under Section 14(a) of the Securities Exchange Act of 1934, as amended (which we refer to as the "Exchange Act").

        PDC has supplied all information contained or incorporated by reference herein relating to PDC, and SRC has supplied all information contained or incorporated by reference herein relating to SRC. PDC and SRC have both contributed to the information relating to the merger and the merger agreement contained in this joint proxy statement/prospectus.

        You should rely only on the information contained in or incorporated by reference herein in connection with any vote, the giving or withholding of any proxy or any investment decision in connection with the merger agreement. PDC and SRC have not authorized anyone to provide you with information that is different from that contained in or incorporated by reference herein. This joint proxy statement/prospectus is dated                  , 2019, and you should not assume that the information contained in this joint proxy statement/prospectus is accurate as of any date other than such date unless otherwise specifically provided herein. Further, you should not assume that the information incorporated by reference herein is accurate as of any date other than the date of the incorporated document. Neither the mailing of this joint proxy statement/prospectus to the stockholders of PDC and shareholders of SRC, nor the issuance by PDC of PDC common stock pursuant to the merger agreement, will create any implication to the contrary.

        All currency amounts referenced in this joint proxy statement/prospectus are in U.S. dollars.


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TABLE OF CONTENTS

QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

    1  

SUMMARY

   
15
 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA OF PDC

   
32
 

SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA OF SRC

   
34
 

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

   
36
 

SUMMARY PRO FORMA OIL, NATURAL GAS AND NGL RESERVE INFORMATION AND PRODUCTION DATA

   
37
 

COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

   
38
 

DIVIDEND AND SHARE PRICE INFORMATION

   
39
 

RISK FACTORS

   
40
 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

   
53
 

INFORMATION ABOUT THE COMPANIES

   
55
 

SPECIAL MEETING OF PDC STOCKHOLDERS

   
56
 

PDC PROPOSALS

   
61
 

SPECIAL MEETING OF SRC SHAREHOLDERS

   
62
 

SRC PROPOSALS

   
67
 

THE MERGER

   
68
 

THE MERGER AGREEMENT

   
121
 

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

   
161
 

UNAUDITED PRO FORMA CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS

   
165
 

COMPARISON OF RIGHTS OF STOCKHOLDERS OF PDC AND SHAREHOLDERS OF SRC

   
178
 

VALIDITY OF COMMON STOCK

   
184
 

EXPERTS

   
185
 

HOUSEHOLDING OF PROXY MATERIALS

   
186
 

FUTURE STOCKHOLDER PROPOSALS

   
187
 

WHERE YOU CAN FIND MORE INFORMATION

   
189
 

INFORMATION INCORPORATED BY REFERENCE

   
190
 

ANNEX A: MERGER AGREEMENT

   
A-1
 

ANNEX B: OPINION OF J.P. MORGAN SECURITIES LLC

   
B-1
 

ANNEX C: OPINION OF CITIGROUP GLOBAL MARKETS INC. 

   
C-1
 

ANNEX D: OPINION OF GOLDMAN SACHS & CO. LLC

   
D-1
 

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QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE SPECIAL MEETINGS

        The following are answers to certain questions that you may have regarding the PDC special meeting and SRC special meeting. PDC and SRC urge you to read carefully the remainder of this document because the information in this section may not provide all the information that might be important to you in determining how to vote. Additional important information is also contained in the annexes to, and the documents incorporated by reference in, this document.

Q:
Why am I receiving this joint proxy statement/prospectus?

A.
You are receiving this joint proxy statement/prospectus because PDC and SRC have entered into the merger agreement, pursuant to which, on the terms and subject to the conditions included in the merger agreement, PDC has agreed to acquire SRC by means of a merger of SRC with and into PDC (the "merger") and your vote is required in connection with the merger. The merger agreement, which governs the terms of the merger, is attached to this joint proxy statement/prospectus as Annex A.
Q:
When and where will the special meetings take place?

A:
PDC.    The PDC special meeting will be held at                , Mountain Time, on                    , 2019, at                 .
Q:
What matters will be considered at the special meetings?

A:
PDC.    The PDC stockholders are being asked to consider and vote on :

a proposal to adopt and approve the merger agreement and the merger of PDC and SRC pursuant to the merger agreement (which we refer to as the "PDC merger proposal"); and

a proposal to adopt and approve the issuance of shares of PDC common stock in connection with the merger (which we refer to as the "PDC issuance proposal").

1


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Q:
Is my vote important?

A:
PDC.    Yes. Your vote is very important. The merger cannot be completed unless the PDC merger proposal is approved by the affirmative vote of the holders of a majority of the outstanding shares of PDC common stock and the PDC issuance proposal is approved by the affirmative vote of a majority of votes cast by PDC stockholders present in person or by proxy at the PDC special meeting and entitled to vote on such proposal. Only PDC stockholders as of the close of business on the PDC record date are entitled to vote at the PDC special meeting. The board of directors of PDC (which we refer to as the "PDC board" or the "PDC board of directors") unanimously recommends that such PDC stockholders vote "FOR" the approval of the PDC merger proposal and the PDC issuance proposal.
Q:
If my shares of PDC common stock and/or SRC common stock are held in "street name" by my broker, bank or other nominee, will my broker, bank or other nominee automatically vote those shares for me?

A:
If your shares are held through a broker, bank or other nominee, you are considered the "beneficial holder" of the shares held for you in what is known as "street name." You are not considered the "record holder" of those shares. If this is the case, this joint proxy statement/prospectus has been forwarded to you by your broker, bank or other nominee. If you hold your shares in "street name," you must provide your broker, bank or other nominee with instructions on how to vote your shares. Otherwise, your broker, bank or other nominee cannot vote your shares on any of the proposals to be considered at the PDC special meeting or the SRC special meeting, as applicable. A so-called "broker non-vote" will result if your broker, bank or other nominee returns a proxy but you have not provided the broker, bank or nominee with instruction as to how the shares should be voted on a particular matter.

2


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Q:
What PDC stockholder vote is required for the adoption and approval of the PDC merger proposal and the PDC issuance proposal?

A:
The PDC merger proposal.    Adoption and approval of the PDC merger proposal requires the affirmative vote of the holders of a majority of the outstanding PDC common stock. Abstentions will have the same effect as votes "AGAINST" the proposal. Broker non-votes and failures to vote will have the same effect as votes "AGAINST" the proposal.
Q:
What SRC shareholder vote is required for the approval of the SRC merger proposal and non-binding compensation proposal?

A:
The SRC merger proposal.    Approval of the SRC merger proposal requires the affirmative vote of a majority of the outstanding shares of SRC common stock entitled to vote on the proposal. Abstentions, broker non-votes and failures to vote will have the same effect as votes "AGAINST" the proposal.
Q:
Who will count the votes?

A:
The votes at the PDC special meeting will be counted by Broadridge Corporate Issuer Solutions, Inc. ("Broadridge"), PDC's transfer agent, which will serve as an independent inspector of elections. The votes at the SRC special meeting will also be counted by Broadridge, which will serve as an independent inspector of elections.

Q:
What will SRC shareholders receive if the merger is completed?

A:
As a result of the merger, each share of SRC common stock issued and outstanding immediately prior to the effective time of the merger (other than shares held in treasury by SRC or shares owned by PDC and, in each case, not held on behalf of third parties (which we refer to collectively as the "cancelled shares")) will be converted into the right to receive 0.158 of a share of PDC common stock (which we refer to as the "exchange ratio"), with cash in lieu of any fractional shares (which we refer to as the "merger consideration"). For information regarding the treatment of SRC equity awards, please see the Question and Answer directly below.

3


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Q:
What will holders of SRC equity awards receive in the merger?

A:
SRC RSU Awards

4


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Q:
What equity stake will SRC shareholders hold in PDC immediately following the merger?

A:
Based on the number of issued and outstanding shares of PDC common stock and SRC common stock as of September 16, 2019, and the exchange ratio of 0.158 of a share of PDC common stock for each share of SRC common stock, holders of shares of SRC common stock as of immediately prior to the effective time of the merger would hold, in the aggregate, approximately 39% of the issued and outstanding shares of PDC common stock immediately following the effective time of the merger (without giving effect to any shares of PDC common stock held by SRC shareholders prior to the merger). The exact equity stake of SRC shareholders in PDC immediately following the effective time of the merger will depend on the number of shares of PDC common stock and SRC common stock issued and outstanding immediately prior to the effective time of the merger, as provided in the section entitled "The Merger Agreement—Effect of the Merger on Capital Stock; Merger Consideration" beginning on page 122.

Q:
How do the PDC board and SRC board recommend that I vote?

A:
PDC.    The PDC board unanimously recommends that PDC stockholders vote "FOR" the adoption and approval of the PDC merger proposal and "FOR" the PDC issuance proposal. For additional information regarding how the PDC board recommends that PDC stockholders vote, see the section entitled "The Merger—Recommendation of the PDC Board of Directors and PDC's Reasons for the Merger" beginning on page 75.
Q:
Why are SRC shareholders being asked to vote on executive officer compensation?

A:
The SEC has adopted rules that require SRC to seek a non-binding advisory vote on certain compensation that may be paid or become payable to SRC's named executive officers that is based on or otherwise relates to the merger. For additional information regarding the non-binding compensation advisory proposal, see the section entitled "SRC Proposals—Non-binding Compensation Proposal" beginning on page 67. SRC urges its shareholders to read the section entitled "The Merger—Interests of SRC Directors and Executive Officers in the Merger" beginning on page 113.

Q:
Who is entitled to vote at the special meeting?

A:
PDC special meeting.    The PDC board has fixed                    , 2019 as the record date for the PDC special meeting (which we refer to as the "PDC record date"). All stockholders of record of PDC common stock as of the close of business on the PDC record date are entitled to receive notice of, and to vote at, the PDC special meeting, provided that those shares remain outstanding on the date of the PDC special meeting. As of the PDC record date, there were            shares of PDC common stock outstanding. Physical attendance at the PDC special meeting is not required to vote. Instructions on how to vote your shares without attending the PDC special meeting are provided below.

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Q:
How many votes do I have?

A:
PDC stockholders.    Each PDC stockholder of record is entitled to one vote for each share of PDC common stock held of record by the stockholder as of the close of business on the PDC record date.
Q:
What constitutes a quorum for the PDC special meeting and SRC special meeting?

A:
A quorum is the minimum number of stockholders or shareholders, as applicable, necessary to hold a valid meeting.
Q:
What will happen to SRC as a result of the merger?

A:
If the merger is completed, SRC will merge with and into PDC. As a result of the merger, the separate corporate existence of SRC will cease, and PDC will continue as the surviving corporation in the merger. Shares of SRC common stock will no longer be publicly traded and will be delisted from the NYSE American.

Q:
I own shares of SRC common stock. What will happen to those shares as a result of the merger?

A:
If the merger is completed, your shares of SRC common stock will be converted into the right to receive the merger consideration. All such shares of SRC common stock will cease to be outstanding and will automatically be cancelled. Each holder of a share of SRC common stock that was outstanding immediately prior to the effective time of the merger will cease to have any rights with respect to shares of SRC common stock except the right to receive the merger consideration, any dividends or distributions made with respect to shares of PDC common stock with a record date after the effective time of the merger, and any cash to be paid in lieu of any fractional shares of PDC common stock, in each case to be issued or paid upon the exchange of any certificates or

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Q:
Where will the PDC common stock that SRC shareholders receive in the merger be publicly traded?

A:
Assuming the merger is completed, the shares of PDC common stock that SRC shareholders receive in the merger will be listed and traded on Nasdaq.

Q:
What happens if the merger is not completed?

A:
If the SRC merger proposal is not approved by SRC shareholders or if the PDC merger proposal or the PDC issuance proposal is not approved by PDC stockholders or if the merger is not completed for any other reason, SRC shareholders will not receive any merger consideration in connection with the merger, and their shares of SRC common stock will remain outstanding. SRC will remain an independent public company and SRC common stock will continue to be listed and traded on the NYSE American. Additionally, if the SRC merger proposal is not approved by SRC shareholders or if the merger is not completed for any other reason, PDC will not issue shares of PDC common stock to SRC shareholders, regardless of whether the PDC merger and issuance proposals are approved. If the merger agreement is terminated under specified circumstances, either SRC or PDC (depending on the circumstances) may be required to pay the other party a termination fee or other termination-related payment. For a more detailed discussion of the termination fees, see "The Merger Agreement—Termination" beginning on page 157.

Q:
What happens if the non-binding compensation proposal is not approved by SRC shareholders?

A:
This vote is advisory and non-binding, and the merger is not conditioned or dependent upon the approval of the non-binding compensation proposal by SRC shareholders. However, SRC and PDC value the opinions of SRC shareholders and PDC expects to consider the outcome of the vote, along with other relevant factors, when considering future executive compensation, assuming the merger is completed. Because the executive compensation to be paid in connection with the merger is based on the terms of the merger agreement as well as the contractual arrangements with SRC's named executive officers, such compensation will be payable regardless of the outcome of this advisory vote, if the SRC merger proposal is approved and the merger is consummated (subject only to the contractual conditions applicable thereto). However, SRC seeks the support of its shareholders and believes that shareholder support is appropriate given the nature of the transaction and the structure of SRC's executive compensation program.

Q:
What is a proxy and how can I vote my shares in person at the special meetings?

A:
A proxy is a legal designation of another person to vote the stock you own.

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Q:
How can I vote my shares without attending the special meetings?

A:
PDC.    If you are a stockholder of record of PDC common stock as of the close of business on                     , 2019, the PDC record date, you can vote by proxy by phone, the Internet or mail by following the instructions provided in the enclosed proxy card. Please note that if you are a beneficial owner who holds shares in street name, you must vote by submitting voting instructions to your broker, bank or other nominee, or otherwise by following instructions provided by your broker, bank or other nominee. Phone and Internet voting may be available to beneficial owners. Please refer to the vote instruction form provided by your broker, bank or other nominee.
Q:
What is the difference between holding shares as a holder of record and as a beneficial owner who holds shares in street name?

A:
PDC.    If your shares of PDC common stock are registered directly in your name with PDC's transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are considered the stockholder of record with respect to those shares, and access to proxy materials is being provided directly to you. If your shares are held in a stock brokerage account or by a broker, bank or other nominee, then you are considered the beneficial owner of those shares, which are considered to be held in "street name." Access to proxy materials is being provided to you by your broker, bank or other nominee.

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Q:
What should I do if I receive more than one set of voting materials?

A:
You may receive more than one set of voting materials relating to the PDC special meeting and/or the SRC special meeting if you hold shares of both PDC common stock and SRC common stock or if you hold shares of PDC common stock and/or SRC common stock in "street name" and also directly in your name as a stockholder of record or shareholder of record, as applicable, or otherwise or if you hold shares of PDC common stock and/or SRC common stock in more than one brokerage account.
Q:
I am a participant in PDC's 401(k) and Profit Sharing Plan and have shares of PDC common stock credited to my plan. How do I vote those shares?

A:
If you are a participant in PDC's 401(k) and Profit Sharing Plan and have shares of PDC common stock credited to your plan account as of the record date, you have the right to direct the plan trustee how to vote those shares. The trustee will vote the shares in your plan account in accordance with your instructions. Your vote may not be counted if your proxy card is not received by the trustee by                    , 2019. You cannot vote such shares at the PDC special meeting or change your vote.

Q:
I hold shares of both PDC common stock and SRC common stock. Do I need to vote separately for each company?

A:
Yes. You will need to separately follow the applicable procedures described in this joint proxy statement/prospectus both with respect to the voting of shares of PDC common stock and with respect to the voting of shares of SRC common stock in order to effectively vote the shares of common stock you hold in each company.

Q:
If a holder of shares gives a proxy, how will the shares of PDC common stock or SRC common stock, as applicable, covered by the proxy be voted?

A:
If you provide a proxy, regardless of whether you provide that proxy by phone, the Internet or by completing and returning the applicable enclosed proxy card, the individuals named on the enclosed proxy card will vote your shares of PDC common stock or your shares of SRC common stock, as applicable, in the way that you indicate when providing your proxy in respect of the shares of common stock you hold in each of PDC and SRC. When completing the phone or Internet processes or the proxy card, you may specify whether your shares of PDC common stock or SRC common stock, as applicable, should be voted for or against, or abstain from voting on, all,

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Q:
How will my shares of common stock be voted if I return a blank proxy?

A:
PDC.    If you sign, date and return your proxy and do not indicate how you want your shares of PDC common stock to be voted, then your shares of PDC common stock will be voted "FOR" the adoption and approval of the PDC merger proposal and "FOR" the PDC issuance proposal, in accordance with the recommendation of the PDC board.
Q:
Can I change my vote after I have submitted my proxy?

A:
PDC.    Yes. If you are a stockholder of record of PDC common stock as of the close of business on the PDC record date, whether you vote by phone, the Internet or mail, you can change or revoke your proxy before it is voted at the PDC special meeting in one of the following ways:

submit a new proxy card bearing a later date;

vote again by phone or the Internet at a later time;

give written notice of your revocation to PDC's corporate secretary at 1775 Sherman Street, Suite 3000, Denver, CO 80203 stating that you are revoking your proxy; or

vote in person at the PDC special meeting. Please note that your attendance at the PDC special meeting will not alone serve to revoke your proxy.
Q:
Where can I find the voting results of the special meetings?

A:
Within four business days following certification of the final voting results, PDC and SRC each intend to file the final voting results of its special meeting with the SEC in a Current Report on Form 8-K.

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Q:
If I do not favor the merger as a PDC stockholder or SRC shareholder, what are my rights?

A:
Under Delaware law, PDC stockholders are not entitled to appraisal rights in connection with the merger or the issuance of shares of PDC common stock as contemplated by the merger agreement.
Q:
Are there any risks that I should consider as a PDC stockholder and/or SRC shareholder in deciding how to vote?

A:
Yes. You should read and carefully consider the risk factors set forth in the section entitled "Risk Factors" beginning on page 40. You also should read and carefully consider the risk factors of PDC and SRC contained in the documents that are incorporated by reference in this joint proxy statement/prospectus.

Q:
What happens if I sell my shares before the special meetings?

A:
PDC stockholders.    The record date for PDC stockholders entitled to vote at the PDC special meeting is earlier than the date of the PDC special meeting. If you transfer your shares of PDC common stock after the PDC record date but before the PDC special meeting, you will, unless special arrangements are made, retain your right to vote at the PDC special meeting.
Q:
What are the material U.S. federal income tax consequences of the merger to SRC shareholders?

A:
SRC and PDC intend for the merger to qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (which we refer to as the "Code"). It is a condition to each party's obligation to complete the merger that each of PDC and SRC receive an opinion of its respective outside counsel to the effect that the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. Accordingly, it is expected that U.S. holders (as defined in the section entitled "Material U.S. Federal Income Tax Consequences of the Merger") of shares of SRC common stock generally will not recognize any gain or loss for U.S. federal income tax purposes upon receipt of PDC common stock in exchange for SRC common stock in the merger (other than gain or loss, if any, with respect to any cash received in lieu of a fractional share of PDC common stock).

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Q:
When is the merger expected to be completed?

A:
PDC and SRC are working to complete the merger as quickly as possible. Subject to the satisfaction or waiver of the conditions described in the section entitled "The Merger Agreement—Conditions to the Completion of the Merger" beginning on page 154, including the approval of the SRC merger proposal by SRC shareholders at the SRC special meeting and the approval of the PDC merger proposal and the PDC issuance proposal by PDC stockholders at the PDC special meeting, the transaction is expected to be completed in the fourth quarter of 2019. However, neither PDC nor SRC can predict the actual date on which the merger will be completed, nor can the parties assure that the merger will be completed, because completion is subject to conditions beyond either PDC's or SRC's control.

Q:
If I am an SRC shareholder, how will I receive the merger consideration to which I am entitled?

A:
If you are a holder of certificates that represent eligible shares of SRC common stock (which we refer to as "SRC common stock certificates"), a notice advising you of the effectiveness of the merger and a letter of transmittal and instructions for the surrender of your SRC common stock certificates will be mailed to you as soon as practicable after the effective time of the merger. After receiving proper documentation from you, the exchange agent will send to you (i) a statement reflecting the aggregate whole number of shares of PDC common stock (which will be in uncertificated book-entry form) that you have a right to receive pursuant to the merger agreement and (ii) a check in the amount equal to the cash payable in lieu of any fractional shares of PDC common stock and dividends and other distributions on the shares of PDC common stock issuable to you as merger consideration.

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Q:
If I am a holder of SRC common stock certificates, do I need to send in my stock certificates at this time to receive the merger consideration?

A:
No. Please DO NOT send your SRC common stock certificates with your proxy card. You should carefully review and follow the instructions set forth in the letter of transmittal, which will be mailed to you, regarding the surrender of your stock certificates.

Q:
If I am an SRC shareholder, will the shares of PDC common stock issued in the merger receive a dividend?

A:
After the completion of the merger, the shares of PDC common stock issued in connection with the merger will carry with them the right to receive the same dividends on shares of PDC common stock as the shares of PDC common stock held by all other holders of such shares for any dividend the record date for which occurs after the merger is completed.

Q:
Who will solicit and pay the cost of soliciting proxies?

A:
Both PDC and SRC have retained MacKenzie Partners, Inc. (which we refer to as "MacKenzie Partners") to assist in the solicitation process.
Q:
What is "householding"?

A:
To reduce the expense of delivering duplicate proxy materials to shareholders who may have more than one account holding a corporation's common stock but who share the same address, a corporation may adopt a procedure approved by the SEC called "householding." Under this procedure, certain stockholders of record or shareholders of record, as applicable, who have the same address and last name will receive only one copy of proxy materials until such time as one or more of these shareholders notifies such corporation that they want to receive separate copies. Neither PDC nor SRC has elected to institute householding in connection with the PDC special meeting or SRC special meeting.

Q:
What should I do now?

A:
You should read this joint proxy statement/prospectus carefully and in its entirety, including the annexes, and return your completed, signed and dated proxy card by mail in the enclosed postage-paid envelope or submit your voting instructions by phone or the Internet as soon as possible so that your shares of PDC common stock and/or SRC common stock will be voted in accordance with your instructions.

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Q:
Who can answer my questions about the PDC special meeting and/or SRC special meeting or the transactions contemplated by the merger agreement?

A:
If you have questions about the PDC special meeting or SRC special meeting or the information contained in this joint proxy statement/prospectus, or desire additional copies of this joint proxy statement/prospectus or additional proxies, contact PDC's and SRC's proxy solicitor:

LOGO

1407 Broadway, 27th Floor
New York, New York 10018
PDC@mackenziepartners.com
Call Collect: (212) 929-5500
Toll-Free: (800) 322-2885

Q:
Where can I find more information about PDC, SRC and the merger?

A:
You can find out more information about PDC, SRC and the merger by reading this joint proxy statement/prospectus and, with respect to PDC and SRC, from various sources described in the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.

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SUMMARY

        This summary highlights selected information included in this joint proxy statement/prospectus and does not contain all of the information that may be important to you. You should read this joint proxy statement/prospectus and its annexes carefully and in their entirety and the other documents to which PDC and SRC refer before you decide how to vote with respect to the proposals to be considered and voted on at the PDC special meeting or SRC special meeting. In addition, PDC and SRC incorporate by reference important business and financial information about PDC and SRC into this joint proxy statement/prospectus, as further described in the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions in the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively. Each item in this summary includes a page reference directing you to a more complete description of that item in this joint proxy statement/prospectus.

Information About the Companies (page 55)

PDC Energy, Inc.

1775 Sherman Street
Suite 3000
Denver, CO 80203
Phone: (303) 860-5800

        PDC Energy, Inc. is a domestic independent exploration and production company that acquires, explores and develops properties for the production of crude oil, natural gas and NGLs, with operations in the Wattenberg Field in Colorado and the Delaware Basin in Texas. PDC's operations in the Wattenberg Field are focused in the horizontal Niobrara and Codell plays and its Delaware Basin operations are primarily focused in the Wolfcamp zones.

SRC Energy Inc.

1675 Broadway
Suite 2600
Denver, CO 80202
Phone: (720) 616-4300

        SRC is an independent oil and gas company engaged in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the DJ Basin in Colorado. The DJ Basin contains hydrocarbon-bearing deposits in several formations, including the Niobrara, Codell, Greenhorn, Shannon, Sussex, J-Sand, and D-Sand. The area has produced oil and natural gas for over fifty years and benefits from established infrastructure, long reserve life, and multiple service providers. SRC's oil and natural gas activities are focused in the Wattenberg Field, in Weld County, Colorado, an area that covers the western flank of the DJ Basin. Currently, SRC is focused on the horizontal development of the Codell formation as well as the three benches of the Niobrara formation, which are all characterized by relatively high liquids content.

The Merger and the Merger Agreement (page 121)

        The terms and conditions of the merger are contained in the merger agreement, which is attached to this document as Annex A and is incorporated by reference herein in its entirety. PDC and SRC encourage you to read the merger agreement carefully and in its entirety, as it is the legal document that governs the merger.

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        The PDC board of directors and the SRC board of directors each has unanimously approved and adopted the merger agreement and the transactions contemplated by the merger agreement. Pursuant to the terms and subject to the conditions included in the merger agreement, PDC has agreed to acquire SRC by means of a merger of SRC with and into PDC, with PDC surviving the merger.

Merger Consideration (page 122)

        As a result of the merger, each eligible share of SRC common stock (other than shares held in treasury by SRC or shares owned by PDC and, in each case, not held on behalf of third parties (which we refer to collectively as the "cancelled shares")) issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.158 of a share of PDC common stock, with cash in lieu of any fractional shares (which we refer to as the "merger consideration").

        SRC shareholders will not be entitled to receive any fractional shares of PDC common stock in the merger, and no SRC shareholders will be entitled to dividends, voting rights or any other rights in respect of any fractional shares of PDC common stock. Each holder of shares of SRC common stock exchanged pursuant to the merger who would otherwise have been entitled to receive a fraction of a share of PDC common stock (after taking into account all certificates and book-entry shares delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount equal to the product of (i) such fractional part of a share of PDC common stock multiplied by (ii) the volume weighted average price of PDC common stock for the five consecutive trading days ending on the date that is two business days prior to the closing date as reported by Bloomberg L.P.

Risk Factors (page 40)

        The merger and an investment in PDC common stock involve risks, some of which are related to the transactions contemplated by the merger agreement. You should carefully consider the information about these risks set forth under the section entitled "Risk Factors" beginning on page 40, together with the other information included or incorporated by reference in this joint proxy statement/prospectus, particularly the risk factors contained in PDC's and SRC's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings they make with the SEC. SRC shareholders should carefully consider the risks set out in that section before deciding how to vote with respect to the SRC merger proposal and non-binding compensation proposal to be considered and voted on at the SRC special meeting, and PDC stockholders should carefully consider the risks set out in that section before deciding how to vote with respect to the PDC merger proposal and the PDC issuance proposal to be considered and voted on at the PDC special meeting. For additional information, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.

Treatment of SRC Equity Awards (page 123)

SRC RSU Awards

        Immediately prior to the effective time of the merger, each then outstanding RSU award in respect of shares of SRC common stock, whether vested or unvested, will become fully vested and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award as of immediately prior to the effective time of the merger (less required tax withholdings).

SRC PSU Awards

        Except for the New PSU awards, immediately prior to the effective time of the merger, each then outstanding Current PSU award in respect of shares of SRC common stock, whether vested or

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unvested, will become automatically vested at the target (i.e., 100%) level and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award at target (less required tax withholdings).

New SRC PSU Awards

        In addition, SRC will grant New PSU awards in respect of shares of SRC common stock at the times, to the individuals and on the terms and in the amounts specified in the merger agreement. Immediately prior to the effective time of the merger, each then outstanding New PSU award will be assumed or substituted by PDC and converted automatically into a performance stock unit award of PDC, subject to the same terms and conditions as were applicable to the New PSU awards immediately prior to the effective time of the merger. The number of shares of PDC common stock covered by such assumed awards will be based on the number of SRC shares covered by such awards multiplied by the exchange ratio in the merger.

SRC Options

        Immediately prior to the effective time of the merger, each then outstanding option to purchase shares of SRC common stock will, whether vested or unvested, become fully vested, and each such option that is "in the money" relative to the per-share value of the merger consideration as determined pursuant to the merger agreement will be cancelled and converted into the right to receive the merger consideration with respect to a number of shares of SRC common stock based on the exercise price of the option relative to the per-share value of the merger consideration as determined pursuant to the merger agreement (less required tax withholdings). Immediately prior to the effective time of the merger, each then outstanding option to purchase shares of SRC common stock that is "out of the money" relative to the per-share value of the merger consideration as determined pursuant to the merger agreement will be cancelled in exchange for no consideration.

SRC Stock Bonus Awards

        Immediately prior to the effective time of the merger, each then outstanding Stock Bonus award, whether vested or unvested, will become fully vested and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award (less required tax withholdings).

Recommendation of the PDC Board of Directors and PDC's Reasons for the Merger (page 75)

        The PDC board unanimously recommends that you vote "FOR" the PDC merger proposal and "FOR" the PDC issuance proposal. For the factors considered by the PDC board in reaching this decision and additional information on the recommendation of the PDC board, see the section entitled "The Merger—Recommendation of the PDC Board of Directors and PDC's Reasons for the Merger" beginning on page 75.

Recommendation of the SRC Board of Directors and SRC's Reasons for the Merger (page 87)

        The SRC board unanimously recommends that you vote "FOR" the SRC merger proposal and "FOR" the non-binding compensation proposal. For the factors considered by the SRC board in reaching this decision and additional information on the recommendation of the SRC board, see the section entitled "The Merger—Recommendation of the SRC Board of Directors and SRC's Reasons for the Merger" beginning on page 87.

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Opinions of Financial Advisors (page 79)

Opinion of J.P. Morgan, PDC's financial advisor

        PDC retained J.P. Morgan Securities LLC ("J.P. Morgan") as its financial advisor in connection with the proposed merger.

        At the meeting of the PDC Board of Directors on August 25, 2019, J.P. Morgan rendered its oral opinion to the PDC Board of Directors that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in the opinion, the exchange ratio applicable to the conversion of each outstanding share of SRC common stock into PDC common stock in the proposed merger was fair, from a financial point of view, to PDC. J.P. Morgan confirmed its August 25, 2019, oral opinion by delivering its written opinion, dated August 25, 2019, to the PDC Board of Directors that, as of such date, the exchange ratio in the proposed merger was fair, from a financial point of view, to PDC.

        The full text of the written opinion of J.P. Morgan, dated August 25, 2019, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. The summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. PDC's stockholders are urged to read the opinion in its entirety. J.P. Morgan's opinion was addressed to the PDC board of directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the exchange ratio in the proposed merger and did not address any other aspect of the proposed merger. J.P. Morgan expressed no opinion as to the fairness of any consideration to be paid in connection with the proposed merger to the holders of any class of securities, creditors or other constituencies of PDC or as to the underlying decision by PDC to engage in the proposed merger. The issuance of J.P. Morgan's opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any stockholder of PDC as to how such stockholder should vote with respect to the proposed merger or any other matter. For a description of the opinion that the PDC board of directors received from J.P. Morgan, see the section entitled "The Merger—Opinion of J.P. Morgan, PDC's Financial Advisor" beginning on page 79.

Opinions of Citi and Goldman Sachs, SRC's financial advisors

Opinion of Citi

        The SRC board retained Citigroup Global Markets Inc. (which we refer to as "Citi") as financial advisor to SRC in connection with the merger. In connection with the engagement of Citi, the SRC board requested that Citi evaluate the fairness, from a financial point of view, to holders (other than PDC and its affiliates) of SRC common stock of the exchange ratio provided for in the merger agreement. On August 25, 2019, at a meeting of the SRC board at which the merger was approved, Citi rendered to the SRC board an oral opinion, subsequently confirmed by delivery of a written opinion dated August 25, 2019, to the effect that, as of the date of its opinion and based on and subject to the matters described in its opinion, the exchange ratio was fair, from a financial point of view, to holders (other than PDC and its affiliates) of SRC common stock.

        The full text of Citi's written opinion, dated August 25, 2019, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, is attached to this joint proxy statement/prospectus as Annex C and is incorporated into this joint proxy statement/prospectus by reference. The description of Citi's opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Citi's opinion. Citi's opinion was addressed to, and provided for the information of the SRC board (in its

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capacity as such) in connection with its evaluation of the exchange ratio from a financial point of view and did not address any other terms, aspects or implications of the merger. Citi expressed no view as to, and its opinion did not address, the underlying business decision of SRC to effect or enter into the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for SRC or the effect of any other transaction in which SRC might engage or consider. Citi's opinion is not intended to be and does not constitute a recommendation to any securityholder as to how such securityholder should vote or act on any matters relating to the merger or otherwise. For a description of the opinion that the SRC board received from Citi, see "The Merger—Opinions of Citi and Goldman Sachs, SRC's Financial Advisors" and Annex C.

Opinion of Goldman Sachs

        Goldman Sachs & Co. LLC (which we refer to as "Goldman Sachs") delivered its opinion to the SRC board that, as of August 25, 2019 and based upon and subject to the factors and assumptions set forth therein, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to the holders (other than PDC and its affiliates) of shares of SRC common stock.

        The full text of the written opinion of Goldman Sachs, dated August 25, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex D. Goldman Sachs provided its opinion for the information and assistance of the SRC board in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any holder of shares of SRC common stock should vote with respect to the merger or any other matter. For a description of the opinion that the SRC board received from Goldman Sachs, see "The Merger—Opinions of Citi and Goldman Sachs, SRC's Financial Advisors" and Annex D.

Special Meeting of PDC Stockholders (page 56)

Date, Time, Place and Purpose of the PDC Special Meeting

        The PDC special meeting will be held on                        , 2019, at            , Mountain Time, at            . The purpose of the PDC special meeting is to consider and vote on the PDC merger proposal and the PDC issuance proposal. Adoption and approval of the PDC merger proposal and the PDC issuance proposal by PDC stockholders is a condition to the obligation of PDC and SRC to complete the merger.

Record Date and Outstanding Shares of PDC Common Stock

        Only stockholders of record of issued and outstanding shares of PDC common stock as of the close of business on                        , 2019 (which we refer to as the "PDC record date") are entitled to notice of, and to vote at, the PDC special meeting or any subsequent reconvening of the PDC special meeting following any adjournments and postponements of the PDC special meeting.

        As of the close of business on the PDC record date, there were                shares of PDC common stock issued and outstanding and entitled to vote at the PDC special meeting. You may cast one vote for each share of PDC common stock that you held as of the close of business on the PDC record date.

        A complete list of PDC stockholders entitled to vote at the PDC special meeting will be available for inspection at PDC's principal office at 1775 Sherman Street, Suite 3000, Denver, CO 80203 during regular business hours for a period of no less than 10 days before the PDC special meeting and during the PDC special meeting at            .

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Quorum; Abstentions and Broker Non-Votes

        A quorum of PDC stockholders is necessary for PDC to hold a valid meeting. The presence at the PDC special meeting, in person or by proxy, of the holders of a majority of the outstanding shares of PDC common stock entitled to vote at the PDC special meeting constitutes a quorum.

        If you submit a properly executed proxy card, even if you do not vote for the proposal or vote to "abstain" in respect of the proposal, your shares of PDC common stock will be counted for purposes of determining whether a quorum is present for the transaction of business at the PDC special meeting. Broker non-votes will not be considered present and entitled to vote at the PDC special meeting for the purpose of determining the presence of a quorum.

        Executed but unvoted proxies will be voted in accordance with the recommendation of the PDC board.

Required Vote to Adopt and Approve the PDC Merger Proposal and the PDC Issuance Proposal

        Adoption and approval of the PDC merger proposal requires the affirmative vote of the holders of a majority of the outstanding PDC common stock, and approval of the PDC issuance proposal requires the affirmative vote of a majority of votes cast by PDC stockholders present in person or by proxy at the PDC special meeting and entitled to vote on such proposal. Abstentions will have the same effect as votes "AGAINST" each proposal. Broker non-votes and failures to vote will have the same effect as votes "AGAINST" the PDC merger proposal but will not have any effect on the outcome of the vote on the PDC issuance proposal.

        The PDC merger proposal and the PDC issuance proposal are described in the section entitled "PDC Proposals" beginning on page 61.

Voting by PDC Directors and Executive Officers

        As of the PDC record date, PDC directors and executive officers, and their affiliates, as a group, owned and were entitled to vote             shares of PDC common stock, or approximately        % of the total outstanding shares of PDC common stock as of the PDC record date.

        PDC currently expects that all of its directors and executive officers will vote their shares "FOR" the PDC merger proposal and the PDC issuance proposal.

Adjournment

        If a quorum is not present or if there are not sufficient votes for the approval of the PDC merger proposal and the PDC issuance proposal, PDC expects that the PDC special meeting will be adjourned by the chairman of the PDC special meeting to solicit additional proxies. At any subsequent reconvening of the PDC special meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the PDC special meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent meeting.

Special Meeting of SRC Shareholders (page 62)

Date, Time, Place and Purpose of the SRC Special Meeting

        The SRC special meeting will be held on                        , 2019, at            , Mountain Time, at            . The purpose of the SRC special meeting is to consider and vote on the SRC merger proposal and the non-binding compensation proposal. Approval of the SRC merger proposal is a condition to the obligation of SRC and PDC to complete the merger. Approval of the non-binding compensation proposal is not a condition to the obligation of either SRC or PDC to complete the merger.

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Record Date and Outstanding Shares of SRC Common Stock

        Only shareholders of record of issued and outstanding shares of SRC common stock as of the close of business on                        , 2019 (which we refer to as the "SRC record date") are entitled to notice of, and to vote at, the SRC special meeting or any subsequent reconvening of the SRC special meeting following or any subsequent reconvening of the SRC special meeting following any adjournments and postponements of the SRC special meeting.

        As of the close of business on the SRC record date, there were            shares of SRC common stock issued and outstanding and entitled to vote at the SRC special meeting. You may cast one vote for each share of SRC common stock that you held as of the close of business on the SRC record date.

        A complete list of SRC shareholders entitled to vote at the SRC special meeting will be available for inspection at SRC's principal office at 1675 Broadway, Suite 2600, Denver, CO 80202 during regular business hours for a period of no less than 10 days before the SRC special meeting and during the SRC special meeting at            .

Quorum; Abstentions and Broker Non-Votes

        A quorum of SRC shareholders is necessary for SRC to hold a valid meeting. The presence of the holders of one-third of the outstanding shares of SRC common stock entitled to vote at the special meeting, present in person or represented by proxy, constitutes a quorum.

        If you submit a properly executed proxy card, even if you do not vote for the proposal or vote to "abstain" in respect of the proposal, your shares of SRC common stock will be counted for purposes of determining whether a quorum is present for the transaction of business at the SRC special meeting. Broker non-votes will not be considered present and entitled to vote at the SRC special meeting for the purpose of determining the presence of a quorum.

        Executed but unvoted proxies will be voted in accordance with the recommendations of the SRC board.

Required Vote to Adopt and Approve the SRC Merger Proposal

        Adoption and approval of the SRC merger proposal requires the affirmative vote of a majority of the outstanding shares of SRC common stock entitled to vote on the proposal. Abstentions, broker non-votes and failures to vote will have the same effect as votes "AGAINST" the proposal.

        The SRC merger proposal is described in the section entitled "SRC Proposals" beginning on page 67.

Required Vote to Approve the Non-binding Compensation Proposal

        Approval of the non-binding compensation proposal requires that the votes cast in favor of the proposal exceed the votes cast against the proposal. Neither abstentions, broker non-votes nor failures to vote will have any effect on the outcome of the vote.

        The non-binding compensation proposal is described in the section entitled "SRC Proposals" beginning on page 67.

Voting by SRC Directors and Executive Officers

        As of the SRC record date, SRC directors and executive officers, and their affiliates, as a group, owned and were entitled to vote             shares of SRC common stock, or approximately        % of the total outstanding shares of SRC common stock as of the SRC record date.

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        SRC currently expects that all of its directors and executive officers will vote their shares "FOR" the SRC merger proposal and "FOR" the non-binding compensation proposal.

Adjournment

        If a quorum is not present or if there are not sufficient votes for the approval of the SRC merger proposal, SRC expects that the SRC special meeting will be adjourned by the chairman of the meeting to solicit additional proxies in accordance with the merger agreement. At any subsequent reconvening of the SRC special meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the SRC special meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent reconvening of the SRC special meeting.

Interests of PDC Directors and Executive Officers in the Merger (page 112)

        In considering the recommendation of the PDC board with respect to the PDC merger proposal and the PDC issuance proposal, PDC stockholders should be aware that the directors and executive officers of PDC have interests in the merger that may be different from, or in addition to, the interests of PDC stockholders generally. These interests are described in more detail in the section entitled "The Merger—Interests of PDC Directors and Executive Officers in the Merger" beginning on page 112. The members of the PDC board were aware of and considered these interests, among other matters, in evaluating and negotiating the merger agreement, in unanimously approving the merger agreement and in determining to recommend that PDC stockholders approve the PDC merger proposal and the PDC issuance proposal.

Board of Directors and Management of PDC Following Completion of the Merger (page 113)

        In connection with the merger, PDC and SRC have agreed that two members of the SRC board, to be mutually agreed by PDC and SRC (the "SRC Designees"), will be appointed to the PDC board simultaneously with the effectiveness of the merger. PDC and SRC expect the SRC Designees to be Lynn A. Peterson and Paul J. Korus, subject to final agreement among the companies after consideration of independence and other factors. The closing of the merger is not expected to result in other changes to the PDC board or executive management. PDC will continue to be headquartered in Denver, Colorado.

Interests of SRC Directors and Executive Officers in the Merger (page 113)

        In considering the recommendation of the SRC board with respect to the SRC merger proposal, SRC shareholders should be aware that the directors and executive officers of SRC have certain interests in the merger that may be different from, or in addition to, the interests of SRC shareholders generally. The members of the SRC board were aware of these interests and considered these interests, among other matters, in evaluating and negotiating the merger agreement, in unanimously approving the merger agreement and in determining to recommend that SRC shareholders approve the SRC merger proposal.

        These interests include:

    Immediately prior to the effective time of the merger, each then outstanding RSU award in respect of shares of SRC common stock, whether vested or unvested, will become fully vested and will be cancelled converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award as of immediately prior to the effective time of the merger (less required tax withholdings);

    Except for the New PSU awards, immediately prior to the effective time of the merger, each then outstanding Current PSU award in respect of shares of SRC common stock, whether vested

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      or unvested, will become automatically vested at the target (i.e., 100%) level and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award at target (less required tax withholdings);

    Immediately prior to the effective time of the merger, each then outstanding option to purchase shares of SRC common stock will, whether vested or unvested, become fully vested, and each such option that is "in the money" relative to the per-share value of the merger consideration as determined pursuant to the merger agreement will be cancelled and converted into the right to receive the merger consideration with respect to a number of shares of SRC common stock based on the exercise price of the option relative to the per-share value of the merger consideration as determined pursuant to the merger agreement (less required tax withholdings);

    Immediately prior to the effective time of the merger, each then outstanding Stock Bonus award, whether vested or unvested, will become fully vested and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award (less required tax withholdings);

    Prior to closing, SRC will grant New PSU awards in respect of shares of SRC common stock at the times, to the individuals and on the terms and in the amounts specified in the merger agreement. Immediately prior to the effective time of the merger, each then outstanding New PSU award will be assumed or substituted by PDC and converted automatically into a performance stock unit award of PDC, subject to the same terms and conditions as were applicable to the New PSU awards immediately prior to the effective time of the merger. The number of shares of PDC common stock covered by such assumed awards will be equal to the number of SRC shares covered by such awards multiplied by the exchange ratio in the merger;

    SRC may grant transaction bonuses (the "Transaction Bonuses") to SRC's executive officers and other employees, and to SRC's non-employee directors;

    Annual cash incentive awards for 2019 will be paid at target at the earlier of the effective time of the merger and the time that they are normally paid, and if the merger occurs after December 31, 2019, executive officers may be entitled to pro-rated annual bonuses for 2020;

    Mr. Peterson's employment agreement and severance compensation agreements with SRC's executive officers provide for enhanced severance payments and benefits upon a qualifying termination of employment in connection with the merger;

    Two members of the SRC board will be appointed to the PDC board immediately after the effective time of the merger and paid remuneration consistent with PDC's director remuneration. The remaining directors will be eligible for a transaction bonus not to exceed an aggregate $150,000.00; and

    SRC's directors and executive officers are entitled to continued indemnification and insurance coverage under the merger agreement.

        For a more complete description of these interests, see "The Merger—Interests of SRC Directors and Executive Officers in the Merger."

Conditions to the Completion of the Merger (page 154)

        Each party's obligation to complete the merger is subject to the satisfaction or waiver of the following mutual conditions:

    PDC Stockholder Approval.  The PDC merger proposal must have been approved by the holders of a majority of the outstanding shares of common stock of PDC and the PDC issuance

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      proposal must have been approved by the affirmative vote of a majority of PDC shares present in person or by proxy at the PDC special meeting and entitled to vote on the proposal.

    SRC Shareholder Approval.  The SRC merger proposal must have been approved by the affirmative vote of a majority of the outstanding shares of SRC common stock entitled to vote on the SRC merger proposal.

    Regulatory Approval.  Any waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (which we refer to as the "HSR Act") applicable to the merger and the other transactions contemplated by the merger agreement must have expired or been terminated.

    No Injunctions or Restraints.  No governmental entity of the United States or any state thereof having jurisdiction over PDC or SRC shall have issued any order, decree, ruling, injunction or other action that is in effect (whether temporary, preliminary or permanent) restraining, enjoining or otherwise prohibiting the consummation of the merger and no law that makes the consummation of the merger illegal or otherwise prohibited shall have been adopted after the date of the merger agreement.

    Effectiveness of the Registration Statement.  The registration statement, of which this joint proxy statement/prospectus forms a part, must have been declared effective by the SEC under the Securities Act and must not be the subject of any stop order or proceedings seeking a stop order.

    Nasdaq Listing.  The shares of PDC common stock issuable to SRC shareholders pursuant to the merger agreement must have been authorized for listing on Nasdaq, upon official notice of issuance.

        The obligations of PDC to complete the merger are subject to the satisfaction or waiver of further conditions, including:

    the accuracy of the representations and warranties of SRC contained in the merger agreement as of the date of the agreement and as of the closing date (other than representations that by their terms speak specifically as of another date or period of time), subject to the materiality standards provided in the merger agreement;

    SRC having performed and complied with in all material respects all of its obligations under the merger agreement required to be performed or complied with at or prior to the effective time of the merger;

    SRC having not experienced a "Company Material Adverse Effect" as defined in the merger agreement;

    PDC having received a certificate of SRC signed by an executive officer of SRC, dated as of the closing date, confirming that the conditions set forth in the three bullets directly above have been satisfied; and

    PDC having received an opinion of its outside counsel to the effect that the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

        The obligation of SRC to complete the merger is subject to the satisfaction or waiver of the following additional conditions:

    the accuracy of the representations and warranties of PDC contained in the merger agreement as of the date of the agreement and as of the closing date (other than representations that by their terms speak specifically as of another date or period of time), subject to the materiality standards provided in the merger agreement;

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    PDC having performed and complied with in all material respects all of its respective obligations under the merger agreement required to be performed or complied with by it at or prior to the effective time of the merger;

    PDC not having experienced at "Parent Material Adverse Effect" as that term is defined in the merger agreement;

    SRC having received a certificate of PDC signed by an executive officer of PDC, dated as of the closing date, confirming that the conditions in the three bullets directly above have been satisfied; and

    SRC having received an opinion of its outside counsel to the effect that the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code.

No Solicitation (page 135)

No Solicitation by PDC

        PDC has agreed that, from and after the date of the merger agreement, PDC will, and will cause its affiliates and subsidiaries, and its and their respective directors, officers and representatives to, immediately cease, and cause to be terminated, any solicitation, encouragement, discussion or negotiations that commenced prior to and were ongoing as of that date with respect to a PDC competing proposal (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals" beginning on page 141).

        PDC has also agreed that, from and after the date of the merger agreement until the effective time of the merger or the termination of the merger agreement, PDC will not, and will cause its affiliates and subsidiaries, and its and their respective directors, officers and representatives not to, and will not announce any intention to, directly or indirectly:

    initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals, or offers regarding, or the making of a PDC competing proposal;

    engage in any discussions or negotiations with any person with respect to a PDC competing proposal;

    furnish any non-public information regarding PDC or its subsidiaries, or access to the properties, assets or employees of PDC or its subsidiaries, to any person in connection with or in response to a PDC competing proposal;

    enter into any letter of intent or agreement in principle, or other agreement or commitment in respect of any proposal or offer that constitutes, or could reasonably be expected to lead to, a PDC competing proposal (other than a confidentiality agreement in accordance with the applicable terms of the merger agreement); or

    resolve, agree or publicly propose to, or permit PDC or any of its subsidiaries or any of its or their representatives to agree or publicly propose to take any of the actions referred to in the bullets directly above.

        Notwithstanding the agreements described above, prior to, but not after, the time the PDC merger proposal and the PDC issuance proposal have been approved by PDC stockholders, PDC may engage in the second and third bullets directly above with any person if PDC receives a bona fide written PDC competing proposal that did not arise from a breach of the obligations described directly above and in

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the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals" beginning on page 141; provided, however, that:

    no non-public information that is prohibited from being furnished pursuant to the foregoing obligations may be furnished until PDC receives an executed confidentiality agreement from the person making such PDC competing proposal; and

    prior to taking any such actions, the PDC board of directors determines in good faith, after consultation with PDC's financial advisor and outside legal counsel, that such PDC competing proposal is, or would reasonably be expected to lead to, a PDC superior proposal (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—PDC: No Solicitation Exceptions" beginning on page 138).

No Solicitation by SRC

        SRC has agreed that, from and after the date of the merger agreement, SRC will, and will cause its affiliates and subsidiaries, and its and their respective directors, officers and representatives to, immediately cease, and cause to be terminated, any solicitation, encouragement, discussion or negotiations that commenced prior to and were ongoing as of the date of the agreement with respect to an SRC competing proposal (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals" beginning on page 141).

        SRC has also agreed that, from and after the date of the merger agreement until the effective time of the merger or the termination of the merger agreement, SRC will not, and will cause its affiliates and subsidiaries, and its and their respective directors, officers and representatives not to, and will not announce any intention to, directly or indirectly:

    initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals, or offers regarding, or the making of an SRC competing proposal;

    engage in any discussions or negotiations with any person with respect to an SRC competing proposal;

    furnish any non-public information regarding SRC or its subsidiaries, or access to the properties, assets or employees of SRC or its subsidiaries, to any person in connection with or in response to an SRC competing proposal;

    enter into any letter of intent or agreement in principle, or other agreement or commitment in respect of any proposal or offer that constitutes, or could reasonably be expected to lead to, an SRC competing proposal (other than a confidentiality agreement in accordance with the applicable terms of the merger agreement); or

    resolve, agree or publicly propose to, or permit SRC or any of its subsidiaries or any of its or their representatives to agree or publicly propose to take any of the actions referred to in the bullets directly above.

        Notwithstanding the agreements described above, prior to, but not after, the time the SRC merger proposal has been approved by SRC shareholders, SRC may engage in the second and third bullets directly above with any person if SRC receives a bona fide written SRC competing proposal that did not arise from a breach of the obligations described directly above and in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—Definitions of Competing Proposals" beginning on page 141; provided, however, that:

    no non-public information that is prohibited from being furnished pursuant to the foregoing obligations may be furnished until SRC receives an executed confidentiality agreement from the person making such SRC competing proposal; and

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    prior to taking any such actions, the SRC board of directors determines in good faith, after consultation with its financial advisors and outside legal counsel, that such SRC competing proposal is, or would reasonably be expected to lead to, an SRC superior proposal (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—SRC: No Solicitation Exceptions" beginning on page 135).

Changes of Recommendation (page 136)

PDC Restrictions on Changes of Recommendation

        Subject to certain exceptions described below, the PDC board of directors may not effect a PDC recommendation change (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—PDC: Restrictions on Changes of Recommendation" beginning on page 139).

SRC Restrictions on Changes of Recommendation

        Subject to certain exceptions described below, the SRC board of directors may not effect an SRC recommendation change (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—SRC: Restrictions on Changes of Recommendation" beginning on page 136).

PDC: Permitted Changes of Recommendation and Permitted Termination to Enter into a PDC Superior Proposal

        Prior to, but not after, the time that the PDC merger proposal and the PDC issuance proposal have been approved by PDC stockholders, in response to a bona fide written PDC competing proposal from a third party that did not arise from a breach of the "no solicitation" obligations described above and in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—No Solicitation by PDC," the PDC board of directors may effect a PDC recommendation change or terminate the merger agreement if:

    the PDC board of directors determines in good faith, after consultation with PDC's financial advisor and outside legal counsel, that such PDC competing proposal is a PDC superior proposal (taking into account any adjustment in terms and conditions of the merger proposed by SRC in response to such PDC competing proposal) and that failure to take such action would be reasonably likely to be inconsistent with the fiduciary obligations owed by the PDC board of directors to the PDC stockholders under applicable law; and

    PDC provides SRC written notice of such proposed action and the basis of such proposed action five business days in advance and complies with certain obligations, each as described in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—PDC: Permitted Changes of Recommendation and Permitted Termination to Enter into a PDC Superior Proposal" beginning on page 140.

PDC: Permitted Changes of Recommendation in Connection with Intervening Events

        Prior to, but not after, the time that the PDC merger proposal and the PDC issuance proposal have been approved by PDC stockholders, if a PDC intervening event (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—PDC: Permitted Changes of Recommendation in Connection with Intervening Events" beginning on page 140) occurs or arises after the date of the merger agreement, PDC may effect a PDC recommendation change if:

    the PDC board of directors determines in good faith, after consultation with PDC's financial advisor and outside legal counsel, that the failure to take such action would be reasonably likely

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      to be inconsistent with the fiduciary obligations owed by the PDC board of directors to the PDC stockholders under applicable law; and

    PDC provides SRC written notice of such proposed action and the basis of such proposed action five business days in advance and complies with certain obligations, each as described in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation" beginning on page 135.

SRC: Permitted Changes of Recommendation and Permitted Termination to Enter into an SRC Superior Proposal

        Prior to, but not after, the SRC merger proposal has been approved by SRC shareholders, in response to a bona fide written SRC competing proposal from a third party that did not arise from a breach of the "no solicitation" obligations described above and in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—No Solicitation by SRC," the SRC board of directors may effect an SRC recommendation change or terminate the merger agreement if:

    the SRC board of directors determines in good faith, after consultation with its financial advisors and outside legal counsel, that such SRC competing proposal is an SRC superior proposal (taking into account adjustment in terms and conditions of the merger proposed by PDC in response to such SRC competing proposal) and that the failure to take such action would be reasonably likely to be inconsistent with the fiduciary obligations owed by the SRC board of directors to the SRC shareholders under applicable law; and

    SRC provides PDC written notice of such proposed action and the basis of such proposed action five business days in advance and complies with certain obligations, each as described in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—SRC: Permitted Changes of Recommendation and Permitted Termination to Enter into an SRC Superior Proposal" beginning on page 136.

SRC: Permitted Changes of Recommendation in Connection with Intervening Events

        Prior to, but not after, the time the SRC merger proposal has been approved by SRC shareholders, in response to an SRC intervening event (as defined in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—SRC: Permitted Changes of Recommendation in Connection with Intervening Events" beginning on page 137) that occurs or arises after the date of the merger agreement, SRC may effect an SRC recommendation change if:

    the SRC board of directors determines in good faith, after consultation with its financial advisors and outside legal counsel, that failure to take such action would be reasonably likely to be inconsistent with the fiduciary obligations owed by the SRC board of directors to the SRC shareholders under applicable law; and

    SRC provides PDC written notice of such proposed action and the basis of such proposed action five business days in advance and complies with certain obligations, each as described in the section entitled "The Merger Agreement—No Solicitation; Changes of Recommendation—SRC: Permitted Changes of Recommendation in Connection with Intervening Events" beginning on page 137.

Termination (page 157)

        PDC and SRC may terminate the merger agreement and abandon the merger at any time prior to the effective time of the merger by mutual written consent of PDC and SRC.

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        The merger agreement may also be terminated by either PDC or SRC at any time prior to the effective time of the merger in any of the following situations:

    if any governmental entity of the United States or any state thereof having jurisdiction over any party has issued any order, decree, ruling or injunction or taken any other action permanently restraining, enjoining or otherwise prohibiting the consummation of the merger and such order, decree, ruling or injunction or other action has become final and nonappealable, or if any law has been adopted that permanently makes the consummation of the merger illegal or otherwise permanently prohibited;

    upon an end date termination event (as defined in the section entitled "The Merger Agreement—Termination—Termination Rights" beginning on page 157);

    upon a PDC terminable breach event or SRC terminable breach event (as each term is defined in the section entitled "The Merger Agreement—Termination—Termination Rights" beginning on page 157); or

    upon an SRC shareholder approval termination event or a PDC stockholder approval termination event (as each term is defined in the section entitled "The Merger Agreement—Termination—Termination Rights" beginning on page 157).

        In addition, the merger agreement may be terminated by PDC:

    if prior to the time the SRC merger proposal has been approved by SRC shareholders, the SRC board of directors has effected an SRC recommendation change; or

    upon a PDC superior proposal termination event (as defined in the section entitled "The Merger Agreement—Termination—Termination Rights" beginning on page 157), subject to PDC's payment of the reverse termination fee (as defined in the section entitled "Summary—Expenses and Termination Fees" beginning on page 29).

        Further, the merger agreement may be terminated by SRC:

    if prior to the time the PDC merger proposal and the PDC issuance proposal have been approved by PDC stockholders, if the PDC board of directors has effected a PDC recommendation change; or

    upon an SRC superior proposal termination event (as defined in the section entitled "The Merger Agreement—Termination—Termination Rights" beginning on page 157), subject to SRC's payment of the termination fee (as defined in the section entitled "Summary—Expenses and Termination Fees" beginning on page 29).

Expenses and Termination Fees (page 158)

Termination Fees Payable by PDC

        The merger agreement requires PDC to pay SRC a termination fee of $55.0 million (which we refer to as the "reverse termination fee") if:

    SRC terminates the merger agreement due to a PDC recommendation change;

    PDC terminates the merger agreement due to a PDC superior proposal termination event;

    (i) PDC or SRC terminates the merger agreement due to a PDC stockholder approval termination event or an end date termination event or SRC terminates the merger agreement due to a PDC terminable breach event, (ii) on or before the date of any such termination a PDC competing proposal shall have been publicly announced or disclosed or otherwise communicated to the PDC board prior to the PDC stockholders meeting and (iii) within

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      12 months after the date of such termination, PDC enters into a definitive agreement with respect to a PDC competing proposal or consummates any transaction meeting the parameters of a PDC competing proposal. For purposes of this paragraph, any reference in the definition of PDC competing proposal to "20%" will be deemed to be a reference to "more than 60%."

        In no event will PDC be required to pay the reverse termination fee on more than one occasion.

Termination Fees Payable by SRC

        The merger agreement requires SRC to pay PDC a termination fee of $35.0 million (which we refer to as the "termination fee") if:

    PDC terminates the merger agreement due to an SRC recommendation change;

    SRC terminates the merger agreement due to an SRC superior proposal event;

    (i) (A) PDC or SRC terminates the merger agreement due to an SRC shareholder approval termination event or an end date termination event or (B) PDC terminates the merger agreement due to an SRC terminable breach event, (ii) on or before the date of any such termination an SRC competing proposal shall have been publicly announced or disclosed or otherwise communicated to the SRC board prior to the SRC shareholders meeting and (iii) within 12 months after the date of such termination, SRC enters into a definitive agreement with respect to an SRC competing proposal or consummates any transaction meeting the parameters of an SRC competing proposal. For purposes of this paragraph, any reference in the definition of SRC competing proposal to "20%" will be deemed to be a reference to "more than 60%."

        In no event will SRC be required to pay the termination fee on more than one occasion.

Expenses

        If the merger agreement is terminated because of a failure of SRC's shareholders or PDC's stockholders to adopt and approve the proposals required to complete the merger, SRC and PDC, as applicable, may be required to reimburse the other party for its actual transaction expenses in an amount not to exceed $10.0 million.

Appraisal Rights/Dissenters' Rights in the Merger (page 120)

        Appraisal rights, which are also sometimes known as dissenters' rights, are statutory rights that, if applicable under law, enable shareholders to dissent from an extraordinary transaction, such as a merger, and to demand that the corporation pay the fair value for their shares as determined immediately prior to the effective time of the merger) in cash, instead of receiving the consideration offered to shareholders in connection with the extraordinary transaction.

        Under Delaware law, PDC stockholders are not entitled to appraisal rights in connection with the issuance of shares of PDC common stock as contemplated by the merger agreement.

        Under Colorado law, SRC shareholders are not entitled to dissenters' rights in connection with the merger.

Material U.S. Federal Income Tax Consequences of the Merger (page 161)

        SRC and PDC intend for the merger to qualify as a "reorganization" within the meaning of Section 368(a) of the Code. It is a condition to each party's obligation to complete the merger that each of PDC and SRC receive an opinion of its respective outside counsel to the effect that the merger will qualify as a "reorganization" within the meaning of Section 368(a) of the Code. Provided the

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merger qualifies as a "reorganization" U.S. holders (as defined in the section entitled "Material U.S. Federal Income Tax Consequences of the Merger") of shares of SRC common stock generally will not recognize any gain or loss for U.S. federal income tax purposes upon receipt of PDC common stock in exchange for SRC common stock in the merger (other than gain or loss, if any, with respect to any cash received in lieu of a fractional share of PDC common stock). The material U.S. federal income tax consequences of the merger are discussed in more detail in the section entitled "Material U.S. Federal Income Tax Consequences of the Merger" beginning on page 161. The discussion of the material U.S. federal income tax consequences contained in this joint proxy statement/prospectus is intended to provide only a general discussion and is not a complete analysis or description of all potential U.S. federal income tax consequences of the merger that may vary with, or are dependent on, individual circumstances. In addition, it does not address the effects of any foreign, state or local tax laws or any U.S. federal tax laws other than U.S. federal income tax laws.

        TAX MATTERS ARE COMPLICATED AND THE TAX CONSEQUENCES OF THE MERGER WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES AS A RESULT OF THE MERGER TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.

Comparison of Rights of Stockholders of PDC and Shareholders of SRC (page 178)

        The rights of SRC shareholders who receive shares of PDC common stock in the merger will be governed by the certificate of incorporation of PDC (which we refer to as the "PDC certificate of incorporation" or the "PDC charter"), and the bylaws of PDC (which we refer to as the "PDC bylaws"), which are governed by Delaware law, rather than by the articles of incorporation of SRC (which we refer to as the "SRC articles of incorporation" or the "SRC charter"), and the bylaws of SRC (which we refer to as the "SRC bylaws"), which are governed by Colorado law. As a result, SRC shareholders will have different rights once they become PDC stockholders due to the differences in the organizational documents of SRC and PDC and the differences between Colorado and Delaware law. The key differences are described in the section entitled "Comparison of Rights of Stockholders of PDC and Shareholders of SRC" beginning on page 178.

Listing of PDC Shares; Delisting and Deregistration of SRC Shares (page 119)

        If the merger is completed, the shares of PDC common stock to be issued in the merger will be listed for trading on Nasdaq, shares of SRC common stock will be delisted from the NYSE American and deregistered under the Exchange Act, and SRC will no longer be required to file periodic reports with the SEC pursuant to the Exchange Act.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA OF PDC

        The following table sets forth PDC's selected consolidated historical financial and operating data that has been derived from its consolidated financial statements (1) as of and for the years ended December 31, 2018, 2017, 2016, 2015 and 2014 and (2) as of and for the six months ended June 30, 2019 and June 30, 2018. The information set forth below is only a summary and is not necessarily indicative of the results of future operations of PDC nor does it include the effects of the merger. You should read this financial information together with PDC's consolidated financial statements, the related notes and the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in its Annual Report on Form 10-K for the year ended December 31, 2018 filed on February 28, 2019, and Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2019 filed on May 2, 2019 and for the quarterly period ended June 30, 2019 filed on August 8, 2019, each of which is incorporated into this joint proxy statement/prospectus by reference.

        The selected statement of operations data for the years ended December 31, 2018, 2017 and 2016 and selected balance sheet data as of December 31, 2018 and 2017 have been derived from PDC's audited consolidated financial statements for such years, which have been incorporated by reference into this joint proxy statement/prospectus. The selected statement of operations data for the years ended December 31, 2015 and 2014 and selected balance sheet data as of December 31, 2016, 2015 and 2014 have been derived from PDC's audited consolidated financial statements for such years, which have not been included or incorporated by reference into this joint proxy statement/prospectus. The selected statement of operations data for the six months ended June 30, 2019 and 2018 and selected balance sheet data as of June 30, 2019 has been derived from PDC's unaudited consolidated financial statements as of June 30, 2019, which have been incorporated by reference into this joint proxy statement/prospectus. The selected balance sheet data as of June 30, 2018 has been derived from PDC's unaudited consolidated financial statements as of June 30, 2018, which have not been incorporated by reference into this joint proxy statement/prospectus. For additional information, see the

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sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.

 
  Six Months Ended/
As of June 30,
  Year Ended/As of December 31,  
 
  2019   2018   2018   2017   2016(1)   2015   2014(2)  
 
  (in millions, except per share data and as noted)
 

Statement of Operations (From Continuing Operations):

                                           

Crude oil, natural gas and NGLs sales

  $ 660.1   $ 631.2   $ 1,390.0   $ 913.1   $ 497.4   $ 378.7   $ 471.4  

Commodity price risk management gain (loss), net

    (142.7 )   (163.4 )   145.2     (3.9 )   (125.7 )   203.2     310.3  

Total revenues

    525.2     473.1     1,548.7     921.6     382.9     595.3     856.2  

Income (loss) from continuing operations

    (30.6 )   (188.6 )   2.0     (127.5 )   (245.9 )   (68.3 )   107.3  

Earnings per share from continuing operations:

                                           

Basic

  $ (0.78 ) $ (2.63 ) $ 0.03   $ (1.94 ) $ (5.01 ) $ (1.74 ) $ 3.00  

Diluted

    (0.78 )   (2.63 )   0.03     (1.94 )   (5.01 )   (1.74 )   2.93  

Statement of Cash Flows:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Net cash flows from:

                                           

Operating activities

  $ 442.2   $ 380.9   $ 889.3   $ 597.8   $ 486.3   $ 411.1   $ 236.7  

Investing activities

    (348.8 )   (574.1 )   (1,087.9 )   (717.0 )   (1,509.1 )   (604.3 )   (474.1 )

Financing activities

    (101.4 )   12.7     18.1     65.0     1,266.1     178.0     60.3  

Capital expenditures from development of crude oil and natural gas properties(3)

    (542.8 )   (432.6 )   (946.4 )   (737.2 )   (436.9 )   (599.5 )   (623.8 )

Acquisition of crude oil and natural gas properties

    (4.1 )   (181.1 )   (180.0 )   (15.6 )   (1,073.7 )        

Balance Sheet:

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total assets

  $ 4,594.9   $ 4,442.2   $ 4,544.1   $ 4,420.4   $ 4,485.8   $ 2,370.5   $ 2,331.1  

Working capital (deficit)

    (172.7 )   (391.0 )   (166.6 )   (16.4 )   129.2     30.7     89.5  

Total debt, net of unamortized discount and debt issuance costs

    1,197.7     1,179.1     1,194.9     1,151.9     1,044.0     642.4     655.5  

Total equity

    2,378.4     2,340.3     2,526.7     2,507.6     2,622.8     1,287.2     1,137.4  

Average Pricing and Production Expenses From Continuing Operations (per Boe and as a percent of sales for production taxes) :

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Sales price (excluding net settlements on derivatives)

  $ 27.92   $ 34.51   $ 34.61   $ 28.69   $ 22.43   $ 24.64   $ 50.72  

Lease operating expenses

    2.94     3.38     3.26     2.82     2.70     3.71     4.56  

Transportation, gathering and processing

    1.00     0.89     0.93     1.04     0.83     0.66     0.49  

Production taxes

    1.90     2.34     2.25     1.91     1.42     1.20     2.76  

Production taxes (as a percent of sales)           

    6.8 %   6.8 %   6.5 %   6.6 %   6.3 %   4.9 %   5.4 %

Production (MBoe):

   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Production from continuing operations           

    23,640     18,290     40,160     31,830     22,176     15,369     9,294  

Production from discontinued operations

                            1,093  

Total production

    23,640     18,290     40,160     31,830     22,176     15,369     10,387  

Total proved reserves (MMBoe)

    N/A     N/A     544.9     452.9     341.4     272.8     250.1  

(1)
In 2016, PDC closed an acquisition in the Delaware Basin for aggregate consideration of approximately $1.76 billion.

(2)
In 2014, PDC completed the sale of its ownership interest in PDC Mountaineer, LLC ("PDCM"). PDC's proportionate share of PDCM's Marcellus Shale results of operations have been separately reported as discontinued operations.

(3)
Includes impact of change in accounts payable related to capital expenditures.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA OF SRC

        The following table sets forth SRC's selected consolidated historical financial and operating data that has been derived from SRC's consolidated financial statements (1) as of and for the years ended December 31, 2018, 2017, and 2016; (2) as of and for the four months ended December 31, 2015; (3) as of and for the years ended August 31, 2015 and 2014; and (4) as of and for the six months ended June 30, 2019 and June 30, 2018. The information set forth below is only a summary and is not necessarily indicative of the results of future operations of SRC nor does it include the effects of the merger. You should read this financial information together with SRC's consolidated financial statements, the related notes and the sections entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in its Annual Report on Form 10-K for the year ended December 31, 2018 filed on February 20, 2019, and Quarterly Reports on Form 10-Q for the quarterly period ended March 31, 2019 filed on May 1, 2019 and for the quarterly period ended June 30, 2019 filed on July 31, 2019, each of which is incorporated into this joint proxy statement/prospectus by reference. The selected statement of operations data for the four months ended December 31, 2015 and the years ended August 31, 2015 and 2014, and selected balance sheet data as of December 31, 2016 and 2015 and August 31, 2015 and 2014 have been derived from SRC's audited consolidated financial statements for such years, which have not been incorporated into this joint proxy statement/prospectus by reference. The selected historical consolidated financial data for the six months ended June 30, 2019 and 2018 and as of June 30, 2019 have been derived from SRC's unaudited consolidated financial data included in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, which is incorporated into this joint proxy statement/prospectus by reference. The selected balance sheet data as of June 30, 2018 has been derived from SRC's unaudited consolidated financial statements as of June 30, 2018, which have not been incorporated by reference herein. For additional

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information, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.

 
  As of and for the
Six Months Ended
June 30,
  As of and for the Years Ended
December 31,
  As of and for
4-mo ended
December 31,
  As of and for
12-mo ended
August 31,
 
 
  2019   2018   2018   2017   2016   2015   2015   2014  

RESULTS OF OPERATIONS
(in thousands, except per share amounts)

                                                 

Revenues

  $ 352,057   $ 294,320   $ 645,641   $ 362,516   $ 107,149   $ 34,138   $ 124,843   $ 104,219  

Net income (loss)

  $ 104,219   $ 115,420   $ 260,022   $ 142,482   $ (219,189 ) $ (122,932 ) $ 18,042   $ 28,853  

Net income (loss) per common share:

                                                 

Basic

  $ 0.43   $ 0.48   $ 1.07   $ 0.69   $ (1.26 ) $ (1.14 ) $ 0.19   $ 0.38  

Diluted

  $ 0.43   $ 0.47   $ 1.07   $ 0.69   $ (1.26 ) $ (1.14 ) $ 0.19   $ 0.37  

CERTAIN BALANCE SHEET INFORMATION (in thousands)

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Total Assets

  $ 2,785,086   $ 2,282,546   $ 2,754,714   $ 2,079,564   $ 1,024,113   $ 672,616   $ 746,449   $ 448,542  

Working (Deficit) Capital

  $ (115,371 ) $ (86,737 ) $ (121,393 ) $ (42,272 ) $ (38,056 ) $ 24,922   $ 93,129   $ (35,338 )

Long-term Obligations

  $ 714,412   $ 564,260   $ 734,941   $ 538,359   $ 75,614   $ 78,000   $ 78,000   $ 37,000  

Total Liabilities

  $ 1,087,469   $ 848,421   $ 1,168,422   $ 771,130   $ 183,374   $ 166,106   $ 174,052   $ 167,052  

Equity

  $ 1,697,617   $ 1,434,125   $ 1,586,292   $ 1,308,434   $ 840,739   $ 506,510   $ 572,397   $ 281,490  

Certain Operating Statistics

   
 
   
 
   
 
   
 
   
 
   
 
   
 
   
 
 

Production:

                                                 

Oil (MBbls)

    5,408     3,887     8,392     5,824     2,257     742     1,970     941  

Natural Gas (MMcf)

    23,296     16,706     37,123     24,834     12,086     3,468     7,344     3,747  

NGLs (MBbls)

    2,165     1,750     3,869     2,518                  

MBOE

    11,455     8,422     18,448     12,481     4,271     1,320     3,194     1,566  

BOED

    63,288     46,528     50,543     34,194     11,670     10,822     8,750     4,290  

Average sales price per BOE(1)

  $ 29.97   $ 34.50   $ 34.50   $ 28.79   $ 25.09   $ 25.86   $ 39.09   $ 66.56  

LOE per BOE

  $ 2.67   $ 2.31   $ 2.35   $ 1.56   $ 4.67   $ 4.41   $ 4.70   $ 5.10  

DD&A(2) per BOE

  $ 10.38   $ 9.38   $ 9.74   $ 9.00   $ 10.93   $ 14.22   $ 20.62   $ 21.05  

(1)
Adjusted to include the effect of transportation and gathering expenses.

(2)
Depletion, Depreciation, & Accretion.

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

        The following summary unaudited pro forma condensed combined balance sheet data give effect to the proposed merger as if it had occurred on June 30, 2019, while the unaudited pro forma condensed combined statements of operations data for the year ended December 31, 2018 and the six months ended June 30, 2019 are presented as if the merger had occurred on January 1, 2018. The following summary unaudited pro forma condensed combined financial information has been prepared for illustrative purposes only, reflect merger-related pro forma adjustments, based on available information and certain assumptions that PDC believes are reasonable, and is not necessarily indicative of what the combined company's financial position or results of operations actually would have been had the merger occurred as of the dates indicated. In addition, the unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled "Risk Factors" beginning on page 40. The following summary unaudited pro forma condensed combined financial information should be read in conjunction with the section titled "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements" beginning on page 165 and the related notes.

(in thousands, except per share amounts)
  Six Months Ended
June 30, 2019
  Year Ended
December 31, 2018
 

Pro Forma Statement of Combined Operations Data:

             

Operating revenues

  $ 1,012,112   $ 2,035,602  

Net income

  $ 66,678   $ 269,239  

Earnings per share, basic

  $ 0.63   $ 2.55  

Earnings per share, diluted

  $ 0.63   $ 2.55  

 

(in thousands)
  As of June 30, 2019  

Pro Forma Combined Balance Sheet Data:

       

Cash and cash equivalents

  $ 29,313  

Total assets

  $ 6,781,028  

Long-term debt

  $ 1,912,057  

Stockholders' equity

  $ 3,589,711  

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SUMMARY PRO FORMA OIL, NATURAL GAS AND NGL RESERVE INFORMATION AND PRODUCTION DATA

        The following tables present the estimated pro forma combined net proved developed and undeveloped oil, natural gas and NGL reserves as of December 31, 2018, giving effect to the merger as if it had been completed on December 31, 2018. The pro forma production information set forth below gives effect to the merger as if it had been completed on January 1, 2018. The following summary pro forma oil, natural gas, and NGL reserve information and production data has been prepared for illustrative purposes only and is not intended to be a projection of future results of the combined company. Future results may vary significantly from the results reflected because of various factors, including those discussed in the section entitled "Risk Factors" beginning on page 40. The summary pro forma oil, natural gas, and NGL reserve information and production data should be read in conjunction with the section titled "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements" beginning on page 165 and the related notes included in this joint proxy statement/prospectus.

 
  As of December 31, 2018  
 
  PDC
Historical
  SRC
Historical
  PDC
Pro Forma
 

Proved developed reserves:

                   

Crude oil, condensate (MBbl)

    61,821     37,102     98,923  

Natural gas (MMcf)

    443,151     324,169     767,320  

NGLs (MBbl)

    43,856     36,427     80,283  

Total proved developed reserves (MBoe)

    179,535     127,557     307,092  

Proved undeveloped reserves:

                   

Crude oil, condensate (MBbl)

    128,528     50,910     179,438  

Natural gas (MMcf)

    892,538     447,698     1,340,236  

NGLs (MBbl)

    88,131     52,666     140,797  

Total proved undeveloped reserves (MBoe)

    365,418     178,192     543,610  

 

 
  Year Ended December 31, 2018  
 
  PDC
Historical
  SRC
Historical
  PDC
Pro Forma
 

Production:

                   

Crude oil (MBbl)

    16,963     8,392     25,355  

Natural gas (MMcf)

    88,017     37,123     125,140  

NGLs (MBbl)

    8,527     3,869     12,396  

Crude oil equivalent (MBoe)

    40,160     18,448     58,608  

 

 
  Six Months Ended June 30, 2019  
 
  PDC
Historical
  SRC
Historical
  PDC
Pro Forma
 

Production:

                   

Crude oil (MBbl)

    9,425     5,408     14,833  

Natural gas (MMcf)

    54,643     23,296     77,939  

NGLs (MBbl)

    5,108     2,165     7,273  

Crude oil equivalent (MBoe)

    23,640     11,455     35,095  

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COMPARATIVE HISTORICAL AND UNAUDITED PRO FORMA PER SHARE DATA

        The following table presents PDC's and SRC's historical and pro forma per share data for the year ended December 31, 2018 and as of and for the six months ended June 30, 2019. The pro forma per share data for the year ended December 31, 2018 and as of and for the six months ended June 30, 2019 are presented as if the merger had been completed on January 1, 2018. The information provided in the table below is unaudited.

        Historical per share data of PDC for the year ended December 31, 2018 and the six months ended June 30, 2019 was derived from PDC's historical financial statements for the respective periods. Historical per share data of SRC for the year ended December 31, 2018 and the six months ended June 30, 2019 was derived from SRC's historical financial statements for the respective periods. This information should be read together with the historical consolidated financial statements and related notes of PDC and SRC filed by each with the SEC, and that are incorporated into this joint proxy statement/prospectus by reference. For additional information, see the section entitled "Where You Can Find More Information" beginning on page 189.

        Unaudited pro forma combined per share data for the year ended December 31, 2018 and the six months ended June 30, 2019 was derived and should be read in conjunction with the unaudited pro forma condensed combined financial statements included in the section entitled "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements" beginning on page 165. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed as of the beginning of the period.

 
  Six Months Ended/
As of June 30,
2019
  Year Ended/As of
December 31,
2018
 

PDC

             

Net income (loss) per common share (basic)

  $ (0.78 ) $ 0.03  

Net income (loss) per common share (diluted)

  $ (0.78 ) $ 0.03  

Cash dividends declared per common share

  $   $  

Net book value per common share

  $ 37.44   $ 38.20  

SRC

   
 
   
 
 

Net income per common share (basic)

  $ 0.43   $ 1.07  

Net income per common share (diluted)

  $ 0.43   $ 1.07  

Cash dividends declared per common share

  $   $  

Net book value per common share

  $ 6.97   $ 6.54  

Pro Forma Combined (Unaudited)

   
 
   
 
 

Net income per common share (basic)

  $ 0.63   $ 2.55  

Net income per common share (diluted)

  $ 0.63   $ 2.55  

Cash dividends declared per common share

  $   $  

Net book value per common share

  $ 35.42        

Pro Forma Combined Equivalent Data (Unaudited)(1)

   
 
   
 
 

Net income per common share (basic)

  $ 0.10   $ 0.40  

Net income per common share (diluted)

  $ 0.10   $ 0.40  

Cash dividends declared per common share

  $   $  

Net book value per common share

  $ 5.60        

(1)
Determined using the pro forma combined per share data multiplied by 0.158 (the exchange ratio).

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DIVIDEND AND SHARE PRICE INFORMATION

Dividends

        Neither PDC nor SRC has historically paid cash dividends on shares of their common stock. Cash dividends are restricted under the terms of each of PDC's and SRC's debt agreements and applicable requirements of state law.

Comparison of PDC and SRC Market Prices and Implied Share Value of the Stock Consideration

        The following table sets forth the closing sale price per share of PDC common stock and SRC common stock as reported on Nasdaq and the NYSE American, respectively, on August 23, 2019, the last trading day prior to the public announcement of the merger, and on                        , 2019, the last practicable trading day prior to the mailing of this joint proxy statement/prospectus. The table also shows the estimated implied value of the merger consideration proposed for each share of SRC common stock as of the same two dates. This implied value was calculated by multiplying the closing price of a share of PDC common stock on the relevant date by the exchange ratio of 0.158 of a share of PDC common stock for each share of SRC common stock.

 
  PDC
Common Stock
  SRC
Common Stock
  Implied Per Share
Value of Merger
Consideration
 

August 23, 2019

  $ 25.25   $ 4.15   $ 3.99  

                  , 2019

  $     $     $    

        Holders of PDC common stock and SRC common stock are encouraged to obtain current market quotations for PDC common stock and SRC common stock and to review carefully the other information contained in this joint proxy statement/prospectus or incorporated by reference herein. No assurance can be given concerning the market price of PDC common stock before or after the effective date of the merger. For additional information, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.

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RISK FACTORS

        In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, including the matters addressed in the section entitled "Cautionary Statement Regarding Forward-Looking Statements" beginning on page 53, SRC shareholders should carefully consider the following risks before deciding how to vote with respect to the SRC merger proposal and the non-binding compensation proposal to be considered and voted on at the SRC special meeting, and PDC stockholders should carefully consider the following risks before deciding how to vote with respect to the PDC merger proposal and the PDC issuance proposal to be considered and voted on at the PDC special meeting. In addition, SRC shareholders and PDC stockholders should also read and consider the risks associated with each of the businesses of SRC and PDC because these risks will also affect the combined company. These risks can be found in PDC's and SRC's Annual Reports on Form 10-K for the year ended December 31, 2018, their subsequent reports on Form 10-Q and other documents they file with the SEC, in each case incorporated by reference into this joint proxy statement/prospectus. SRC shareholders and PDC stockholders should also read and consider the other information in this joint proxy statement/prospectus and the other documents incorporated by reference into this joint proxy statement/prospectus. For additional information, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.


Risk Factors Relating to the Merger

Because the exchange ratio is fixed and because the market price of PDC common stock will fluctuate, SRC shareholders cannot be certain of the precise value of the merger consideration they will receive in the merger.

        If the merger is completed, at the effective time of the merger, each issued and outstanding eligible share of SRC common stock will be converted into the right to receive the merger consideration. The exchange ratio for the merger consideration is fixed at 0.158 of a share of PDC common stock for each share of SRC common stock (with certain exceptions described in this joint proxy statement/prospectus), and there will be no adjustment to the merger consideration for changes in the market price of PDC common stock or SRC common stock prior to the completion of the merger.

        If the merger is completed, there will be lapses in time between the date of this joint proxy statement/ prospectus, the dates on which SRC shareholders vote to adopt and approve the SRC merger proposal and PDC stockholders vote to adopt and approve the PDC merger proposal and the PDC issuance proposal, and the date on which SRC shareholders entitled to receive the merger consideration actually receive the merger consideration. The market value of shares of PDC common stock will fluctuate, possibly materially, during and after these periods as a result of a variety of factors, including general market and economic conditions, changes in PDC's businesses, operations and prospects and regulatory considerations. Such factors are difficult to predict and in many cases are be beyond the control of PDC and SRC. The actual value of any merger consideration received by SRC shareholders at the completion of the merger will depend on the market value of the shares of PDC common stock at that time. Consequently, at the time SRC shareholders must decide whether to approve the SRC merger proposal, they will not know the actual market value of any merger consideration they will receive when the merger is completed. For additional information about the merger consideration, see the sections entitled "The Merger—Consideration to SRC Shareholders" and "The Merger Agreement—Effect of the Merger on Capital Stock; Merger Consideration" beginning on pages 68 and 122, respectively.

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The merger may not be completed and the merger agreement may be terminated in accordance with its terms. Failure to complete the merger could negatively impact the price of shares of PDC common stock and the price of shares of SRC common stock, as well as PDC's and SRC's respective future businesses and financial results.

        The merger is subject to a number of conditions, including the approval by PDC stockholders of the PDC merger proposal and the PDC issuance proposal and approval by SRC shareholders of the SRC merger proposal, that must be satisfied or waived prior to the completion of the merger. These conditions are described in the section entitled "The Merger Agreement—Conditions to the Completion of the Merger" beginning on page 154. These conditions to the completion of the merger, some of which are beyond the control of PDC and SRC, may not be satisfied or waived in a timely manner or at all, and, accordingly, the merger may be delayed or may not be completed.

        The merger agreement may be terminated by either PDC or SRC if the merger is not completed by February 25, 2020 or, at either party's discretion—if the only conditions to closing that have not been satisfied or waived by that date are those related to the termination or expiration of any waiting period under the HSR Act or the adoption of an antitrust law prohibiting the merger—to May 25, 2020, except that this right to terminate the merger agreement will not be available to any party whose violation or breach of any material covenant or agreement under the merger agreement is the primary cause of or resulted in the failure of the transactions to be consummated on or before that date. PDC and SRC can also mutually decide to terminate the merger agreement at any time, before or after SRC shareholders approve the SRC merger proposal and PDC stockholders approve the PDC merger proposal and the PDC issuance proposal. In addition, PDC and SRC may elect to terminate the merger agreement in certain other circumstances as further detailed in the section entitled "The Merger Agreement—Termination" beginning on page 157.

        If the transactions contemplated by the merger agreement are not completed for any reason, PDC's and SRC's respective ongoing businesses and financial results may be adversely affected and, without realizing any of the benefits of having completed the transactions, PDC and SRC will be subject to a number of risks, including the following:

        If the merger agreement is terminated and the SRC board seeks another merger or business combination, SRC may not be able to find a party willing to offer equivalent or more attractive consideration than the consideration PDC has agreed to provide in the merger, or that such other merger or business combination is completed. If the merger agreement is terminated under specified

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circumstances, PDC may be required to pay SRC a termination fee of $55.0 million, and SRC may be required to pay PDC a termination fee of $35.0 million. If the merger agreement is terminated because of a failure of SRC's shareholders or PDC's stockholders to adopt and approve the proposals required to complete the merger, SRC and PDC, as applicable, may be required to reimburse the other party for its actual transaction expenses in an amount not to exceed $10.0 million. For a description of these circumstances, see the section entitled "The Merger Agreement—Termination" beginning on page 157. In addition, any delay in completing the merger may significantly reduce the synergies and other benefits that PDC and SRC expect to achieve if they successfully complete the merger within the expected timeframe and integrate their respective businesses.

Current SRC shareholders and PDC stockholders will have a reduced ownership and voting interest in PDC after the merger compared to their current ownership in each of PDC and SRC and will exercise less influence over management.

        Currently, SRC shareholders have the right to vote in the election of the SRC board of directors and on other matters requiring shareholder approval under Colorado law and the SRC articles of incorporation and bylaws. PDC stockholders have the right to vote in the election of the PDC board of directors and on other matters requiring stockholder approval under Delaware law and the PDC certificate of incorporation and bylaws. Based on the number of issued and outstanding shares of PDC common stock and SRC common stock as of September 16, 2019, and the exchange ratio, immediately after the merger is completed, it is expected that, on a fully-diluted basis, current PDC stockholders will collectively own approximately 61%, and current SRC shareholders will collectively own approximately 39%, of the outstanding shares of PDC common stock (without giving effect to any shares of PDC common stock held by SRC shareholders prior to the merger). As a result of the merger, current SRC shareholders and current PDC stockholders will own a smaller percentage of the combined company than they currently own of SRC and PDC, respectively, and as a result will have less influence on the management and policies of PDC post-merger than they now have on the management and policies of SRC and PDC, respectively.

The merger is subject to the receipt of approvals, consents or clearances from regulatory authorities that may impose conditions that could have an adverse effect on PDC or SRC or, if not obtained, could prevent completion of the transactions.

        Completion of the merger is conditioned upon the receipt of certain governmental approvals. Although each party has agreed to use its respective reasonable best efforts to obtain the requisite governmental approvals, there can be no assurance that these approvals will be obtained and that the other conditions to completing the merger will be satisfied. In addition, the governmental authorities from which the regulatory approvals are required may impose conditions on the completion of the merger or require changes to the terms of the merger or other agreements to be entered into in connection with the merger agreement. Under the terms of the merger agreement, PDC has agreed to take any and all action necessary to obtain these governmental approvals; however, PDC does not have to agree to any action that would reasonably be expected to have a material adverse effect on the post-closing business, financial condition or operations of PDC and its subsidiaries (including SRC and its subsidiaries), taken as a whole. The actions that PDC may be required to take include, among others, disposing of assets, categories of assets or businesses, or holding assets, categories of assets or businesses separately, terminating existing relationships, contractual rights or obligations, terminating any venture or other arrangement, creating new relationships, contractual rights or obligations and making other changes or restructurings. These actions may adversely affect the business of PDC and the combined company. PDC and SRC cannot provide any assurance that these approvals will be obtained or that there will not be any adverse consequences to PDC's or SRC's business resulting from the failure to obtain these governmental approvals or from conditions that could be imposed in

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connection with obtaining these governmental approvals, including divestitures or other operating restrictions upon PDC or its subsidiaries.

        Completion of the merger is also conditioned upon the authorization for listing of PDC common stock to be issued in connection with the merger on Nasdaq. Although PDC has agreed take all action necessary to obtain the requisite stock exchange approval, there can be no assurance that such approval will be obtained and that the other conditions to completing the merger will be satisfied.

        Such conditions or changes and the process of obtaining regulatory approvals could have the effect of delaying or impeding consummation of the transaction or of imposing additional costs or limitations on the combined company following completion of the merger, any of which might have an adverse effect on the combined company and may diminish the anticipated benefits of the merger. For additional information about the regulatory approvals process, see "The Merger—Regulatory Approvals."

PDC and SRC will be subject to business uncertainties while the merger is pending, which could adversely affect their respective businesses.

        In connection with the pendency of the merger, it is possible that certain persons with whom PDC and SRC have a business relationship may delay or defer certain business decisions or might decide to seek to terminate, change or renegotiate their relationships with PDC or SRC, as the case may be, as a result of the merger, which could negatively affect PDC's or SRC's revenues, earnings and cash flows, as well as the market price of PDC's or SRC's respective common stock, regardless of whether the merger is completed.

        Under the terms of the merger agreement, each of PDC and SRC is subject to certain restrictions on the conduct of its business prior to the effective time, which may adversely affect its ability to execute certain of its business strategies. Such limitations could negatively affect PDC's or SRC's businesses and operations prior to the completion of the transactions. For a description of the restrictive covenants to which PDC and SRC are subject, see the section entitled "The Merger Agreement—Interim Operations of SRC and PDC Pending the Merger" beginning on page 131.

The merger agreement contains provisions that limit SRC's and PDC's ability to pursue alternatives to the merger, could discourage a potential competing acquiror of SRC or PDC from making a favorable alternative transaction proposal and, in specified circumstances, could require SRC or PDC to pay the other party a termination fee.

        The merger agreement contains certain provisions that restrict SRC's and PDC's ability to initiate, solicit or knowingly encourage or knowingly facilitate any inquiries, proposals, or offers regarding, or the making of a competing proposal, engage in any discussions or negotiations with respect to a competing proposal or furnish any non-public information or access to its assets to any person in connection with a competing proposal, or enter into any letter of intent or agreement in principle concerning a competing proposal. Further, even if the SRC board or the PDC board changes, withdraws, modifies, or qualifies its recommendation with respect to the relevant merger proposal or, in the case of PDC, the PDC issuance proposal, unless the merger agreement has been terminated in accordance with its terms, both parties will still be required to submit the merger proposal and the PDC issuance proposal, as applicable, to a vote at its special meeting. In addition, the other party generally has an opportunity to offer to modify the terms of the transactions contemplated by the merger agreement in response to any third-party alternative transaction proposal before a party's board of directors may change, withdraw, modify, or qualify its recommendation with respect to its merger proposal or the PDC issuance proposal, as applicable. In some circumstances, upon termination of the merger agreement, SRC or PDC will be required to pay a termination fee of $35.0 million or $55.0 million, respectively, to the other party.

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        These provisions could discourage a potential third-party acquiror or merger partner that might have an interest in acquiring all or a significant portion of SRC or PDC or pursuing an alternative transaction with either entity from considering or proposing such a transaction. In SRC's case, the provisions could discourage a potential third-party acquiror or merger partner that was prepared to pay consideration with a higher per share price than the per share price proposed to be received in the merger, or might result in a potential third-party acquiror or merger partner proposing to pay a lower per share price than it might otherwise have proposed to pay because of the added expense of the termination fee that is payable in certain circumstances.

        For additional information, see the sections entitled "The Merger Agreement—No Solicitation; Changes of Recommendation" and "The Merger Agreement—Termination."

Uncertainties associated with the merger may cause a loss of management personnel and other key employees, which could adversely affect the future business and operations of the combined company.

        Whether or not the merger is completed, the announcement and pendency of the merger could disrupt the businesses of PDC or SRC. PDC and SRC are dependent on the experience and industry knowledge of their senior management and other key employees to execute their business plans. PDC's success after the merger will depend in part upon the ability of PDC and SRC to retain key management personnel and other key employees in advance of the merger, and of the combined company's ability to do so following the merger. Current and prospective employees of PDC and SRC may experience uncertainty about their roles within the combined company following the merger, which may have an adverse effect on the current ability of each of PDC and SRC to attract or retain key management and other key personnel or the ability of the combined company to do so following the merger.

        No assurance can be given that the combined company will be able to attract or retain key management personnel and other key employees of PDC and SRC to the same extent that they have previously been able to attract or retain employees. In addition, following the merger, PDC might not be able to locate suitable replacements for any such key employees who leave PDC or SRC or offer employment to potential replacements on satisfactory terms.

Directors and executive officers of SRC may have interests in the merger that are different from, or in addition to, the interests of SRC's shareholders.

        SRC's directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of SRC shareholders generally. The SRC board was aware of and considered these interests, among other matters, during its deliberations on the merits of the merger and in deciding to approve the terms of the merger and to recommend that SRC shareholders vote for the approval of the merger agreement. These interests include, among others, the treatment of outstanding equity and equity-based awards pursuant to the merger agreement, the grant of certain performance-based equity awards prior to the merger, the potential payment of transaction bonuses, payment of annual cash bonuses upon closing of the merger, potential enhanced severance payments and other benefits upon a qualifying termination in connection with the merger, two SRC board directors to be added to the PDC board, and rights to ongoing indemnification and insurance coverage. These interests are described in more detail in the section entitled "The Merger—Interests of SRC Directors and Executive Officers in the Merger" beginning on page 113.

PDC and SRC will incur significant transaction and merger-related costs in connection with the merger, which may be in excess of those anticipated by PDC or SRC.

        Each of PDC and SRC has incurred and expects to continue to incur a number of non-recurring costs associated with the merger, many of which are payable regardless of whether or not the merger is

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completed. These fees and costs have been, and will continue to be, substantial. These costs include, among others, employee retention costs, fees paid to legal, accounting and financial advisors, severance and benefit costs, fees related to regulatory filings and notices, filing fees and printing and mailing fees. PDC and SRC will also incur transaction fees and costs related to the integration of SRC into PDC, which may be substantial. Moreover, each of PDC and SRC may incur additional unanticipated expenses in connection with the merger and the integration, including costs associated with any stockholder litigation related to the merger.

        The costs described above, as well as other unanticipated costs and expenses, could have an adverse effect on the financial condition and operating results of PDC, SRC or, following the completion of the merger, the combined company.

Completion of the merger may trigger change in control or other provisions in certain agreements to which SRC is a party.

        The completion of the transactions may trigger change in control or other provisions in certain agreements to which SRC is a party. For a description of the treatment of SRC's indebtedness in the merger, see "—PDC expects to assume substantial indebtedness in connection with the merger, which combined with PDC's current debt may limit its financial flexibility and adversely affect its financial results" and "The Merger—Treatment of Indebtedness" beginning on pages 45 and 119, respectively. If PDC and SRC are unable to negotiate waivers of the change in control and other provisions in certain other agreements, the counterparties to those agreements may exercise their rights and remedies under the agreements, potentially terminating the agreements or seeking monetary damages. Even if PDC and SRC are able to negotiate waivers, the counterparties may require a fee for such waivers or seek to renegotiate the agreements on terms less favorable to the combined company.

PDC expects to assume substantial indebtedness in connection with the merger, which combined with PDC's current debt may limit its financial flexibility and adversely affect its financial results.

        Under the merger agreement, PDC has agreed to assume SRC's outstanding debt, which as of August 31, 2019 was approximately $715 million and consisted of amounts outstanding under SRC's senior unsecured notes and its revolving credit facility. As of June 30, 2019, PDC had total long-term debt of approximately $1.2 billion, consisting of amounts outstanding under its senior unsecured notes and its revolving credit facility.

        PDC continues to review the treatment of SRC's existing indebtedness, and PDC may seek, or may be obligated, to repay, refinance, repurchase, redeem, exchange or otherwise terminate SRC's existing indebtedness prior to, in connection with or following the completion of the merger. In particular, PDC may be required to make a change of control offer to repurchase the SRC Notes (as defined in the section entitled "The Merger—Treatment of Indebtedness") from the holders of the SRC Notes at 101% of the principal amount of the SRC Notes, together with any accrued and unpaid interest to the date of purchase. If PDC does seek or is required to refinance SRC's existing indebtedness, there can be no guarantee that PDC would be able to execute the refinancing on favorable terms or at all, and any repayment of SRC's existing indebtedness would adversely affect PDC's liquidity. Assuming PDC does not repay, repurchase, redeem, exchange or otherwise terminate any of SRC's existing indebtedness, immediately following the completion of the merger, PDC is expected to have outstanding indebtedness of approximately $1.9 billion, based on PDC's outstanding indebtedness as of June 30, 2019 and the outstanding indebtedness of SRC as of August 31, 2019. Additionally, PDC is not restricted under the merger agreement from incurring additional debt, which PDC may do to fund its current operations, capital expenditures, planned or new acquisitions, or for any other purpose.

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        Any increase in PDC's indebtedness could have adverse effects on its financial condition and results of operations, including:

        A high level of indebtedness increases the risk that PDC may default on its debt obligations, including those it is assuming from SRC. PDC's ability to meet its debt obligations and to reduce its level of indebtedness depends on its future performance. PDC's future performance depends on many factors independent of the merger, some of which are beyond its control, such as general economic conditions and oil and natural gas prices. PDC may not be able to generate sufficient cash flows to pay the interest on its debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt.

Investigations regarding the merger could result in one or more lawsuits against the SRC board and/or SRC, and other lawsuits may be filed against SRC, PDC and/or their respective boards challenging the merger. An adverse ruling in any such lawsuit may prevent the merger from being completed.

        Following the public announcement of the merger, investigations were launched by several law firms generally regarding whether the SRC board failed to satisfy its duties to its shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for SRC shares of common stock. While no litigation has been filed to date, there is a possibility that one or more of these investigations could result in a lawsuit against SRC, PDC, and/or their respective boards. Any such lawsuit could seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the merger agreement already implemented and to otherwise enjoin the parties from consummating the merger, in addition to other fees and costs.

PDC and SRC may be targets of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the merger from being completed.

        Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger agreements. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on PDC's and SRC's respective liquidity and financial condition. Any such lawsuit could also seek, among other things, injunctive relief or other equitable relief, including a request to rescind parts of the merger agreement already implemented and to otherwise enjoin the parties from consummating the merger. If a plaintiff is successful in obtaining an injunction prohibiting completion of the merger, then that injunction may

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delay or prevent the merger from being completed, which may adversely affect PDC's and SRC's respective business, financial position and results of operation.

        One of the conditions to the closing of the merger is that no injunction by any court or other tribunal of competent jurisdiction has been entered and continues to be in effect and no law has been adopted or is effective, in either case that prohibits or makes illegal the closing of the merger. Consequently, if a lawsuit is filed and a plaintiff is successful in obtaining an injunction prohibiting completion of the merger, then that injunction may delay or prevent the merger from being completed within the expected timeframe or at all, which may adversely affect PDC's and SRC's respective business, financial position and results of operations.

After the merger is completed, SRC shareholders will become stockholders of a Delaware corporation and have their rights as stockholders governed by PDC's organizational documents and Delaware law.

        The rights of SRC shareholders are currently governed by SRC's organizational documents and Colorado law. Upon consummation of the merger, SRC shareholders will receive PDC common stock that will be governed by PDC's organizational documents and Delaware law. As a result, there will be differences between the rights currently enjoyed by SRC shareholders and the rights of SRC shareholders post-merger. For a detailed discussion of the differences between rights as shareholders of SRC and rights as a stockholder of PDC, see the section entitled "Comparison of Rights of Stockholders of PDC and Shareholders of SRC" beginning on page 178.

The opinions of PDC's and SRC's respective financial advisors will not reflect changes in circumstances between the signing of the merger agreement and the completion of the merger.

        PDC and SRC have received opinions from their respective financial advisors in connection with the signing of the merger agreement, but have not obtained updated opinions from those advisors as of the date of this joint proxy statement/prospectus. Changes in the operations and prospects of PDC or SRC, general market and economic conditions and other factors that may be beyond the control of PDC or SRC, and on which PDC's and SRC's financial advisors' opinions were based, may significantly alter the value of PDC or SRC or the prices of the shares of PDC common stock or of the shares of SRC common stock by the time the merger is completed. The opinions do not speak as of the time the merger will be completed or as of any date other than the date of such opinions. Because PDC and SRC do not currently anticipate asking their respective financial advisors to update their opinions, the opinions will not address the fairness of the merger consideration from a financial point of view at the time the merger is completed. The PDC board's recommendation that PDC stockholders vote "FOR" approval of the PDC merger proposal and the PDC issuance proposal, and the SRC board's recommendation that SRC shareholders vote "FOR" approval of the SRC merger proposal and the non-binding compensation advisory proposal, however, are made as of the date of this joint proxy statement/prospectus.

        For a description of the opinions that PDC and SRC received from their respective financial advisors, see the sections entitled "The Merger—Opinion of J.P. Morgan, PDC's Financial Advisor" beginning on page 79 and "The Merger—Opinions of Citi and Goldman Sachs, SRC's Financial Advisors" beginning on page 90. A copy of the opinion of J.P. Morgan, PDC's financial advisor, is attached as Annex B to this joint proxy statement/prospectus, and copies of the opinions of Citi and Goldman Sachs, SRC's financial advisors, are attached as Annex C and Annex D, respectively, to this joint proxy statement/prospectus, and each is incorporated by reference herein in its entirety.

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Risk Factors Relating to PDC Following the Merger

The integration of SRC into PDC may not be as successful as anticipated, and PDC may not achieve the intended benefits of the merger or do so within the intended timeframe.

        The merger involves numerous operational, strategic, financial, accounting, legal, tax and other risks, including potential liabilities associated with the acquired business. Difficulties in integrating SRC into PDC, and PDC's ability to manage the combined company, may result in the combined company performing differently than expected, in operational challenges or in the delay or failure to realize anticipated expense-related efficiencies, and could have an adverse effect on the financial condition, results of operations or cash flows of PDC. Potential difficulties that may be encountered in the integration process include, among other factors:

        Additionally, the success of the merger will depend, in part, on PDC's ability to realize the anticipated benefits and cost savings from combining PDC's and SRC's businesses, including operational and other synergies that PDC believes the combined company will achieve, discussed in more detail under the heading "The Merger—Recommendation of the PDC Board of Directors and PDC's Reasons for the Merger." The anticipated benefits and cost savings of the merger may not be realized fully or at all, may take longer to realize than expected or could have other adverse effects that PDC does not currently foresee.

PDC's results may suffer if it does not effectively manage its expanded operations following the merger.

        Following completion of the merger, the size of PDC's business will increase significantly. PDC's future success will depend, in part, on its ability to manage this expanded business, which poses numerous risks and uncertainties, including the need to integrate the operations and business of SRC into its existing business in an efficient and timely manner, to combine systems and management controls and to integrate relationships with various business partners. Failure to successfully manage the combined company may have an adverse effect on PDC's financial condition, results of operations or cash flows.

The unaudited pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company's financial condition or results of operations following the merger.

        The unaudited pro forma financial statements contained in this joint proxy statement/prospectus are presented for illustrative purposes only and may not be an indication of the combined company's

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financial condition or results of operations following the merger. The actual financial positions and results of operations of the combined company following the merger may be different, possibly materially, from the unaudited pro forma financial statements included in this joint proxy statement/prospectus for several reasons. The unaudited pro forma financial statements have been derived from the historical financial statements of PDC and SRC and certain adjustments and assumptions have been made regarding the combined company after giving effect to the merger. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with complete accuracy. Moreover, the unaudited pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the merger. For example, the impact of any incremental costs incurred in integrating SRC into PDC is not reflected in the unaudited pro forma financial statements. Additionally, the unaudited pro forma financial statements do not reflect the effect of any potential divestitures that may occur prior to or subsequent to the completion of the merger. Other factors may affect the combined company's financial conditions or results of operations following the merger as well. As a result, the actual financial condition and results of operations of the combined company following the merger may not be consistent with, or evident from, these unaudited pro forma financial statements. Any potential decline in the combined company's financial condition or results of operations may cause significant variations in the stock price of PDC's common stock following the merger. For additional information, see the section entitled "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements" beginning on page 165.

Sales of substantial amounts of PDC common stock in the open market, by former SRC shareholders or otherwise, could depress PDC's stock price.

        Former SRC shareholders and current PDC stockholders may not wish to continue to invest in the additional operations of the combined company, or for other reasons may wish to dispose of some or all of their interests in the combined company, and as a result may seek to sell their shares of PDC common stock. Shares of PDC common stock that are issued to current holders of SRC common stock in the merger will be freely tradable by such stockholders without restrictions or further registration under the Securities Act of 1933 (which we refer to as the "Securities Act"), provided, however, that any stockholders who are affiliates of PDC will be subject to the resale restrictions of Rule 144 under the Securities Act. These sales (or the perception that these sales may occur), coupled with the increase in the outstanding number of shares of PDC common stock, may affect the market for, and the market price of, PDC common stock in an adverse manner. Based on the number of shares of SRC common stock outstanding as of September 16, 2019, and the number of outstanding SRC equity awards currently estimated to be payable in PDC common stock following the merger, PDC expects to issue up to approximately 39,923,671 shares of PDC common stock to SRC shareholders in the merger. As of the date of this joint proxy statement/prospectus, PDC had approximately             shares of common stock outstanding and approximately             shares of common stock subject to outstanding options and other rights to purchase or acquire its shares.

        If the merger is completed and stockholders of PDC, including former SRC shareholders, sell substantial amounts of PDC common stock in the public market following the closing of the merger, the market price of PDC common stock may decrease. These sales might also make it more difficult for PDC to raise capital by selling equity or equity-related securities at a time and price that it otherwise would deem appropriate.

The market price of PDC common stock will continue to fluctuate after the merger, and may decline if the benefits of the merger do not meet the expectations of financial analysts.

        Upon completion of the merger, holders of SRC common stock will become holders of shares of PDC common stock. The market price of PDC common stock may fluctuate significantly following

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completion of the merger, including if PDC does not achieve the perceived benefits of the merger as rapidly, or to the extent anticipated by, financial analysts or the effect of the merger on PDC's financial results is not consistent with the expectations of financial analysts. If the price of PDC's common stock decreases after the merger, holders of SRC common stock will lose some or all of the value of their investment in PDC common stock. In addition, the stock market has experienced significant price and volume fluctuations in recent times which, if they continue to occur, could have a material adverse effect on the market for, or liquidity of, the PDC common stock, regardless of PDC's actual operating performance.

The market price of PDC common stock may be affected by factors different from those that historically have affected SRC common stock.

        Upon completion of the merger, holders of SRC common stock who receive merger consideration will become holders of PDC common stock. The businesses of PDC and SRC differ in certain respects, and, accordingly, the financial position or results of operations and/or cash flows of PDC after the merger, as well as the market price of PDC common stock, may be affected by factors different from those currently affecting the financial position or results of operations and/or cash flows of SRC. Following the completion of the merger, SRC will be part of a larger company, so decisions affecting SRC may be made in respect of the combined company as a whole rather than the SRC businesses individually. For a discussion of the businesses of PDC and SRC and of some important factors to consider in connection with those businesses, see the section entitled "Information About the Companies" and the documents incorporated by reference in the section entitled "Where You Can Find More Information" and "Information Incorporated by Reference" beginning on pages 55, 189 and 190, respectively, including, in particular, in the sections entitled "Risk Factors" in each of PDC's and SRC's Annual Report on Form 10-K for the year ended December 31, 2018 and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

The merger may not be accretive, and may be dilutive, to PDC's earnings per share, which may negatively affect the market price of PDC common stock.

        Because shares of PDC common stock will be issued in the merger, it is possible that the merger may be dilutive to PDC's earnings per share, which could negatively affect the market price of PDC common stock.

        In connection with the completion of the merger, based on the number of issued and outstanding shares of SRC common stock as of September 16, 2019 and the number of outstanding SRC equity awards currently estimated to be payable in PDC common stock following the merger, PDC will issue up to approximately 39,923,671 shares of PDC common stock. The issuance of these new shares of PDC common stock could have the effect of depressing the market price of PDC common stock, through dilution of earnings per share or otherwise. Any dilution of, or delay of any accretion to, PDC's earnings per share could cause the price of shares of PDC common stock to decline or increase at a reduced rate.

Following the completion of the merger, PDC may incorporate SRC's hedging activities into PDC's business, and PDC may be exposed to additional commodity price risks arising from such hedges.

        To mitigate its exposure to changes in commodity prices, SRC hedges oil and natural gas prices from time to time, primarily through the use of certain derivative commodity instruments. If PDC assumes existing SRC hedges, PDC will bear the economic impact of all of SRC's current hedges following the completion of the merger. Actual crude oil and natural gas prices may differ from the combined company's expectations and, as a result, such hedges could have a negative impact on PDC's business.

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The combined company may record goodwill and other intangible assets that could become impaired and result in material non-cash charges to the results of operations of the combined company in the future.

        The merger will be accounted for as an acquisition of a business by PDC in accordance with accounting principles generally accepted in the United States (which we refer to as "GAAP"). Under the acquisition method of accounting, the assets and liabilities of SRC and its subsidiaries will be recorded, as of completion, at their respective fair values and added to those of PDC. The reported financial condition and results of operations of PDC for periods after completion of the merger will reflect SRC balances and results after completion of the merger but will not be restated retroactively to reflect the historical financial position or results of operations of SRC and its subsidiaries for periods prior to the merger. For additional information, see the section entitled "Unaudited Pro Forma Condensed Combined Consolidated Financial Statements" beginning on page 165.

        Under the acquisition method of accounting, the total purchase price will be allocated to SRC's tangible assets and liabilities and identifiable intangible assets based on their fair values as of the date of completion of the merger. The excess of the purchase price over those fair values, if any, will be recorded as goodwill. To the extent the value of goodwill or intangibles, if any, becomes impaired, the combined company may be required to incur material non-cash charges relating to such impairment. The combined company's operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment.

After the merger is completed, PDC will be proportionally more exposed to regulatory risks associated with oil and gas operations in Colorado and other risks associated with a more geographically-concentrated asset base.

        PDC's principal assets in terms of production and reserves are located in the DJ Basin in Colorado, but it also has a significant acreage position in the Permian Basin in Texas. During the six months ended June 30, 2019, 78.4% of PDC's production came from its assets in Colorado and 21.6% came from its assets in Texas. Substantially all of SRC's properties, and all of its current production and reserves, are located in Colorado. As discussed in "The Merger—Background of the Merger" beginning on page 68, various new regulatory requirements applicable to oil and natural gas operations in Colorado have been proposed or adopted in recent years. In particular, Proposition 112, a voter initiative that qualified for the ballot for the general election in November 2018, would have effectively prohibited the vast majority of both PDC's and SRC's planned drilling activity in Colorado by imposing mandatory 2,500 foot setbacks between new oil and gas wells and any occupied structure or designated "vulnerable area". Although Proposition 112 was defeated at the polls, subsequent legislation significantly amended existing state law to, among other things, require the Colorado Oil and Gas Conservation Commission (which we refer to as the "Commission") to prioritize public health and environmental concerns in its decisions, instruct the Commission to adopt rules to minimize emissions of methane and other air contaminants, and authorize local governmental authorities to impose limitations on oil and gas development activities more stringent than those imposed at the state level. If the merger is completed, the percentage of PDC's combined properties, production and reserves located in Colorado will increase and its exposure to the risk of unfavorable regulatory developments in the state will therefore increase as well. Similarly, the operations of both PDC and SRC have been adversely affected in recent years by limitations in the availability of adequate midstream infrastructure in the DJ Basin. The increased percentage of PDC's combined production located in the DJ Basin following the merger will proportionately increase PDC's exposure to this risk, as well as other risks associated with operating in a more concentrated geographic area.


Risks Relating to PDC's Business

        You should read and consider risk factors specific to PDC's businesses that will also affect the combined company after the completion of the merger. These risks are described in Part I, Item 1A of PDC's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in Part II,

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Item 1A of PDC's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, and in other documents that are incorporated by reference herein. For the location of information incorporated by reference in this joint proxy statement/prospectus, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference," beginning on pages 189 and 190, respectively.


Risks Relating to SRC's Business

        You should read and consider risk factors specific to SRC's businesses that will also affect the combined company after the completion of the merger. These risks are described in Part I, Item 1A of SRC's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and in Part II, Item 1A of SRC's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019, and in other documents that are incorporated by reference herein. For the location of information incorporated by reference in this joint proxy statement/prospectus, see the sections entitled "Where You Can Find More Information" and "Information Incorporated by Reference, " beginning on pages 189 and 190, respectively.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

        This joint proxy statement/prospectus, and the documents to which SRC and PDC refer you in this joint proxy statement/prospectus, as well as oral statements made or to be made by SRC and PDC, include certain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (which we refer to as the "Exchange Act"). All statements, other than statements of historical fact, included in this joint proxy statement/prospectus that address activities, events or developments that PDC or SRC expects, believes or anticipates will or may occur in the future are forward-looking statements. Words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "create," "intend," "could," "may," "foresee," "plan," "will," "guidance," "look," "outlook," "goal," "future," "assume," "forecast," "build," "focus," "work," "continue" or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements include, but are not limited to, statements regarding the merger, pro forma descriptions of the combined company and its operations, integration and transition plans, synergies, opportunities and anticipated future performance. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this joint proxy statement/prospectus. These include:

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        Such factors are difficult to predict and in many cases may be beyond the control of PDC and SRC. PDC's and SRC's forward-looking statements are based on assumptions that PDC and SRC, respectively, believe to be reasonable but that may not prove to be accurate. Consequently, all of the forward-looking statements PDC and SRC make in this joint proxy statement/prospectus are qualified by the information contained or incorporated by reference herein, including the information contained under this heading and the information detailed in PDC's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2019 and June 30, 2019, Current Reports on Form 8-K and other filings PDC makes with the SEC, which are incorporated herein by reference, and in SRC's Annual Report on Form 10-K for the fiscal year ended December 31, 2018, Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2019 and June 30, 2019, Current Reports on Form 8-K and other filings SRC makes with the SEC, which are incorporated herein by reference. For additional information, see the sections entitled "Risk Factors," "Where You Can Find More Information" and "Information Incorporated by Reference" beginning on pages 40, 189 and 190, respectively.

        PDC and SRC undertake no obligation to publicly release the result of any revisions to any such forward-looking statements that may be made to reflect events or circumstances that occur, or which they become aware of, except as required by applicable law or regulation. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

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INFORMATION ABOUT THE COMPANIES

PDC Energy, Inc.

1775 Sherman Street
Suite 3000
Denver, CO 80203
Phone: (303) 860-5800

        PDC Energy, Inc. is a domestic independent exploration and production company that acquires, explores and develops properties for the production of crude oil, natural gas and NGLs, with operations in the Wattenberg Field in Colorado and the Delaware Basin in Texas. PDC's operations in the Wattenberg Field are focused in the horizontal Niobrara and Codell plays and its Delaware Basin operations are primarily focused in the Wolfcamp zones.

SRC Energy Inc.

1675 Broadway
Suite 2600
Denver, CO 80202
Phone: (720) 616-4300

        SRC is an independent oil and gas company engaged in the acquisition, development, and production of oil, natural gas, and natural gas liquids in the DJ Basin in Colorado. The DJ Basin contains hydrocarbon-bearing deposits in several formations, including the Niobrara, Codell, Greenhorn, Shannon, Sussex, J-Sand, and D-Sand. The area has produced oil and natural gas for over fifty years and benefits from established infrastructure, long reserve life, and multiple service providers. SRC's oil and natural gas activities are focused in the Wattenberg Field, in Weld County, Colorado, an area that covers the western flank of the DJ Basin. Currently, SRC is focused on the horizontal development of the Codell formation as well as the three benches of the Niobrara formation, which are all characterized by relatively high liquids content.

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SPECIAL MEETING OF PDC STOCKHOLDERS

Date, Time and Place

        The PDC special meeting will be held on                  , 2019, at            , Mountain Time, at            .

Purpose of the PDC Special Meeting

        The purpose of the PDC special meeting is to consider and vote on the PDC merger proposal and the PDC issuance proposal.

        PDC will transact no other business at the PDC special meeting.

Recommendation of the PDC Board of Directors

        The PDC board unanimously recommends that PDC stockholders vote "FOR" the approval of the PDC merger proposal and the PDC issuance proposal.

        For additional information on the recommendation of the PDC board, see the section entitled "The Merger—Recommendation of the PDC Board of Directors and PDC's Reasons for the Merger" beginning on page 75.

Record Date and Outstanding Shares of PDC Common Stock

        Only stockholders of record of issued and outstanding shares of PDC common stock as of the close of business on                        , 2019, the record date for the PDC special meeting (which we refer to as the "PDC record date"), are entitled to notice of, and to vote at, the PDC special meeting or any subsequent reconvening of the PDC special meeting following or any subsequent reconvening of the PDC special meeting following any adjournments and postponements of the PDC special meeting.

        As of the close of business on the PDC record date, there were                        shares of PDC common stock issued and outstanding and entitled to vote at the PDC special meeting. You may cast one vote for each share of PDC common stock that you held as of the close of business on the PDC record date.

        A complete list of PDC stockholders entitled to vote at the PDC special meeting will be available for inspection at PDC's principal office at 1775 Sherman Street, Suite 3000, Denver, CO 80203 during regular business hours for a period of no less than 10 days before the PDC special meeting and during the PDC special meeting at                                    .

Quorum; Abstentions and Broker Non-Votes

        A quorum of PDC stockholders is necessary to hold a valid meeting. The presence at the PDC special meeting, in person or by proxy, of the holders of a majority of the outstanding shares of PDC common stock entitled to vote at the PDC special meeting constitutes a quorum. If you submit a properly executed proxy card, even if you do not vote for the proposal or vote to "abstain" in respect of proposal, your shares of PDC common stock will be counted for purposes of determining whether a quorum is present for the transaction of business at the PDC special meeting. Broker non-votes will not be treated as present for purposes of determining the presence of a quorum at the PDC special meeting.

        Executed but unvoted proxies will be voted in accordance with the recommendations of the PDC board on each proposal.

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Required Vote

        Approval of the PDC merger proposal requires the affirmative vote of the holders of a majority of the outstanding PDC common stock, and approval of the PDC issuance proposal requires the affirmative vote of a majority of votes cast by PDC stockholders present in person or by proxy at the PDC special meeting and entitled to vote on such proposal. Approval of both the PDC merger proposal and the PDC issuance proposal is a condition to the completion of the merger. Abstentions will be counted as votes "AGAINST" the PDC merger proposal and the PDC issuance proposal. Broker non-votes and failures to vote will be counted as votes "AGAINST" the PDC merger proposal but will have no effect on the PDC issuance proposal.

        The PDC merger proposal and the PDC issuance proposal are described in the section entitled "PDC Proposals" beginning on page 61.

Methods of Voting

        PDC stockholders, whether holding shares directly as stockholders of record or beneficially in "street name," may vote on the Internet by going to the web address provided on the enclosed proxy card and following the instructions for Internet voting, by phone using the toll-free phone number listed on the enclosed proxy card, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

        PDC stockholders of record may vote their shares in person by ballot at the PDC special meeting or by submitting their proxies:

        PDC stockholders who hold their shares in "street name" by a broker, bank or other nominee should refer to the proxy card, voting instruction form or other information forwarded by their broker, bank or other nominee for instructions on how to vote their shares.

Voting in Person

        Shares held directly in your name as stockholder of record may be voted in person at the PDC special meeting. If you choose to vote your shares in person at the PDC special meeting, bring your enclosed proxy card and proof of identification. Even if you plan to attend the PDC special meeting, the PDC board recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the PDC special meeting.

        If you are a beneficial holder holding in street name, you will receive separate voting instructions from your broker, bank or other nominee explaining how to vote your shares. Please note that if your shares are held in street name by a broker, bank or other nominee and you wish to vote at the PDC special meeting, you will not be permitted to vote in person unless you first obtain a legal proxy issued in your name from the record owner. You are encouraged to request a legal proxy from your broker, bank or other nominee promptly as the process can be lengthy.

Voting by Proxy

        Whether you hold your shares of PDC common stock directly as the stockholder of record or beneficially in street name, you may direct your vote by proxy without attending the PDC special

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meeting. You can vote by proxy by phone, the Internet or mail by following the instructions provided in the enclosed proxy card.

Voting 401(k) and Profit Sharing Plan Shares

        If you are a participant in PDC's 401(k) and Profit Sharing Plan and have shares of PDC common stock credited to your plan account as of the record date, you have the right to direct the plan trustee how to vote those shares. The trustee will vote the shares in your plan account in accordance with your instructions. Your vote may not be counted if your proxy card is not received by the trustee by                        , 2019. You cannot vote such shares at the PDC special meeting or change your vote.

Questions About Voting

        If you have any questions about how to vote or direct a vote in respect of your shares of PDC common stock, you may contact MacKenzie Partners, Inc., PDC's proxy solicitor, toll-free at (800) 322-2885 or, for brokers and banks, collect at (212) 929-5500.

Adjournment

        In accordance with the PDC bylaws, whether or not a quorum is present, the chairman of the PDC special meeting will have the power to adjourn the PDC special meeting from time to time for the purpose of, among other things, soliciting additional proxies. If the PDC special meeting is adjourned with respect to the PDC merger proposal or the PDC issuance proposal, PDC stockholders who have already submitted their proxies will be able to revoke them at any time prior to their use. At any subsequent reconvening of the PDC special meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the PDC special meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent meeting.

        In addition, the merger agreement provides that PDC (i) will be required to adjourn or postpone the PDC special meeting to the extent necessary to ensure that any legally required supplement or amendment to this joint proxy statement/prospectus is provided to the PDC stockholders or if, as of the time the PDC special meeting is scheduled, there are insufficient shares of PDC common stock represented to constitute a quorum necessary to conduct business at the PDC special meeting, and (ii) may adjourn or postpone the PDC special meeting if, as of the time for which the PDC special meeting is scheduled, PDC reasonably determines in good faith that there are insufficient shares of PDC common stock represented to obtain the adoption and approval of the PDC merger proposal or the PDC issuance proposal. However, unless PDC and SRC otherwise agree, the PDC special meeting will not be adjourned or postponed to a date that is more than 30 days after the date for which the PDC special meeting was previously scheduled (though the PDC special meeting will be adjourned or postponed every time the circumstances described in (i) exist, and may be adjourned or postponed every time the circumstances described in (ii) exist) or to a date on or after two business days prior to the end date (as defined under "The Merger Agreement—Termination—Termination Rights").

Revocability of Proxies

        If you are a stockholder of record of PDC, whether you vote by phone, the Internet or mail, you can change or revoke your proxy before it is voted at the meeting in one of the following ways:

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Proxy Solicitation Costs

        The enclosed proxy card is being solicited by PDC and the PDC board. In addition to solicitation by mail, PDC's directors, officers and employees may solicit proxies in person, by phone or by electronic means. These persons will not be specifically compensated for conducting such solicitation.

        PDC has retained MacKenzie Partners, Inc. to assist in the solicitation process. PDC will pay McKenzie Partners a fee of $25,000, as well as reasonable and documented out-of-pocket expenses. PDC also has agreed to indemnify MacKenzie Partners against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

        PDC will ask brokers, banks and other nominees to forward the proxy solicitation materials to the beneficial owners of shares of PDC common stock held of record by such nominee holders. PDC will reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

No Appraisal Rights

        Under Delaware law, PDC stockholders are not entitled to appraisal rights in connection with the merger or the issuance of shares of PDC common stock as contemplated by the merger agreement.

Other Information

        The matter to be considered at the PDC special meeting is of great importance to the PDC stockholders. Accordingly, you are urged to read and carefully consider the information contained in or incorporated by reference into this joint proxy statement/prospectus and submit your proxy by phone or the Internet or complete, date, sign and promptly return the enclosed proxy card in the enclosed postage-paid envelope. If you submit your proxy by phone or the Internet, you do not need to return the enclosed proxy card.

Assistance

        If you need assistance in completing your proxy card or have questions regarding the PDC special meeting, contact:

LOGO

1407 Broadway, 27th Floor
New York, New York 10018
PDC@mackenziepartners.com
Call Collect: (212) 929-5500
Toll-Free: (800) 322-2885

Vote of PDC's Directors and Executive Officers

        As of the PDC record date, PDC directors and executive officers, and their affiliates, as a group, owned and were entitled to vote                   shares of PDC common stock, or approximately        % of the total outstanding shares of PDC common stock as of the PDC record date.

        PDC currently expects that all of its directors and executive officers will vote their shares "FOR" the PDC merger proposal and the PDC issuance proposal.

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Attending the PDC Special Meeting

        You are entitled to attend the PDC special meeting only if you were a stockholder of record of PDC at the close of business on the PDC record date or you held your shares of PDC beneficially in the name of a broker, bank or other nominee as of the PDC record date, or you hold a valid proxy for the PDC special meeting.

        If you were a stockholder of record of PDC at the close of business on the PDC record date and wish to attend the PDC special meeting, so indicate on the appropriate proxy card or as prompted by the phone or Internet voting system. Your name will be verified against the list of stockholders of record prior to your being admitted to the PDC special meeting.

        If you hold your shares of PDC common stock through a broker, bank or other nominee, you will need to have proof that you are the beneficial owner as of the PDC record date to be admitted to the PDC special meeting. A recent statement or letter from your broker, bank or other nominee confirming your ownership as of the PDC record date, or presentation of a valid proxy from your broker, bank or other nominee, would be acceptable proof of your beneficial ownership.

        You should be prepared to present government-issued photo identification for admittance. If you do not provide photo identification or comply with the other procedures outlined above upon request, you might not be admitted to the PDC special meeting.

Results of the PDC Special Meeting

        Within four business days following the PDC special meeting, PDC intends to file the final voting results with the SEC on a Current Report on Form 8-K. If the final voting results have not been certified within that four business day period, PDC will report the preliminary voting results on a Current Report on Form 8-K at that time and will file an amendment to the Current Report on Form 8-K to report the final voting results within four days of the date that the final results are certified.

        PDC STOCKHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE PDC MERGER PROPOSAL AND THE PDC ISSUANCE PROPOSAL.

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PDC PROPOSALS

        It is a condition to the completion of the merger that PDC stockholders approve both the merger and the issuance of shares of PDC common stock in the merger. In the merger, each SRC shareholder will receive, for each share of SRC common stock that is issued and outstanding as of immediately prior to the effective time of the merger, 0.158 of a share of PDC common stock, with certain exceptions further described in the section entitled "The Merger Agreement—Effect of the Merger on Capital Stock; Merger Consideration" and "The Merger—Appraisal Rights/Dissenters' Rights in the Merger" beginning on pages 122 and 127, respectively.

        PDC stockholders must approve the merger proposal for the merger to be completed because such approval is required under applicable Delaware law. PDC stockholders must also approve the issuance of shares of PDC common stock in the merger because such approval is required under applicable Nasdaq rules. Specifically, Nasdaq Rule 5635(a) requires a Nasdaq-listed company to obtain stockholder approval prior to the issuance of common stock in connection with the acquisition of the stock or assets of another company if the potential issuance is equal to 20% or more of the number of shares of common stock or voting power outstanding before the issuance. PDC expects to issue up to approximately 39,923,671 shares of PDC common stock in connection with the merger based on the number of shares of SRC common stock outstanding as of September 16, 2019.

        In the event the PDC merger proposal and the PDC issuance proposal are approved by PDC stockholders but the merger agreement is terminated (without the merger being completed) prior to the effectiveness of the merger, PDC will not issue any shares of PDC common stock as a result of the approval of the PDC merger proposal or the PDC issuance proposal.

        Approval of the PDC merger proposal requires the affirmative vote of the holders of a majority of the outstanding PDC common stock, and approval of the PDC issuance proposal requires the affirmative vote of a majority of votes cast by PDC stockholders present in person or by proxy at the PDC special meeting and entitled to vote on such proposal. Approval of both the PDC merger proposal and the PDC issuance proposal is a condition to the completion of the merger. Abstentions will be counted as votes "AGAINST" the PDC merger proposal and the PDC issuance proposal. Broker non-votes and failures to vote will be counted as votes "AGAINST" the PDC merger proposal but will have no effect on the PDC issuance proposal.

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SPECIAL MEETING OF SRC SHAREHOLDERS

Date, Time and Place

        The SRC special meeting will be held on                  , 2019, at                  , Mountain Time, at                  .

Purpose of the SRC Special Meeting

        The purpose of the SRC special meeting is to consider and vote on:

        SRC will transact no other business at the SRC special meeting.

Recommendation of the SRC Board of Directors

        The SRC board unanimously recommends that SRC shareholders vote:

        For additional information on the recommendation of the SRC board, see the section entitled "SRC Proposals" and "The Merger—Recommendation of the SRC Board of Directors and SRC's Reasons for the Merger" beginning on pages 67 and 87.

Record Date and Outstanding Shares of SRC Common Stock

        Only shareholders of record of issued and outstanding shares of SRC common stock as of the close of business on                  , 2019, the record date for the SRC special meeting (which we refer to as the "SRC record date"), are entitled to notice of, and to vote at, the SRC special meeting or any subsequent reconvening of the SRC special meeting following any adjournments and postponements of the SRC special meeting.

        As of the close of business on the SRC record date, there were                  shares of SRC common stock issued and outstanding and entitled to vote at the SRC special meeting. You may cast one vote for each share of SRC common stock that you held as of the close of business on the SRC record date.

        A complete list of SRC shareholders entitled to vote at the SRC special meeting will be available for inspection at SRC's principal office at 1675 Broadway, Suite 2600, Denver, CO 80202 during regular business hours for a period of no less than 10 days before the SRC special meeting and during the SRC special meeting.

Quorum; Abstentions and Broker Non-Votes

        A quorum of SRC shareholders is necessary to hold a valid meeting. The presence at the SRC special meeting, in person or by proxy, of the holders of one-third of the outstanding shares of SRC common stock entitled to vote at the SRC special meeting constitutes a quorum. If you submit a properly executed proxy card, even if you do not vote for one or both proposals or vote to "abstain" in respect of one or both proposals, your shares of SRC common stock will be counted for purposes of determining whether a quorum is present for the transaction of business at the SRC special meeting. Broker non-votes will not be treated as present for purposes of determining the presence of a quorum at the SRC special meeting.

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        Executed but unvoted proxies will be voted in accordance with the recommendations of the SRC board.

Required Votes

        Approval of the SRC merger proposal requires the affirmative vote of a majority of the outstanding shares of SRC common stock entitled to vote on the proposal. Abstentions, broker non-votes and failures to vote will have the same effect as votes "AGAINST" the proposal.

        Approval of the non-binding compensation proposal requires that the votes cast in favor of the proposal exceed the votes cast against the proposal. Neither abstentions, broker non-votes nor failures to vote will have any effect on the outcome of the vote. As an advisory vote, this proposal is not binding upon SRC or the SRC board or PDC or the PDC board, and approval of this proposal is not a condition to completion of the merger.

        The SRC merger proposal and non-binding compensation proposal are described in the section entitled "SRC Proposals" beginning on page 67.

Methods of Voting

        SRC shareholders, whether holding shares directly as shareholders of record or beneficially in "street name," may vote on the Internet by going to the web address provided on the enclosed proxy card and following the instructions for Internet voting, by phone using the toll-free phone number listed on the enclosed proxy card, or by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

        SRC shareholders of record may vote their shares in person by ballot at the SRC special meeting or by submitting their proxies:

        SRC shareholders who hold their shares in street name through a broker, bank or other nominee should refer to the proxy card, voting instruction form or other information forwarded by their broker, bank or other nominee for instructions on how to vote their shares.

Voting in Person

        Shares held directly in your name as shareholder of record may be voted in person at the SRC special meeting. If you choose to vote your shares in person at the SRC special meeting, bring your enclosed proxy card and proof of identification. Even if you plan to attend the SRC special meeting, the SRC board recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the SRC special meeting.

        If you are a beneficial holder holding shares in street name, you will receive separate voting instructions from your broker, bank or other nominee explaining how to vote your shares. Please note that if your shares are held in street name through a broker, bank or other nominee and you wish to vote at the SRC special meeting, you will not be permitted to vote in person unless you first obtain a legal proxy issued in your name from the record owner. You are encouraged to request a legal proxy from your broker, bank or other nominee promptly as the process can be lengthy.

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Voting by Proxy

        Whether you hold your shares of SRC common stock directly as the shareholder of record or beneficially in street name, you may direct your vote by proxy without attending the SRC special meeting. You can vote by proxy by phone, the Internet or mail by following the instructions provided in the enclosed proxy card if you are a shareholder of record or by following the instructions provided to you by your broker, bank or other nominee if you are a holder in street name.

Questions About Voting

        If you have any questions about how to vote or direct a vote in respect of your shares of SRC common stock, you may contact MacKenzie Partners, Inc., SRC's proxy solicitor, toll-free at (800) 322-2885 or, for brokers and banks, collect at (212) 929-5500.

Revocability of Proxies

        If you are a shareholder of record of SRC, whether you vote by phone, the Internet or mail, you can change or revoke your proxy before it is voted at the meeting in one of the following ways:

Proxy Solicitation Costs

        The enclosed proxy card is being solicited on behalf of the SRC board. In addition to solicitation by mail, SRC's directors, officers and employees may solicit proxies in person, by phone or by electronic means. These persons will not be specifically compensated for conducting such solicitation.

        SRC has retained MacKenzie Partners, Inc. to assist in the solicitation process. SRC will pay MacKenzie Partners, Inc. a fee of $25,000, as well as reasonable and documented out-of-pocket expenses. SRC also has agreed to indemnify MacKenzie Partners, Inc. against various liabilities and expenses that relate to or arise out of its solicitation of proxies (subject to certain exceptions).

        SRC will ask brokers, banks and other nominees to forward the proxy solicitation materials to the beneficial owners of shares of SRC common stock held by such nominee holders. SRC will reimburse these nominee holders for their customary clerical and mailing expenses incurred in forwarding the proxy solicitation materials to the beneficial owners.

Adjournment

        Whether or not a quorum is present, the chairman of the SRC special meeting will have the power to adjourn the SRC special meeting from time to time for the purpose of, among other things, soliciting additional proxies. If the SRC special meeting is adjourned, SRC shareholders who have already submitted their proxies will be able to revoke them at any time prior to their use. At any subsequent reconvening of the SRC special meeting, all proxies will be voted in the same manner as they would have been voted at the original convening of the SRC special meeting, except for any proxies that have been validly revoked or withdrawn prior to the subsequent reconvening of the SRC special meeting.

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        In addition, the merger agreement provides that SRC (i) will be required to adjourn or postpone the SRC special meeting to the extent necessary to ensure that any legally required supplement or amendment to this joint proxy statement/prospectus is provided to the SRC shareholders or if, as of the time the SRC special meeting is scheduled, there are insufficient shares of SRC common stock represented to constitute a quorum necessary to conduct business at the SRC special meeting, and (ii) may adjourn or postpone the SRC special meeting if, as of the time for which the SRC special meeting is scheduled, SRC reasonably determines that there are insufficient shares of SRC common stock represented to obtain the approval of the SRC merger proposal. However, unless PDC and SRC otherwise agree, the SRC special meeting will not be adjourned or postponed to a date that is more than 30 days after the date for which the SRC special meeting was previously scheduled (though the SRC special meeting must be adjourned or postponed every time the circumstances described in (i) exist, and may be adjourned or postponed every time the circumstances described in (ii) exist) or to a date on or after two business days prior to the end date (as defined under "The Merger Agreement—Termination—Termination Rights").

No Dissenters' Rights in the Merger

        Under Colorado law, SRC shareholders are not entitled to dissenters' rights in connection with the merger.

Other Information

        The matters to be considered at the SRC special meeting are of great importance to the SRC shareholders. Accordingly, you are urged to read and carefully consider the information contained in or incorporated by reference into this joint proxy statement/prospectus and submit your proxy by phone or the Internet or complete, date, sign and promptly return the enclosed proxy card in the enclosed postage-paid envelope. If you submit your proxy by phone or the Internet, you do not need to return the enclosed proxy card.

Assistance

        If you need assistance in completing your proxy card or have questions regarding the SRC special meeting, contact:

LOGO

1407 Broadway, 27th Floor
New York, New York 10018
PDC@mackenziepartners.com
Call Collect: (212) 929-5500
Toll-Free: (800) 322-2885

Vote of SRC's Directors and Executive Officers

        As of the SRC record date, SRC directors and executive officers, and their affiliates, as a group, owned and were entitled to vote                   shares of SRC common stock, or approximately        % of the total outstanding shares of SRC common stock as of the SRC record date.

        SRC currently expects that all of its directors and executive officers will vote their shares "FOR" the SRC merger proposal and "FOR" the non-binding compensation proposal.

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Attending the SRC Special Meeting

        You are entitled to attend the SRC special meeting only if you were a shareholder of record of SRC on the SRC record date or you held your shares of SRC beneficially through a broker, bank or other nominee on the SRC record date, or you hold a valid proxy for the SRC special meeting.

        If you were a shareholder of record of SRC at the close of business on the SRC record date and wish to attend the SRC special meeting, you should be prepared to present government-issued photo identification for admittance. If your name does not appear on the list of shareholders of record as of the SRC record date or you do not provide photo identification upon request, you might not be admitted to the SRC special meeting.

        If you own your shares of SRC common stock through a broker, bank or other nominee, you will need to have proof that you are the beneficial owner of the shares as of the SRC record date to be admitted to the SRC special meeting. A recent statement or letter from your broker, bank or other nominee confirming your ownership as of the SRC record date, or presentation of a valid proxy from the broker, bank or other nominee through which you own your shares, would be acceptable proof of your beneficial ownership. You should also be prepared to present government-issued photo identification for admittance. If you do not provide photo identification or comply with the other procedures outlined above upon request, you might not be admitted to the SRC special meeting.

Results of the SRC Special Meeting

        Within four business days following the SRC special meeting, SRC intends to file the final voting results with the SEC on a Current Report on Form 8-K. If the final voting results have not been certified within that four business day period, SRC will report the preliminary voting results on a Current Report on Form 8-K at that time and will file an amendment to the Current Report on Form 8-K to report the final voting results within four days of the date that the final results are certified.

        SRC SHAREHOLDERS SHOULD CAREFULLY READ THIS JOINT PROXY STATEMENT/PROSPECTUS IN ITS ENTIRETY FOR MORE DETAILED INFORMATION CONCERNING THE SRC MERGER PROPOSAL AND THE NON-BINDING COMPENSATION PROPOSAL.

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SRC PROPOSALS

Merger Proposal

        It is a condition to completion of the merger that SRC shareholders approve the SRC merger proposal. In the merger, each SRC shareholder will receive, for each share of SRC common stock that is issued and outstanding as of immediately prior to the effective time of the merger, the merger consideration of 0.158 of a share of PDC common stock, with certain exceptions further described in the sections entitled "The Merger—Consideration to SRC Shareholders," and "The Merger Agreement—Effect of the Merger on Capital Stock; Merger Consideration" beginning on pages 68 and 122, respectively.

        The approval by such shareholders of this proposal is required by Section 7-111-103(5) of the CBCA and is a condition to the completion of the merger.

        Approval of the SRC merger proposal requires the affirmative vote of a majority of the outstanding shares of SRC common stock entitled to vote on the proposal. Abstentions, broker non-votes and failures to vote will have the same effect as votes "AGAINST" the merger proposal.

        The SRC board unanimously recommends a vote "FOR" the SRC merger proposal.

Non-binding Compensation Proposal

        As required by Section 14A of the Exchange Act and the applicable SEC rules issued thereunder, which were enacted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, SRC is required to provide its shareholders the opportunity to vote to approve, on a non-binding, advisory basis, certain compensation that may be paid or become payable to SRC's named executive officers that is based on or otherwise relates to the merger, as described in the section entitled "The Merger—Interests of SRC Directors and Executive Officers in the Merger—Quantification of Potential Payments to SRC's Named Executive Officers in Connection with the Merger" beginning on page 116. Accordingly, SRC shareholders are being provided the opportunity to cast an advisory vote on such payments.

        As an advisory vote, this proposal is not binding upon SRC or the SRC board or PDC or the PDC board, and approval of this proposal is not a condition to completion of the merger and is a vote separate and apart from the SRC merger proposal. Accordingly, you may vote to approve the SRC merger proposal and vote not to approve the non-binding compensation proposal and vice versa. Because the executive compensation to be paid in connection with the merger is based on the terms of the merger agreement as well as the contractual arrangements with SRC's named executive officers, such compensation will be payable, regardless of the outcome of this advisory vote, if the SRC merger proposal is approved and the merger is consummated (subject only to the contractual conditions applicable thereto). However, SRC seeks the support of its shareholders and believes that shareholder support is appropriate given the nature of the transaction and the structure of SRC's executive compensation program. Accordingly, holders of shares of SRC common stock are being asked to vote on the following resolution:

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        Approval of the non-binding compensation proposal requires that the votes cast in favor of the proposal exceed the votes cast against the proposal. Neither abstentions, broker non-votes nor failures to vote will have any effect on the outcome of the vote.

        The SRC board unanimously recommends a vote "FOR" the non-binding compensation proposal.


THE MERGER

        This discussion of the merger is qualified in its entirety by reference to the merger agreement, which is attached to this joint proxy statement/prospectus as Annex A and incorporated by reference herein in its entirety. You should read the entire merger agreement carefully as it is the legal document that governs the merger.

Transaction Structure

        At the effective time of the merger, SRC will merge with and into PDC. As a result of the merger, the separate corporate existence of SRC will cease, and PDC will continue as the surviving corporation in the merger.

Consideration to SRC Shareholders

        As a result of the merger, each eligible share of SRC common stock (other than any cancelled shares) issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive the merger consideration.

        SRC shareholders will not be entitled to receive any fractional shares of PDC common stock in the merger, and no SRC shareholders will be entitled to dividends, voting rights or any other rights in respect of any fractional shares of PDC common stock. SRC shareholders that would have otherwise been entitled to receive a fractional share of PDC common stock will instead be entitled to receive, in lieu of fractional shares, an amount in cash, without interest, equal to the product of the volume weighted average price of PDC common stock for the five consecutive trading days ending on the date that is two business days prior to the closing date, as reported by Bloomberg L.P., multiplied by the fraction of a share of PDC common stock to which the holder would otherwise be entitled.

Background of the Merger

        The management and board of directors of both PDC and SRC regularly review their respective company's performance, prospects and strategy in light of the current business and economic environment, as well as developments in the oil and gas exploration and production sector. In conducting their reviews, each of the PDC and SRC boards independently focus particularly on the DJ Basin, the location of both PDC's largest asset in terms of production and reserves and substantially all of SRC's assets. From time to time, the employees of PDC and SRC are in contact with each other regarding a variety of operational matters due to the close proximity of their respective properties in the DJ Basin. For example, PDC, SRC and certain other DJ Basin operators have jointly entered into agreements with a key midstream operator in the basin to facilitate the construction of additional midstream infrastructure, and have worked together on regulatory matters. In addition, PDC and SRC completed an acreage swap in November 2017 that allowed each company to increase a portion of its interests in its operated acreage in the basin. From time to time, including in 2018, representatives of each of the companies have also had informal conversations about the possibility of pursuing a business combination transaction involving the companies.

        In recent years, the strategy and prospects of PDC and SRC, like those of other oil and gas producers with properties in Colorado, have been significantly impacted by new and proposed regulatory requirements. In 2018, opponents of oil and gas development supported Proposition 112 to

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increase the distance between all new oil and gas development not on federal land and any occupied structure or broadly defined "vulnerable area" and which, if enacted, would have effectively prohibited the vast majority of both PDC's and SRC's planned future drilling activities in Colorado. Although Proposition 112 was defeated in the November 2018 election, a new law, referred to as Senate Bill 19-181, was enacted in April 2019. Senate Bill 19-181 made a number of changes to oil and gas regulation in Colorado, in particular through "local control" provisions that give county and municipal governmental authorities the ability to regulate facility siting and surface impacts of oil and natural gas development and to impose requirements that are stricter than state requirements.

        During this period, PDC and SRC continued to analyze the evolving business environment for upstream energy companies, including as a result of the volatility in oil and gas prices. The boards of directors of both companies believe that in the current environment the creation of shareholder value requires, among other things, the optimization of financial returns from drilling activities to the greatest extent practicable, generation of free cash flow, the careful management of G&A and other costs and return of capital to investors, and both believe that consolidation in the industry may be an important means of advancing these goals. Both companies also continued their ongoing engagement with investors in the sector, many of whom expressed similar views about the importance of financial returns, free cash flow, costs, return of capital and consolidation.

        Both companies discussed potential merger and acquisition opportunities in light of these and other relevant considerations. SRC's primary objective is to enhance shareholder value by increasing its asset value, net reserves and cash flow through development, exploitation and acquisition of oil and gas properties, concentrating on its existing core area in the DJ Basin. Beginning in 2016, SRC completed several acquisitions that greatly expanded its acreage in this area, continuing its focus and emphasis on the Weld County area. SRC's board and management regularly review SRC's strategy in light of changes in the oil and gas sector in Colorado, which is impacted by fluctuating oil and gas prices, business and economic conditions and the evolving regulatory environment, all of which affect sources for capital and cost-efficiencies. While the regulatory environment could have a variety of effects on SRC's operations, SRC believes that the Colorado statute's emphasis on local control of oil and gas regulatory matters could help mitigate, to some extent, the impact since all of SRC's planned future development activities are in Weld County, a jurisdiction in which there is strong support for the oil and gas industry, even though opponents of oil and gas development will likely continue to pursue more restrictive drilling regulations.

        On December 11, 2018, the SRC board held an in-person meeting in connection with its ongoing review of SRC's strategy. At this meeting, the SRC board also considered the benefits of a business combination with several potential candidates, including PDC, to facilitate future growth and help generate additional returns for SRC's shareholders based on such larger scale and leverage as compared to continuing as an independent company on a standalone basis. The SRC board discussed the risk that there would be few viable candidates for a successful business combination. SRC's familiarity with PDC and its DJ Basin assets, safety record, health standards, reputation with midstream and service providers, relationships with local governing entities and community involvement also led SRC to believe a combination with PDC could be attractive for SRC's shareholders.

        During 2018 and early 2019, PDC analyzed a number of potential merger and acquisition opportunities, including acquisitions in the Permian Basin in Texas and a combination with SRC. As it continued its dialogue with SRC, it determined that the possibility of a merger of the two companies was potentially attractive. First, PDC believed that the high quality of SRC's assets and their close proximity to PDC's DJ Basin properties would enable the combined company to generate significant financial and ongoing operational synergies and, therefore, to further the goals of improving returns and reducing costs. In addition, although PDC, like SRC, recognizes the continuing challenges posed by the changing regulatory environment in Colorado, it also believes that economically viable drilling will continue to be permitted in Weld County. Because each company's principal assets are located in Weld

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County, PDC believes this strengthens the rationale for a combination with SRC relative to some other potential growth opportunities. Similarly, PDC recognized that the effect of Colorado regulatory concerns would present challenges to completing a significant transaction with a non-Colorado operator that may not be familiar with the regulatory environment in the state and may have reservations about the level of regulatory risk.

        On February 8, 2019, Mr. Lance Lauck, PDC's Executive Vice President—Corporate Development and Strategy, and SRC's Chief Financial Officer, Mr. James Henderson, met in person to discuss in general the possibility of pursuing a business combination between the two companies. Mr. Lauck informed Mr. Henderson that any such transaction would likely be feasible from PDC's perspective only if the price paid represented a low, or no, premium to the trading price of SRC's stock. Later that month, Mr. Barton Brookman, Jr., PDC's President and Chief Executive Officer, and Mr. Lynn A. Peterson, SRC's President and Chief Executive Officer, met in person to discuss the possibility of a combination and related matters such as a confidentiality agreement and due diligence. PDC then circulated a draft confidentiality agreement and due diligence request list for SRC's review.

        In March 2019, Messrs. Brookman and Peterson met again in person at an industry conference and discussed various issues relating to a potential transaction, including certain post-closing governance issues relating to the combined company. However, Mr. Peterson also indicated that SRC wanted to defer further discussion until PDC's then on-going proxy contest with Kimmeridge Energy Management, LLC ("Kimmeridge") was resolved so that SRC would have a better understanding of any impact the proxy contest would have on PDC's leadership and strategic direction. Messrs. Brookman and Peterson met periodically while the proxy contest was ongoing, but Mr. Peterson continued to indicate that SRC would not be interested in a transaction until the proxy contest was resolved without significant changes to PDC's leadership or business.

        On May 14, 2019, the SRC board held an in-person meeting. At this meeting, the SRC board received presentations from potential financial advisors, including Citi and Goldman Sachs, and had detailed discussions with such advisors and management regarding SRC's strategic plans in light of the current market dynamics, business environment and challenging Colorado political environment affecting the oil and gas exploration and production sector.

        On May 29, 2019, PDC held its annual stockholder meeting, and all of the PDC board's nominees, and none of the Kimmeridge nominees, were elected to the PDC board. After such meeting, Kimmeridge reduced its ownership in PDC to 4.95% as of June 18, 2019 based on a public SEC filing. According to a public article, PDC believes that Kimmeridge subsequently sold its remaining PDC shares.

        On May 30, 2019, the PDC board held an in-person meeting at which members of PDC's management and representatives of J.P. Morgan made presentations, based on public data, regarding a potential combination with SRC as well as a potential acquisition in the Permian Basin. After deliberation, and taking into account the analysis and conclusions presented by PDC management, the PDC board instructed management to continue exploring a transaction with SRC but to cease work on the Permian Basin transaction.

        In June 2019, at the direction of the PDC and SRC boards of directors, respectively, Mr. Brookman and Mr. Peterson met to resume discussion of a potential transaction, including general governance matters and potential market reaction to a transaction between the two companies. Following such meeting, Mr. Peterson informed the SRC board of such discussions. The SRC board expressed its view that protections for the SRC shareholders following a transaction, such as contractual provisions relating to the composition of the board of directors of a new combined entity, were important factors in its consideration of any proposed transaction.

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        On June 18, 2019, at an industry conference, a representative of PDC's financial advisor, J.P. Morgan, visited with Mr. Peterson to discuss PDC's interest in a transaction. Subsequently, Mr. Peterson requested a potential transaction timeline from J.P. Morgan and Mr. Brookman, which was later provided. Mr. Peterson apprised the SRC board of such discussion and the materials provided by J.P. Morgan, including the timeline, as well as current industry conditions in the oil and gas exploration and production sector.

        On July 1, 2019, PDC and SRC entered into a reciprocal customary non-disclosure and standstill agreement and began conducting due diligence on non-public material of the other party. Beginning in early July, members of the SRC management team, with the assistance of representatives of Citi and Goldman Sachs, considered aspects of a strategic transaction and performed due diligence on PDC based on public information. Such diligence was later updated using the non-public information provided by the management of each of PDC and SRC.

        On July 2, 2019, PDC provided to SRC a non-binding indication of interest contemplating an all or predominantly all stock transaction in which the consideration would represent a low, or no, premium relative to the trading price of SRC's common stock. Shortly afterwards, Messrs. Brookman and Peterson met in person and had an extensive discussion regarding numerous aspects of a potential transaction, including price and governance matters, as well as the Colorado regulatory environment. Following such meeting, the SRC board was provided a copy of the indication of interest letter and a summary of the potential transaction discussions. At the time, the SRC common stock price implied a 0.138 exchange ratio to the PDC common stock price. The SRC board considered with the SRC management and Citi and Goldman Sachs the possibility of conducting a marketing process to solicit interest from other companies in a potential transaction; however, the SRC board recognized that in light of the challenging Colorado political environment and the resulting lack of interest for new entrants in the DJ Basin, it was highly unlikely that another viable transaction candidate would participate meaningfully and successfully in such a process. In light of these factors and the potential benefits of a combination with PDC, the SRC board expressed a willingness to have SRC management pursue a potential business combination with PDC.

        On July 14, 2019, Mr. Peterson met with Messrs. Brookman and Jeff Swoveland, the non-executive chairman of PDC's board, to discuss the potential transaction.

        On July 15, 2019, PDC and SRC opened their respective virtual data rooms to commence due diligence. Later that month, the PDC and SRC management teams met in person to present information to each other regarding their respective operations, financial matters and other topics. Members of the senior management of each company met separately at that time to discuss various terms of the potential transaction, including the amount and type of consideration to be paid. At this meeting, SRC expressed its preference for an all-stock transaction.

        On July 28, 2019, Messrs. Brookman and Peterson met to discuss the general terms and structure of a possible transaction, but no general agreement was reached.

        On August 1, 2019, PDC's counsel Wachtell, Lipton, Rosen & Katz ("Wachtell Lipton") circulated a draft of the merger agreement to SRC and its counsel, Akin Gump Strauss Hauer & Feld LLP ("Akin Gump").

        On August 4, 2019, following updates provided to their respective boards, Messrs. Brookman and Peterson met in person to discuss certain governance issues, including the issue of SRC board representation. Messrs. Brookman and Peterson tentatively agreed to discuss with their respective boards the possibility that SRC would be entitled to designate candidates for two seats on the combined company's board, and they further discussed the issue by phone on August 6, 2019.

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        On August 6, 2019, a Bloomberg L.P. article reported that the companies were discussing a potential business combination. Neither company initiated such article or responded to inquiries regarding such article.

        During the period of August 5, 2019 through August 7, 2019, the SRC board held in-person meetings. On August 5, 2019, members of SRC management met with representatives of Akin Gump, Citi and Goldman Sachs. Each of Citi and Goldman Sachs had entered into an engagement letter with SRC to serve as a financial advisor. The SRC board had previously met representatives of each bank several times and had discussed its respective expertise. The representative of Akin Gump presented to the SRC board a summary of certain key terms and issues noted in Akin Gump's initial review of the merger agreement, and discussion followed. The representative of Akin Gump reviewed the directors' fiduciary duties in evaluating and considering a potential transaction. The next day, the SRC board visited SRC's operations in Weld County. The following day, representatives of Citi and Goldman Sachs discussed their preliminary financial analyses with the SRC board. At that meeting, the SRC board and SRC management engaged in discussion regarding (i) the Bloomberg article, (ii) an overall investor perspective of the energy sector, (iii) the trading price of the SRC common stock, which had historically tracked the PDC common stock trading price over time, (iv) certain transaction considerations, including the profile of PDC, terms and potential timeline, and (v) potential strategic alternatives.

        On August 9, 2019, the independent directors of the SRC board held a telephonic meeting to discuss potential strategic alternatives available to SRC. The independent directors discussed the expected advantages of a potential merger with PDC to achieve key strategic objectives, including (i) the need for consolidation of upstream exploration and production companies within the DJ Basin; (ii) the need for SRC to achieve and maintain free cash flow to provide a return on capital to shareholders; (iii) the advantages that bigger companies have in achieving and maintaining free cash flow; (iv) the weak prospects for, and inadvisability of, raising equity for large acreage acquisitions given the current market environment; (v) the opportunities that a combined entity of SRC and PDC could potentially have to achieve such free cash flow goals and to potentially provide cost savings and streamlined efficiencies, especially compared against SRC's opportunities as a standalone company; and (vi) the reasons a share-for-share transaction could be the optimal approach moving forward to enhance SRC's current operations, including the potential for the SRC shareholders to benefit from any future increases in the value of the combined company.

        On August 9, 2019, Akin Gump circulated a revised draft of the merger agreement to PDC and its advisors that included proposed changes relating to, among other things, PDC's ability to solicit alternative proposals, the termination fee and fee triggers, corporate governance, the merger consideration consisting solely of stock, the treatment of equity awards and other executive compensation matters, the interim operating covenants applicable to each company, the definition of "material adverse effect" and the scope of PDC's representations and warranties. Over the course of the subsequent weeks, the parties and their respective advisors negotiated the open issues and exchanged numerous drafts of the merger agreement and related disclosure schedules.

        On August 11, 2019, PDC's independent directors met in executive session to discuss the potential transaction with SRC. After this discussion, the directors were joined by Messrs. Brookman and Lauck. The PDC board had tentatively indicated that Mr. Lynn A. Peterson and Mr. Paul J. Korus could be the current SRC board members that would become the SRC designees to the pro forma combined company's board of directors following the consummation of the potential transaction.

        On August 12, 2019, the PDC board met again in person to discuss the transaction, and authorized PDC management to offer SRC two board seats on the pro forma combined company's board of directors and an exchange ratio of 0.150 of a share of PDC common stock for each share of SRC common stock in an all-stock transaction. It also authorized PDC management to increase the

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exchange ratio up to 0.156 if necessary. Mr. Brookman communicated this offer in person to Mr. Peterson, with the 0.150 exchange ratio, later that day.

        On August 13, 2019, the SRC board discussed PDC's latest proposal. The SRC board authorized Mr. Peterson to respond to the PDC offer by proposing an exchange ratio of 0.160. The PDC board met telephonically twice that day, with Mr. Brookman providing updates on the status of negotiations. He indicated that he planned to increase the proposed exchange ratio to 0.155 per the prior authorization of the PDC board. Mr. Brookman then communicated the offer of the 0.155 exchange ratio to Mr. Peterson who subsequently informed the SRC board of the offer.

        On August 14, 2019, the SRC board held an in-person meeting with management and representatives of Citi and Goldman Sachs. Messrs. Brookman and Lauck and a representative of J.P. Morgan, met in person with the SRC board to discuss the potential transaction. After the PDC attendees left the meeting, representatives of Citi and Goldman Sachs discussed their preliminary financial analyses with the SRC board. The SRC board was advised by Mr. Peterson that no indications of interest about a transaction with SRC following the August 6th Bloomberg article had been received by SRC, Citi or Goldman Sachs. Discussion followed regarding the possibility of SRC engaging in a marketing process. Following such deliberation, the SRC board concluded that the terms of the potential transaction would not preclude or impede a willing and financially capable third party, were one to exist, from making a superior proposal following the announcement of a transaction with PDC. Following the discussion with the SRC board, the independent directors of SRC met in an executive session to discuss the potential transaction with PDC, including the advantages and disadvantages and the benefits the transaction could have for SRC's shareholders, as well as possible alternatives to such combination, including SRC continuing as a standalone company. Later that day, representatives of management of PDC and SRC met to discuss certain terms of the potential transaction.

        On August 16, 2019, at the direction of SRC board, Mr. Peterson responded to PDC's most recent offer regarding the exchange ratio by reiterating SRC's request for a 0.160 exchange ratio and proposing certain changes with respect to open issues in the merger agreement. Messrs. Brookman and Peterson spoke later that day and discussed the exchange ratio, but did not resolve any of the open issues. Following this conversation, Mr. Brookman instructed PDC's internal team to cease work on the transaction unless and until the parties were able to make progress on the open issues.

        On August 19, 2019, the PDC board met telephonically to discuss the status of negotiations. Later that day, PDC instructed its external advisors to cease work on the potential transaction until the exchange ratio and other open issues were resolved. Mr. Brookman informed Mr. Peterson of this instruction. Mr. Peterson also instructed his internal team and external advisors to cease work on the transaction.

        On August 20, 2019, Messrs. Brookman and Peterson met to discuss various aspects of the potential transaction, including the exchange ratio and other remaining issues. Mr. Brookman indicated that PDC would be willing to agree to an exchange ratio of 0.156, but no agreement was reached with SRC. Following his discussion with Mr. Brookman, Mr. Peterson apprised the SRC board of such meeting.

        On August 21, 2019, Messrs. Lauck and Henderson spoke to discuss generally the status of the potential transaction and certain open issues in the merger agreement.

        On August 22, 2019, Mr. Peterson updated the SRC board about discussions with PDC regarding a potential transaction, including open issues in the merger agreement and the exchange ratio.

        On August 22, 2019, representatives of PDC and SRC met by phone to discuss the exchange ratio and other open issues. Following that meeting each of PDC and SRC instructed their respective management and advisors to re-enter into negotiations. Later that day, Mr. Peterson contacted Mr. Brookman to propose that the companies agree to fix the exchange ratio within a range of 0.155

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and 0.160. Mr. Brookman indicated that he would take Mr. Peterson's proposal back to the PDC board, which later that day approved by unanimous written consent an exchange ratio range of 0.152 to 0.158.

        On August 23, 2019, the SRC board held a telephonic meeting after market close to discuss the transaction. At such meeting with management and representatives of Citi, Goldman Sachs and Akin Gump, a lengthy review and discussion of the transaction occurred. Each of Citi and Goldman Sachs discussed with the SRC board their respective preliminary financial analysis of the potential business combination transaction. The SRC management responded to questions from the SRC board of their view on the transaction, including timing and the increase in SRC's common stock trading price and the implied exchange ratio since the Bloomberg report. The SRC management indicated that they expected a favorable shareholder and market reaction in light of the potential benefits of the combination. Also, the limited number of options with viable companies and the challenges of SRC continuing as a standalone company were discussed. Following the discussion, the SRC board instructed SRC management to work to see if open issues could be resolved. Following that meeting, Mr. Peterson, at the direction of the SRC board, called Mr. Brookman to propose a final exchange ratio of 0.158, and that the parties finalize the merger agreement over the weekend of August 24-25. Mr. Brookman agreed, subject to the approval of the PDC board of the fully-negotiated merger agreement.

        On August 25, 2019, the parties resolved the remaining open merger agreement issues subject to final approval by each company's board and copies of the merger agreement were provided to the directors of each company prior to their respective meetings. That afternoon, the PDC board held a telephonic meeting together with members of PDC management and representatives of J.P. Morgan and Wachtell Lipton. Representatives of Wachtell Lipton and PDC's internal counsel presented to the PDC board a detailed summary of the terms of the draft merger agreement and reviewed the outcome of negotiations with SRC's counsel. In addition, representatives of Wachtell Lipton reviewed the PDC board's fiduciary duties. Mr. Brookman updated the PDC board on events and developments that had occurred since the prior meeting of the PDC board. J.P. Morgan then reviewed with the PDC board its financial analysis of the exchange ratio provided for in the merger agreement and delivered to the PDC board its August 25, 2019 oral opinion, which was confirmed by delivery of a written opinion, dated August 25, 2019, to the effect that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in the opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to PDC, as more fully described in the section "The Merger—Opinion of J.P. Morgan, PDC's Financial Advisor" beginning on page 79 of this joint proxy statement/prospectus. Following a discussion of these matters, the PDC board unanimously (i) determined that, subject to the finalization of the merger agreement and related matters, the merger agreement and the transactions contemplated thereby, including the merger and the issuance of PDC common stock in the merger, were fair to, and in the best interests of, PDC and PDC's stockholders, (ii) adopted and approved the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares in the merger, and (iii) resolved to recommend that PDC's stockholders adopt and approve the merger and the issuance of PDC common stock in the merger.

        On August 25, 2019, beginning in the afternoon, the lead independent director of SRC received a telephonic update on the status of the potential transaction, as well as a detailed written summary of the terms of the merger agreement from management of SRC and a representative of Akin Gump. Following such telephone conversation, the lead independent director and the other independent directors discussed the detailed summary of the terms of the merger agreement with a representative of Akin Gump. The SRC board then convened in a telephonic meeting together with members of SRC management and representatives of Akin Gump, Citi and Goldman Sachs. Representatives of Akin Gump reviewed the SRC board's fiduciary duties and process and also presented to the SRC board a detailed summary of the terms of the draft merger agreement and the discussions with PDC's counsel.

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Representatives of Citi and Goldman Sachs provided the SRC board with their separate financial analyses, noting changes since the meeting held on August 23, 2019. Messrs. Peterson and Henderson updated the SRC board on events and developments that had occurred since the prior meeting of the SRC board. Representatives of Citi and Goldman Sachs then discussed with the SRC board their respective financial analyses of the exchange ratio and delivered to the SRC board their respective oral opinions, which were subsequently confirmed by deliveries of their respective written opinions, dated August 25, 2019, to the effect that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in their opinions, the exchange ratio in the proposed merger was fair, from a financial point of view, to SRC's shareholders, other than PDC and its affiliates, as more fully described in the section "The Merger—Opinions of Citi and Goldman Sachs, SRC's Financial Advisors" beginning on page 90 of this joint proxy statement/prospectus. The SRC board reviewed the benefits and risks of the potential transaction, the information provided by SRC management and other factors deemed relevant in connection with the merger. Following a discussion of these matters, the SRC board unanimously (i) determined that, subject to the finalization of the merger agreement and related matters, the merger agreement and the transactions contemplated thereby, including the merger, were fair to, and in the best interests of, SRC and SRC's shareholders, (ii) adopted and approved the merger agreement and the transactions contemplated thereby, including the merger, and (iii) resolved to recommend that SRC's shareholders adopt and approve the merger agreement, including the merger.

        Following the SRC board's approval of the merger and the merger agreement, on August 25, 2019, SRC and PDC finalized and executed the merger agreement. On August 26, 2019, the companies issued a joint press release and presentation materials announcing execution of the merger agreement and held a joint investor conference call regarding the merger.

Recommendation of the PDC Board of Directors and PDC's Reasons for the Merger

        By unanimous vote, the PDC board, at a meeting held on August 25, 2019, (i) determined the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of PDC common stock in connection with the merger, are fair to, and in the best interests of, PDC and the PDC stockholders, (ii) adopted and approved the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of PDC common stock in connection with the merger, (iii) directed that the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of PDC common stock in connection with the merger, be submitted to the PDC stockholders for adoption and approval and (iv) recommended that the PDC stockholders adopt and approve the merger agreement and the transactions contemplated thereby, including the merger and the issuance of shares of PDC common stock in connection with the merger.

        In evaluating the merger, the PDC board consulted with PDC management, as well as PDC's legal and financial advisors, and considered a number of factors, weighing both perceived benefits of the merger as well as potential risks of the merger.

        In the course of its deliberations, the PDC board considered a variety of factors and information that it believes support its determinations and recommendations, including the following (which are not necessarily presented in order of relative importance):

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        In the course of its deliberations, the PDC board also considered a variety of risks, uncertainties and other potentially negative factors, including the following (which are not necessarily presented in order of relative importance):

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        The PDC board considered all of these factors as a whole and unanimously concluded that they supported a determination to approve the merger agreement and the transactions contemplated thereby, including the issuance of shares of PDC common stock in connection with the merger. The foregoing discussion of the information and factors considered by the PDC board is not exhaustive. In view of the wide variety of factors considered by the PDC board in connection with its evaluation of the merger and the complexity of these matters, the PDC board did not consider it practical to, nor did it attempt to, quantify, rank or otherwise assign relative weights to the specific factors that it considered in reaching its decision. In considering the factors described above and any other factors, individual members of the PDC board may have viewed factors differently or given different weight or merit to different factors.

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        In considering the recommendation of the PDC board that the PDC stockholders vote to adopt and approve the PDC merger proposal and the PDC issuance proposal, PDC stockholders should be aware that the directors and executive officers of PDC may have certain interests in the merger that may be different from, or in addition to, the interests of PDC stockholders generally. The PDC board was aware of these interests and considered them when approving the merger agreement and recommending that PDC stockholders vote to adopt and approve the PDC merger proposal and the PDC issuance proposal, which are described in the section entitled "The Merger—Interests of PDC Directors and Executive Officers in the Merger" beginning on page 112.

        The foregoing discussion of the information and factors considered by the PDC board is forward-looking in nature and should be read in light of the factors described in the section entitled "Cautionary Statement Regarding Forward-Looking Statements" beginning on page 53.

Opinion of J.P. Morgan, PDC's Financial Advisor

        PDC retained J.P. Morgan as its financial advisor in connection with the proposed merger.

        At the meeting of the PDC Board of Directors on August 25, 2019, J.P. Morgan rendered its oral opinion to the PDC Board of Directors that, as of such date and based upon and subject to the various factors, assumptions and limitations set forth in the opinion, the exchange ratio in the proposed merger was fair, from a financial point of view, to PDC. J.P. Morgan confirmed its August 25, 2019 oral opinion by delivering its written opinion to the PDC Board of Directors, dated August 25, 2019, that, as of such date, the exchange ratio in the proposed merger was fair, from a financial point of view, to PDC.

        The full text of the written opinion of J.P. Morgan, dated August 25, 2019, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by J.P. Morgan in preparing the opinion, is attached as Annex B to this joint proxy statement/prospectus and is incorporated herein by reference. This summary of the opinion of J.P. Morgan set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of such opinion. PDC's stockholders are urged to read the opinion in its entirety. J.P. Morgan's opinion was addressed to the PDC Board of Directors (in its capacity as such) in connection with and for the purposes of its evaluation of the proposed merger, was directed only to the exchange ratio in the proposed merger and did not address any other aspect of the proposed merger. J.P. Morgan expressed no opinion as to the fairness of the exchange ratio to the holders of any class of securities, creditors or other constituencies of PDC or as to the underlying decision by PDC to engage in the proposed merger. The issuance of J.P. Morgan's opinion was approved by a fairness committee of J.P. Morgan. The opinion does not constitute a recommendation to any stockholder of PDC as to how such stockholder should vote with respect to the proposed merger or any other matter.

        In arriving at its opinion, J.P. Morgan:

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        In addition, J.P. Morgan held discussions with certain members of the management of PDC and SRC with respect to certain aspects of the proposed merger, and the past and current business operations of PDC and SRC, the financial condition and future prospects and operations of PDC and SRC, the effects of the Transaction on the financial condition and future prospects of PDC, and certain other matters J.P. Morgan believed necessary or appropriate to its inquiry.

        In giving its opinion, J.P. Morgan relied upon and assumed the accuracy and completeness of all information that was publicly available or was furnished to or discussed with J.P. Morgan by PDC and SRC or otherwise reviewed by or for J.P. Morgan. J.P. Morgan did not independently verify any such information or its accuracy or completeness and, pursuant to its engagement letter with PDC, J.P. Morgan did not assume any obligation to undertake any such independent verification. J.P. Morgan did not conduct and was not provided with any valuation or appraisal of any assets or liabilities, nor did J.P. Morgan evaluate the solvency of PDC or SRC under any state or federal laws relating to bankruptcy, insolvency or similar matters. In relying on financial analyses and forecasts provided to J.P. Morgan or derived therefrom, including the Synergies, J.P. Morgan assumed that they were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by management as to the expected future results of operations and financial condition of PDC and SRC to which such analyses or forecasts relate. J.P. Morgan expresses no view as to such analyses or forecasts (including the Synergies) or the assumptions on which they were based. J.P. Morgan also assumed that the proposed merger and the other transactions contemplated by the merger agreement will qualify as a tax-free reorganization for United States federal income tax purposes, and will be consummated as described in the merger agreement. J.P. Morgan also assumed that the representations and warranties made by PDC and SRC in the merger agreement and the related agreements are and will be true and correct in all respects material to J.P. Morgan's analysis. J.P. Morgan is not a legal, regulatory or tax expert and relied on the assessments made by advisors to PDC with respect to such issues. J.P. Morgan further assumed that all material governmental, regulatory or other consents and approvals necessary for the consummation of the proposed merger will be obtained without any adverse effect on PDC or SRC or on the contemplated benefits of the proposed merger that would be material to J.P. Morgan's analysis.

        The projections furnished to J.P. Morgan were prepared by the management of PDC and SRC as discussed more fully under "The Merger—Certain Unaudited Forecasted Financial Information" beginning on page 107. Neither PDC nor SRC publicly disclose internal management projections of the type provided to J.P. Morgan in connection with J.P. Morgan's analysis of the proposed merger, and such projections were not prepared with a view toward public disclosure. These projections were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of PDC and SRC's management, including, without limitation, factors related to general economic and competitive conditions and prevailing interest rates and commodity prices. Accordingly, actual results could vary significantly from those set forth in such projections. For more information regarding the use of projections, please refer to the section entitled "The Merger—Certain Unaudited Forecasted Financial Information" beginning on page 107 of this joint proxy statement/prospectus.

        J.P. Morgan's opinion was necessarily based on economic, market and other conditions as in effect on, and the information made available to J.P. Morgan as of, the date of such opinion. J.P. Morgan's opinion noted that subsequent developments may affect J.P. Morgan's opinion and that J.P. Morgan does not have any obligation to update, revise, or reaffirm such opinion. J.P. Morgan's opinion is limited to the fairness, from a financial point of view, to PDC of the exchange ratio in the proposed merger, and J.P. Morgan has expressed no opinion as to the fairness of the exchange ratio to the holders of any class of securities, creditors or other constituencies of PDC or as to the underlying decision by PDC to engage in the proposed merger. Furthermore, J.P. Morgan expressed no opinion with respect to the amount or nature of any compensation to any officers, directors, or employees of any party to the proposed merger, or any class of such persons relative to the exchange ratio in the proposed merger or with respect to the fairness of any such compensation. J.P. Morgan expressed no opinion as to the price at which the PDC common stock or the SRC common stock will trade at any future time.

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        The terms of the merger agreement were determined through arm's length negotiations between PDC and SRC, and the decision to enter into the merger agreement was solely that of the PDC Board of Directors. J.P. Morgan's opinion and financial analyses were only one of the many factors considered by the PDC Board of Directors in its evaluation of the proposed merger and should not be viewed as determinative of the views of the PDC Board of Directors or management with respect to the proposed merger or the exchange ratio.

        In accordance with customary investment banking practice, J.P. Morgan employed generally accepted valuation methodologies in rendering its opinion to the PDC Board of Directors on August 25, 2019, and in the presentation delivered to the PDC Board of Directors on such date in connection with the rendering of such opinion. The following is a summary of the material financial analyses utilized by J.P. Morgan in connection with rendering its opinion to the PDC Board of Directors and does not purport to be a complete description of the analyses or data presented by J.P. Morgan. Some of the summaries of the financial analyses include information presented in tabular format. The tables are not intended to stand alone, and in order to more fully understand the financial analyses used by J.P. Morgan, the tables must be read together with the full text of each summary. Considering the data set forth below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of J.P. Morgan's analyses.

Public Trading Multiples.

        Using publicly available information, J.P. Morgan compared selected financial data of PDC and SRC with similar data for selected publicly traded companies engaged in businesses which J.P. Morgan judged to be sufficiently analogous to PDC and SRC, respectively.

        For PDC, the companies selected by J.P. Morgan were as follows:

        For SRC, the companies selected by J.P. Morgan were as follows:

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        None of the selected companies reviewed for PDC is identical to PDC and none of the selected companies reviewed for SRC is identical to SRC. These companies were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for the purposes of J.P. Morgan's analysis, may be considered similar to those of PDC and SRC, respectively. However, certain of these companies may have characteristics that are materially different from those of PDC and SRC. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the selected companies differently than they would affect PDC or SRC.

        Using publicly available information, J.P. Morgan calculated, for each selected company, the ratio of the company's firm value calculated as the market value of that company's common stock on a fully diluted basis, plus any debt, preferred equity, and non-controlling interest, less cash and cash equivalents and other adjustments ("FV") to the company's EBITDAX (calculated as earnings before interest, taxes, depreciation, amortization and exploration expense) (which we refer to for purposes of this section as "EBITDAX") for the years ending December 31, 2019 (which we refer to for purposes of this section as the "FV/2019E EBITDAX"), December 31, 2020 (which we refer to for purposes of this section as the "FV/2020E EBITDAX") and December 31, 2021 (which we refer to for purposes of this section as the "FV/2021E EBITDAX"), as well as the ratio of the company's equity value (which we refer to for purposes of this section as "EV") to the company's operating cash flow for the years ending December 31, 2019 (which we refer to for purposes of this section as the "EV/2019E Operating Cash Flow"), December 31, 2020 (which we refer to for purposes of this section as the "EV/2020E Operating Cash Flow") and December 31, 2021 (which we refer to for purposes of this section as the "EV/2021E Operating Cash Flow").

        Based on the results of this analysis, J.P. Morgan selected multiple reference ranges of 3.00x - 4.00x, 2.50x - 3.50x and 2.25x - 3.25x for PDC's FV/2019E EBITDAX, FV/2020E EBITDAX and FV/2021E EBITDAX, respectively, and multiple reference ranges of 1.50x - 2.50x, 1.25x - 2.25x and 1.25x - 2.00x for PDC's EV/2019E Operating Cash Flow, EV/2020E Operating Cash Flow and EV/2021E Operating Cash Flow, respectively.

        After applying such ranges to the projected EBITDAX and Operating Cash Flow for PDC for the years ending December 31, 2019, December 31, 2020 and December 31, 2021, respectively, based on the projections provided by PDC and SRC's management, the analysis indicated the following ranges of implied per share equity value for shares of PDC common stock, rounded to the nearest $0.25:

 
  Implied Per Share
Equity Value
 
 
  Low   High  

FV / 2019E EBITDAX

  $ 22.75   $ 36.75  

FV / 2020E EBITDAX

  $ 24.25   $ 41.75  

FV / 2021E EBITDAX

  $ 24.00   $ 43.50  

EV / 2019E Operating Cash Flow

  $ 19.75   $ 33.00  

EV / 2020E Operating Cash Flow

  $ 20.75   $ 37.50  

EV / 2021E Operating Cash Flow

  $ 23.25   $ 37.00  

        The ranges of implied per share equity values for the PDC common stock were compared to PDC's closing price per share of $26.16 on August 6, 2019, the NYSE trading day immediately preceding the August 6, 2019 Bloomberg article reporting that PDC and SRC were exploring a merger (which we refer to for purposes of this section as the "Bloomberg Report") and PDC's closing price per share of $25.25 on August 23, 2019, the NYSE trading day immediately preceding the date of the written opinion, dated August 25, 2019.

        Based on the results of this analysis, J.P. Morgan selected multiple reference ranges of 3.00x - 4.00x, 2.50x - 3.25x and 2.25x - 3.00x for SRC's FV/2019E EBITDAX, FV/2020E EBITDAX and

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FV/2021E EBITDAX, respectively, and multiple reference ranges of 1.50x - 2.00x, 1.25x - 2.00x and 1.25x - 2.00x for SRC's EV/2019E Operating Cash Flow, EV/2020E Operating Cash Flow and EV/2021E Operating Cash Flow, respectively.

        After applying such ranges to the projected EBITDAX and Operating Cash Flow for SRC for the years ending December 31, 2019, December 31, 2020 and December 31, 2021, respectively, based on the projections provided by PDC's management and SRC's management, the analysis indicated the following ranges of implied per share equity value for shares of the SRC common stock, rounded to the nearest $0.25:

 
  Implied Per Share
Equity Value
 
 
  Low   High  

FV / 2019E EBITDAX

  $ 2.75   $ 4.75  

FV / 2020E EBITDAX

  $ 3.00   $ 4.75  

FV / 2021E EBITDAX

  $ 2.75   $ 4.75  

EV / 2019E Operating Cash Flow

  $ 2.75   $ 3.50  

EV / 2020E Operating Cash Flow

  $ 2.75   $ 4.50  

EV / 2021E Operating Cash Flow

  $ 3.00   $ 4.75  

        The ranges of implied per share equity values for SRC were compared to SRC's closing price per share of $3.97 on August 6, 2019, the NYSE trading day immediately preceding publication of the Bloomberg Report, SRC's closing price per share of $4.15 on August 23, 2019, the NYSE trading day immediately preceding the date of the written opinion, dated August 25, 2019, and the implied per share offer price of $3.99 (based on PDC's closing price per share of $25.25 on August 23, 2019).

        J.P. Morgan conducted an after-tax discounted cash flow, net asset valuation analysis for the purpose of determining an implied equity value per share for each of the PDC common stock and the SRC common stock. A discounted cash flow analysis is a method of evaluating an asset using estimates of the future cash flows generated by the asset and taking into consideration the time value of money with respect to those future cash flows by calculating their "present value." "Present value" refers to the current value of an asset's cash flows, and is obtained by discounting those cash flows back to the present using an appropriate discount rate and applying a discounting convention that assumes that all cash flows were generated at the midpoint of each period. A "net asset valuation" is a multi-decade life-of-field model with no terminal value assumptions. "Terminal value" refers to the present value of all future cash flows generated by the asset for periods beyond the projection period.

        J.P. Morgan calculated the present value, as of June 30, 2019, of the asset-level cash flows that PDC is expected to generate from June 30, 2019 onward using the PDC forecasts and assuming (i) consensus pricing through 2023, with prices held flat thereafter (which we refer to for purposes of this section as "Consensus Pricing"), (ii) flat pricing at $55.00/bbl for oil and $2.70/Mmbtu for natural gas (which is referred to in this section as "Flat Pricing") and (iii) NYMEX strip pricing through 2023, with prices held flat thereafter (which is referred to in this section as "Strip Pricing"), which pricing assumptions PDC's management provided input on and approved. PDC's projected asset-level cash flows were discounted to present values using a range of discount rates from 10.00% to 12.00%, which were chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of PDC, and then were adjusted for PDC's projected general and administrative expenses, hedges, projected marketing, well operations and other expenses, projected cash taxes adjusted for utilization of PDC's net operating losses, non-drilling and completion capital and net debt (including asset retirement obligations and proceeds from a planned divestiture) as of June 30, 2019 to indicate a range of implied net asset values for PDC, which were divided by the number of fully diluted shares outstanding at PDC

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to arrive at the following range of implied net asset values per share of PDC common stock, based on Consensus Pricing, Flat Pricing and Strip Pricing. Resulting per share values were in all cases rounded to the nearest $0.25 per share.

 
  Low   High  

PDC Implied Net Asset Value Per Share—Consensus Pricing

  $ 34.50   $ 42.25  

PDC Implied Net Asset Value Per Share—Flat Pricing

  $ 22.75   $ 29.00  

PDC Implied Net Asset Value Per Share—Strip Pricing

  $ 14.25   $ 19.75  

        The ranges of implied per share equity values for the PDC common stock were compared to PDC's closing price per share of $26.16 on August 6, 2019, the NYSE trading day immediately preceding the Bloomberg Report and PDC's closing price per share of $25.25 on August 23, 2019, the NYSE trading day immediately preceding the date of the written opinion, dated August 25, 2019.

        J.P. Morgan calculated the present value, as of June 30, 2019, of the asset-level cash flows that SRC is expected to generate from June 30, 2019 onward using PDC forecasts and assuming (i) Consensus Pricing, (ii) Flat Pricing and (iii) Strip Pricing. J.P. Morgan calculated the foregoing values with and without adjusting for PDC's estimates of the Synergies anticipated to be realized in the proposed merger. SRC's projected asset-level cash flows were discounted to present values using a range of discount rates from 10.00% to 12.00%, which were chosen by J.P. Morgan based upon an analysis of the weighted average cost of capital of SRC, and then were adjusted for SRC's projected general and administrative expenses, hedges, projected cash taxes adjusted for utilization of SRC's net operating losses, non-drilling and completion capital and net debt (including asset retirement obligations) as of June 30, 2019 to indicate a range of implied net asset values for SRC, which were divided by the number of fully diluted shares outstanding at SRC to arrive at the following range of implied net asset values per share of SRC common stock based on Consensus Pricing, Flat Pricing and Strip Pricing, in each case both including and excluding Synergies. Resulting per share values were in all cases rounded to the nearest $0.25 per share.

 
  Low   High  

    Ex-Synergies  

SRC Implied Net Asset Value Per Share—Consensus Pricing

  $ 4.75   $ 5.50  

SRC Implied Net Asset Value Per Share—Flat Pricing

  $ 3.00   $ 3.75  

SRC Implied Net Asset Value Per Share—Strip Pricing

  $ 1.75   $ 2.50  

    With Synergies  

SRC Implied Net Asset Value Per Share—Consensus Pricing

  $ 6.25   $ 7.50  

SRC Implied Net Asset Value Per Share—Flat Pricing

  $ 4.50   $ 5.50  

SRC Implied Net Asset Value Per Share—Strip Pricing

  $ 3.50   $ 4.25  

        The range of implied per share equity value for SRC was compared to SRC's closing price per share of $3.97 on August 6, 2019, the NYSE trading day immediately preceding publication of the Bloomberg Article, SRC's closing price per share of $4.15 on August 23, 2019, the NYSE trading day immediately preceding date of the written opinion, dated August 25, 2019, and the implied per share offer price of $3.99 (based on PDC's closing price per share of $25.25 on August 23, 2019).

Relative Implied Exchange Ratio Analysis.

        J.P. Morgan compared the results for PDC to the results for SRC with respect to the public trading multiples and net asset value analyses described above.

        J.P. Morgan compared the highest equity value per share for PDC to the lowest equity value per share for SRC to derive the lowest exchange ratio implied by each pair of results. J.P. Morgan also compared the lowest equity value per share for PDC to the highest equity value per share for SRC to

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derive the highest exchange ratio implied by each pair of results. The implied exchange ratios resulting from this analysis (in each case rounded to the nearest 0.005x) were:

Public Trading Analysis
  Low   High  

FV / 2019E EBITDAX

    0.0750x     0.2100x  

FV / 2020E EBITDAX

    0.0700x     0.1950x  

FV / 2021E EBITDAX

    0.0650x     0.2000x  

EV / 2019E Operating Cash Flow

    0.0850x     0.1750x  

EV / 2020E Operating Cash Flow

    0.0750x     0.2150x  

EV / 2021E Operating Cash Flow

    0.0800x     0.2050x  

 

Net Asset Value Analysis
  Low   High  

    Ex-Synergies  

Consensus Pricing

    0.1100x     0.1600x  

Flat Pricing

    0.1050x     0.1650x  

Strip Pricing

    0.0900x     0.1750x  

    With Synergies  

Consensus Pricing

    0.1500x     0.2150x  

Flat Pricing

    0.1550x     0.2400x  

Strip Pricing

    0.1750x     0.3000x  

        The implied exchange ratios were compared to the implied exchange ratio on August 6, 2019, the NYSE trading day immediately preceding publication of the Bloomberg Report, of 0.1518x, the exchange ratio under the merger agreement of 0.1580x and the implied exchange ratio on August 23, 2019, the NYSE trading day immediately preceding date of the written opinion, dated August 25, 2019, of 0.1644x.

        Value Creation Analysis.    J.P. Morgan conducted an analysis of the theoretical value creation to the existing holders of the PDC common stock that compared the estimated implied equity value of the PDC common stock on a standalone basis based on the midpoint discount rate value determined in J.P. Morgan's after-tax Net Asset Value Analysis described above based on each of Flat Pricing, Consensus Pricing and Strip Pricing (such pricing assumptions referred to below which we refer to for purposes of this section as the "Pricing Assumptions") to the estimated implied equity value of former PDC stockholders' ownership in the combined company, pro forma for the proposed merger.

        J.P. Morgan calculated the pro forma implied equity value of the PDC common stock under each Pricing Assumption by (1) adding the sum of (a) the implied after-tax equity value of PDC (based on each Pricing Assumption, using the midpoint discount rate value determined in J.P. Morgan's after-tax Net Asset Value Analysis described above), (b) the implied after-tax equity value of SRC (based on each Pricing Assumption, using the midpoint discount rate value determined in J.P. Morgan's after-tax Net Asset Value Analysis described above) and (c) the estimated present value of the Synergies, discounted using PDC's midpoint discount rate, as applicable, used in J.P. Morgan's after tax Net Asset Value Analysis described above, (2) subtracting the sum of the estimated transaction expenses relating to the proposed merger and (3) multiplying such result by the pro forma equity ownership of the combined company by the existing holders of the PDC common stock of approximately 61.8%. This analysis indicated that the proposed merger implied value creation for PDC common stockholders of approximately 5.4% assuming Flat Pricing, 2.7% assuming Consensus Pricing and 12.3% assuming Strip Pricing. There can be no assurance, however, that the Synergies, transaction-related expenses and other impacts referred to above will not be substantially greater or less than those estimated by PDC's management and described above.

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        Miscellaneous.    The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by J.P. Morgan. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. J.P. Morgan believes that the foregoing summary and its analyses must be considered as a whole and that selecting portions of the foregoing summary and these analyses, without considering all of its analyses as a whole, could create an incomplete view of the processes underlying the analyses and its opinion. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above were merely utilized to create points of reference for analytical purposes and should not be taken to be the view of J.P. Morgan with respect to the actual value of PDC or SRC. The order of analyses described does not represent the relative importance or weight given to those analyses by J.P. Morgan. In arriving at its opinion, J.P. Morgan did not attribute any particular weight to any analyses or factors considered by it and did not form an opinion as to whether any individual analysis or factor (positive or negative), considered in isolation, supported or failed to support its opinion. Rather, J.P. Morgan considered the totality of the factors and analyses performed in determining its opinion.

        Analyses based upon forecasts of future results are inherently uncertain, as they are subject to numerous factors or events beyond the control of the parties and their advisors. Accordingly, forecasts and analyses used or made by J.P. Morgan are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by those analyses. Moreover, J.P. Morgan's analyses are not and do not purport to be appraisals or otherwise reflective of the prices at which businesses actually could be acquired or sold. None of the selected companies reviewed as described in the above summary is identical to PDC or SRC. However, the companies selected were selected, among other reasons, because they are publicly traded companies with operations and businesses that, for purposes of J.P. Morgan's analysis, may be considered similar to those of PDC and SRC. The analyses necessarily involve complex considerations and judgments concerning differences in financial and operational characteristics of the companies involved and other factors that could affect the companies compared to PDC or SRC.

        As a part of its investment banking business, J.P. Morgan and its affiliates are continually engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, investments for passive and control purposes, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements, and valuations for corporate and other purposes. J.P. Morgan was selected to advise PDC with respect to the proposed merger on the basis of, among other things, such experience and its qualifications and reputation in connection with such matters and its familiarity with PDC, SRC and the industries in which they operate.

        Pursuant to the engagement letter, PDC has agreed to pay J.P. Morgan estimated fees of up to $14.5 million, $3.25 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion, and the remainder of which is contingent and, to the extent payable, is payable upon the consummation of the proposed merger. In addition, PDC has agreed, subject to certain limitations, to reimburse J.P. Morgan for its expenses incurred in connection with its services, including the fees and disbursements of counsel, and will indemnify J.P. Morgan against certain liabilities arising out of J.P. Morgan's engagement.

        During the two years preceding the date of J.P. Morgan's opinion, J.P. Morgan and its affiliates have had commercial or investment banking relationships with PDC and SRC for which J.P. Morgan and such affiliates have received customary compensation. Such services during such period have included acting as joint lead arranger and joint bookrunner on PDC's revolving credit facility which closed in May 2018, joint bookrunner on PDC's offering of debt securities which closed in November 2017, financial advisor to PDC in connection with PDC's contested director election at its 2019 annual meeting of stockholders, joint lead arranger and joint bookrunner on SRC's revolving credit facility which closed in April 2018 and joint bookrunner on SRC's offerings of debt securities and equity

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securities which closed in November 2017. In addition, J.P. Morgan's commercial banking affiliate is an agent bank and a lender under outstanding credit facilities of PDC, for which it receives customary compensation or other financial benefits. J.P. Morgan anticipates that it and its affiliates will arrange and/or provide financing to PDC related to the proposed merger for compensation in the amount of approximately $2.5 million to $4.5 million. During the two years preceding the date of J.P. Morgan's opinion, J.P. Morgan recognized aggregate fees from PDC of approximately $3.9 million and aggregate fees from SRC of approximately $6.1 million. In addition, J.P. Morgan and its affiliates hold, on a proprietary basis, less than 1% of the outstanding common stock of each of PDC and SRC. In the ordinary course of their businesses, J.P. Morgan and its affiliates may actively trade the debt and equity securities or financial instruments (including derivatives, bank loans or other obligations) of PDC or SRC for their own account or for the accounts of their customers and, accordingly, J.P. Morgan may at any time hold long or short positions in such securities or other financial instruments.

Recommendation of the SRC Board of Directors and SRC's Reasons for the Merger

        By unanimous vote, the SRC board, at a meeting held on August 25, 2019, (i) determined the merger agreement and the transactions contemplated thereby, including the merger, are fair to, and in the best interests of, SRC and the SRC shareholders, (ii) adopted and approved the merger agreement and the transactions contemplated thereby, including the merger, (iii) directed that the merger agreement be submitted to the SRC shareholders for adoption and approval and (iv) recommended that the SRC shareholders adopt and approve the merger agreement and the transactions contemplated thereby, including the merger. The SRC board unanimously recommends that SRC shareholders vote "FOR" the SRC merger proposal and "FOR" the non-binding compensation proposal.

        In reaching its determinations and recommendations, the SRC board consulted with SRC's management and financial and legal advisors and considered a number of factors, including the following factors that weighed in favor of the merger:

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        In the course of its deliberations, the SRC board also considered a variety of risks and other potentially negative factors, including the following:

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        The SRC board believed that, overall, the potential benefits of the merger to SRC shareholders outweighed the risks and uncertainties of the merger.

        In addition, the SRC board was aware of and considered that SRC's directors and executive officers may have interests in the merger that may be different from, or in addition to, their interests as shareholders of SRC generally, as described below under the heading "—Interests of SRC Directors and Executive Officers in the Merger" beginning on page 113.

        The foregoing discussion of factors considered by the SRC board is not intended to be exhaustive, but includes the material factors considered by the SRC board. In light of the variety of factors considered in connection with its evaluation of the merger, the SRC board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the SRC board applied his or her own personal business judgment to the process and may have given different weight to different factors. The SRC board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The SRC board based its recommendation on the totality of the information presented.

Opinions of Citi and Goldman Sachs, SRC's Financial Advisors

Opinion of Citi

        On August 25, 2019, at a meeting of the SRC board at which the merger was approved, Citi rendered to the SRC board an oral opinion, subsequently confirmed by delivery of a written opinion dated August 25, 2019, to the effect that, as of the date of its opinion and based on and subject to the matters described in its opinion, the exchange ratio was fair, from a financial point of view, to holders (other than PDC and its affiliates) of SRC common stock.

        The full text of Citi's written opinion, dated August 25, 2019, which describes the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, is attached to this joint proxy statement/prospectus as Annex C and is incorporated into this joint proxy statement/prospectus by reference. The description of Citi's opinion set forth in this joint proxy statement/prospectus is qualified in its entirety by reference to the full text of Citi's opinion. Citi's opinion was addressed to, and provided for the information of the SRC board (in its capacity as such) in connection with its evaluation of the exchange ratio from a financial point of view and did not address any other terms, aspects or implications of the merger. Citi expressed no view as to, and its opinion did not address, the underlying business decision of SRC to effect or enter into the merger, the relative merits of the merger as compared to any alternative business strategies that might exist for SRC or the effect of any other transaction in which SRC might engage or consider. Citi's opinion is not intended to be and does not constitute a recommendation to any securityholder as to how such securityholder should vote or act on any matters relating to the merger or otherwise.

        In arriving at its opinion, Citi had, among other things:

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        In rendering its opinion, Citi assumed and relied, without independent verification, upon the accuracy and completeness of all financial and other information and data publicly available or provided to or otherwise reviewed by or discussed with Citi and upon the assurances of the managements and representatives of SRC and PDC that they were not aware of any relevant information that was omitted or remained undisclosed to Citi. With respect to the financial forecasts and other information and data that Citi was directed to utilize in its analyses, Citi was advised by the management of SRC, and Citi assumed, with SRC's consent, that such forecasts and other information and data were reasonably prepared on bases reflecting the best currently available estimates and judgments of the managements of SRC and PDC, as applicable, as to the future financial performance of SRC and PDC, the potential strategic implications and financial and operational benefits (including the amount, timing, and achievability thereof) anticipated by the managements of SRC and PDC to result from, and the potential pro forma financial effects of, the merger and the other matters covered thereby. With respect to the future commodity price estimates and assumptions that Citi was directed to utilize in its analyses, Citi assumed, with SRC's consent, and at SRC's direction, that such estimates and assumptions were a reasonable basis upon which to evaluate the matters covered thereby. Citi assumed, with SRC's consent, that the financial results, including with respect to the potential strategic implications and financial and operational benefits anticipated to result from the merger, reflected in such financial forecasts and other information and data would be realized in the amounts and at the times projected.

        Citi relied, at SRC's direction, upon the assessments of the managements of SRC and PDC as to, among other things, (i) the oil, natural gas liquids and natural gas reserves, and drilling, completion and development plans and exploration projects of SRC and PDC and related capital requirements and expenditures, (ii) the potential impact on SRC and PDC of market, competitive, seasonal, cyclical and other trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or otherwise affecting, the oil, natural gas liquids and natural gas industry, including

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with respect to the geographical regions and basins in which SRC and PDC operate, environmental regulations and commodity pricing and supply and demand for oil, natural gas liquids and natural gas, which are subject to significant volatility and which, if different than as assumed, could have a material impact on Citi's analyses or opinion, (iii) existing and future contracts and relationships, agreements and arrangements with, and the ability to attract, retain and/or replace, key employees, customers, service providers, derivatives counterparties and other commercial relationships of SRC and PDC, and (iv) the ability to integrate the operations of SRC and PDC. Citi assumed, with SRC's consent, that there would be no developments with respect to any such matters that would have an adverse effect on SRC, PDC or the merger (including the contemplated benefits thereof) or that otherwise would be meaningful in any respect to Citi's analyses or opinion.

        Citi did not make and, except for certain reserve reports relating to SRC and PDC, Citi was not provided with an independent evaluation or appraisal of the assets or liabilities (contingent, accrued, derivative, off-balance sheet or otherwise) of SRC, PDC or any other entity nor did Citi make any physical inspection of the properties or assets of SRC, PDC or any other entity. Citi did not conduct or provide geological, environmental or other technical assessments and Citi is not an expert in the evaluation of oil, natural gas liquids or natural gas reserves or properties and Citi expressed no view or opinion as to reserve quantities, or the exploration, development or production (including, without limitation, as to the feasibility or timing thereof), of any properties of SRC, PDC or any other entity. Citi did not evaluate the solvency or fair value of SRC, PDC or any other entity under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Citi expressed no view or opinion as to the potential impact on SRC, PDC or any other entity of any pending or potential litigation, claims or governmental, regulatory or other proceedings, orders, audits or investigations. Citi assumed, with SRC's consent, that the merger would be consummated in accordance with its terms and in compliance with all applicable laws, documents and other requirements, without waiver, modification or amendment of any material term, condition or agreement, and that there would not be any delays, limitations, restrictions, conditions or other actions, including any divestitures, amendments or modifications, in the course of obtaining the necessary governmental, regulatory or third party approvals, consents, releases, waivers and agreements for the merger or otherwise that would be meaningful in any respect to Citi's analyses or opinion. Citi also assumed, with SRC's consent, that the merger would qualify for the intended tax treatment contemplated by the merger agreement. Representatives of SRC advised Citi, and Citi assumed, that the final terms of the merger agreement would not vary materially from those set forth in the draft reviewed by Citi . Citi's opinion, as expressed therein, relates to the relative values of SRC and PDC. Citi did not express any view or opinion as to the actual value of PDC common stock when issued in connection with the merger or the prices at which SRC common stock, PDC common stock or any other securities would trade or otherwise be transferable at any time, including following the announcement or consummation of the merger. Citi also expressed no view or opinion with respect to accounting, tax, regulatory, legal or similar matters, including, without limitation, the tax consequences resulting from the merger or otherwise to holders of shares of SRC common stock, and Citi relied, with SRC's consent, upon the assessments of representatives of SRC as to such matters.

        Citi's opinion addressed only the fairness, from a financial point of view and as of the date thereof, of the exchange ratio (to the extent expressly specified in its opinion) without regard to individual circumstances of specific holders of, or any rights, preferences, restrictions or limitations that may be attributable to, shares of SRC common stock or other securities of SRC and did not address proportionate allocation or relative fairness among holders of SRC common stock. Citi's opinion did not address any other terms, aspects or implications of the merger, including, without limitation, the form or structure of the merger or any other agreement, arrangement or understanding to be entered into in connection with or contemplated by the merger or otherwise. In connection with Citi's engagement, Citi was not requested to, and it did not, undertake a third party solicitation process on behalf of SRC with respect to the acquisition of all or a part of SRC. Citi expressed no view as to, and

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its opinion did not address, the underlying business decision of SRC to effect or enter into the merger, the relative merits of the merger as compared to any alternative business strategies that might have existed for SRC or the effect of any other transaction in which SRC might have engaged or considered. Citi expressed no view as to, and its opinion did not address, the fairness (financial or otherwise) of the amount or nature or any other aspect of any compensation or other consideration to any officers, directors or employees of any parties to the merger, or any class of such persons, relative to the exchange ratio or otherwise. Citi's opinion was necessarily based upon information available, and financial, stock market and other conditions and circumstances existing and disclosed to Citi, as of the date of its opinion. Although subsequent developments may affect its opinion, Citi has no obligation to update, revise or reaffirm its opinion. As the SRC board of directors was aware, the credit, financial and stock markets, and the industry in which SRC and PDC operate, have experienced and continue to experience volatility and Citi expressed no opinion or view as to any potential effects of such volatility on SRC, PDC or the merger (including the contemplated benefits thereof). The issuance of Citi's opinion was authorized by Citi's fairness opinion committee.

        In preparing its opinion, Citi performed a variety of financial and comparative analyses, including those described below. The summary of the analyses below is not a complete description of Citi's opinion or the analyses underlying, and factors considered in connection with, Citi's opinion. The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. Citi arrived at its ultimate opinion based on the results of all analyses and factors assessed as a whole, and did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion. Accordingly, Citi believes that the analyses must be considered as a whole and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying such analyses and its opinion.

        In its analyses, Citi considered industry performance, general business, economic, market and financial conditions and other matters existing as of the date of its opinion, many of which are beyond the control of SRC and PDC. No company, business or transaction reviewed is identical or directly comparable to SRC, PDC or the merger and an evaluation of these analyses is not entirely mathematical; rather, the analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the public trading, acquisition or other values of the companies, businesses or transactions reviewed or the results of any particular analysis.

        The estimates contained in Citi's analyses and the ranges resulting from any particular analysis are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than those suggested by such analyses. In addition, analyses relating to the value of businesses or securities do not purport to be appraisals or to reflect the prices at which businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the results derived from, Citi's analyses are inherently subject to substantial uncertainty.

        Citi was not requested to, and it did not, recommend or determine the specific consideration payable in the merger. The type and amount of consideration payable in the merger were determined through negotiations between SRC and PDC and the decision to enter into the merger was solely that of the SRC board. Citi's opinion was only one of many factors considered by the SRC board in its evaluation of the merger and should not be viewed as determinative of the views of the SRC board or management of SRC with respect to the merger, the exchange ratio or any other aspect of the transactions contemplated by the merger agreement.

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Summary of Financial Analyses of Citi

        The summary of the financial analyses described below under this heading "—Summary of Financial Analyses of Citi" is a summary of the material financial analyses prepared for the SRC Board in connection with Citi's opinion, dated August 25, 2019. The summary set forth below does not purport to be a complete description of the financial analyses performed by, and underlying the opinion of, Citi, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Citi. Certain financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary as the tables alone do not constitute a complete description of the financial analyses. Considering the data in the tables below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the financial analyses, could create a misleading or incomplete view of such financial analyses. Future results may be different from those described and such differences may be material. Approximate implied per share equity value reference ranges derived from the financial analyses described below, except for the 52-week trading range, were rounded to the nearest $0.10. For purposes of the financial analyses described below, (i) the term "adjusted EBITDA" generally refers to earnings before interest, taxes, depreciation and amortization, which is referred to as EBITDA, adjusted for, as applicable, certain non-recurring items, certain non-cash items and certain other items, and (ii) the term "CFPS" refers to cash flow per share. Financial data utilized for SRC and PDC in the financial analyses described below, to the extent based on internal financial forecasts and estimates of management, were based on certain financial forecasts and other information and data relating to SRC and PDC provided to and/or discussed with Citi by the managements of SRC and PDC, referred to as the SRC forecasts and PDC forecasts, respectively, used by Citi at the direction of the management of SRC and as further described in "—Certain SRC Unaudited Forecasted Financial and Operating Information."

        In calculating implied exchange ratio reference ranges as reflected in the financial analyses described below, other than the relative contributions analysis, Citi divided the low-ends (or high-ends, as the case may be) of the approximate implied per share equity value reference ranges derived for SRC from such analyses by the high-ends (or low-ends, as the case may be) of the approximate implied per share equity value reference ranges derived for PDC from such analyses in order to calculate the low-ends (or high-ends) of the implied exchange ratio reference ranges. In calculating an implied exchange ratio reference range as reflected in the relative contributions analysis described below, Citi derived overall low to high exchange ratios implied by the relative adjusted EBITDA and operating cash flow contributions of SRC and PDC to the combined company.

Selected Public Companies Analyses

        Citi performed separate selected public companies analyses of PDC and SRC in which Citi reviewed certain financial and stock market information relating to PDC, SRC and the selected publicly traded companies listed below.

        PDC.    In its selected public companies analysis of PDC, Citi reviewed certain financial and stock market information relating to PDC and the following six selected companies (including SRC) described below that Citi considered generally relevant as publicly traded oil and gas exploration and production companies, collectively referred to as the PDC selected companies.

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        Citi reviewed, among other information, firm values, calculated as implied equity values based on the closing stock prices on August 23, 2019, the last trading date prior to the announcement of the merger, plus total debt, preferred equity and non-controlling interests (as applicable), less cash and cash equivalents and estimated midstream assets (as applicable), as a multiple of calendar year 2019 and calendar year 2020 estimated adjusted EBITDA and closing stock prices (as of August 23, 2019) as a multiple of calendar year 2019 and calendar year 2020 estimated CFPS. Financial data of the PDC selected companies were based on publicly available Wall Street research analysts' estimates, public filings and other publicly available information. The overall low to high calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples and calendar year 2019 and calendar year 2020 estimated CFPS multiples observed for the PDC selected companies were as follows:

        Citi noted that the calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples observed for PDC were 3.0x and 2.5x, respectively, and the calendar year 2019 and calendar year 2020 estimated CFPS multiples observed for PDC were 2.0x and 1.6x, respectively, in each case based on publicly available Wall Street research analysts' estimates. Citi then applied selected ranges based on Citi's professional judgment of calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples of 3.0x to 4.3x and 2.5x to 3.5x, respectively, and calendar year 2019 and calendar year 2020 estimated CFPS multiples of 1.3x to 2.0x and 1.0x to 1.6x, respectively, to corresponding data of PDC based on the PDC forecasts utilizing publicly available Wall Street consensus commodity price estimates (which is referred to in this section as "Wall Street Consensus Pricing"). This analysis indicated approximate implied per share equity value reference ranges for PDC based on calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples of $21.80 to $38.40 and $26.50 to $42.80, respectively, and approximate implied per share equity value reference ranges for PDC based on calendar year 2019 and calendar year 2020 estimated CFPS multiples of $15.90 to $24.50 and $16.70 to $27.90, respectively.

        SRC.    In its selected public companies analysis of SRC, Citi reviewed certain financial and stock market information relating to SRC and the following four selected companies (including PDC) described below that Citi considered generally relevant as publicly traded oil and gas exploration and production companies, collectively referred to as the SRC selected companies.

Citi reviewed, among other information, firm values, calculated as implied equity values based on closing stock prices on August 23, 2019, the last trading date prior to the announcement of the merger, plus total debt, preferred equity and non-controlling interests (as applicable), less cash and cash equivalents, as a multiple of calendar year 2019 and calendar year 2020 estimated adjusted EBITDA and closing stock prices (as of August 23, 2019) as a multiple of calendar year 2019 and calendar year 2020 estimated CFPS. Financial data of the SRC selected companies were based on publicly available

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Wall Street research analysts' estimates, public filings and other publicly available information. The overall low to high calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples and calendar year 2019 and calendar year 2020 estimated CFPS multiples observed for the SRC selected companies were as follows:

        Citi noted that the calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples observed for SRC were 3.3x and 3.2x, respectively, and the calendar year 2019 and calendar year 2020 estimated CFPS multiples observed for SRC were 2.1x and 2.1x, respectively, in each case based on publicly available Wall Street research analysts' estimates. Citi then applied selected ranges based on Citi's professional judgment of calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples of 2.9x to 3.5x and 2.6x to 3.2x, respectively, and calendar year 2019 and calendar year 2020 estimated CFPS multiples of 1.5x to 2.1x and 1.3x to 2.1x, respectively, to corresponding data of SRC based on the SRC forecasts utilizing Wall Street Consensus Pricing. This analysis indicated approximate implied per share equity value reference ranges for SRC based on calendar year 2019 and calendar year 2020 estimated adjusted EBITDA multiples of $3.00 to $4.20 and $3.20 to $4.50, respectively, and approximate implied per share equity value reference ranges for SRC based on calendar year 2019 and calendar year 2020 estimated CFPS multiples of $2.80 to $3.90 and $2.80 to $4.40, respectively.

        Utilizing the approximate implied per share equity value reference ranges derived for PDC and the approximate implied per share equity value reference ranges derived for SRC, in each case as described above, Citi calculated the following approximate implied exchange ratio reference ranges, as compared to the exchange ratio:

Implied Exchange Ratio Reference Ranges Based on:    
CY2019E Adj.
EBITDA
  CY2020E Adj.
EBITDA
  CY2019E
CFPS
  CY2020E
CFPS
  Exchange Ratio
0.0774x - 0.1940x   0.0745x - 0.1701x   0.1137x - 0.2441x   0.1000x - 0.2613x   0.1580x

Net Asset Value Analysis

        Citi performed a net asset value analysis of SRC based on the SRC forecasts utilizing New York Mercantile Exchange strip pricing (referred to as NYMEX Strip Pricing), public filings and other publicly available information. An implied aggregate reference range for SRC's proved developed producing reserves and currently undeveloped resources was derived by calculating the net present values (as of June 30, 2019) of the unlevered, after-tax free cash flows that SRC was projected to generate from such assets based on the SRC forecasts utilizing NYMEX Strip Pricing using a selected range of discount rates of 9.5% to 11.0%. In performing its analysis, Citi took into account, based on the SRC forecasts, public filings and other publicly available information, as applicable, (a) the net present value (as of June 30, 2019, utilizing a discount rate range of 9.5% to 11.0%) of SRC's estimated post-tax corporate expenses and net hedge gains and losses, and (b) SRC's estimated net debt as of June 30, 2019. This analysis indicated an approximate implied per share equity value reference range for SRC of $3.00 to $3.80.

        Citi performed a net asset value analysis of PDC based on the PDC forecasts utilizing NYMEX Strip Pricing, public filings and other publicly available information. An implied aggregate reference range for PDC's proved developed producing reserves and currently undeveloped resources was derived

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by calculating the net present values (as of June 30, 2019) of the unlevered, after-tax free cash flows that PDC was projected to generate from such assets based on the PDC forecasts utilizing NYMEX Strip Pricing using a selected range of discount rates of 8.3% to 9.6%. In performing its analysis, Citi took into account, based on the PDC forecasts, public filings and other publicly available information, as applicable, (a) the net present value (as of June 30, 2019, utilizing a discount rate range of 8.3% to 9.6%) of PDC's estimated post-tax corporate expenses, net hedge gains and losses, and additional payments from the sale of PDC's midstream assets, and (b) PDC's estimated net debt as of June 30, 2019. This analysis indicated an approximate implied per share equity value reference range for PDC of $21.90 to $26.10.

        Utilizing the approximate implied per share equity value reference ranges derived for PDC and the approximate implied per share equity value reference ranges derived for SRC, in each case as described above, Citi calculated the following approximate implied exchange ratio reference range, as compared to the exchange ratio:

Implied Exchange Ratio Reference Ranges Based on:   Exchange Ratio
Net Asset Value
   
0.1145x - 0.1744x   0.1580x

Relative Contributions Analysis

        Citi performed a relative contributions analysis in which Citi reviewed the relative contributions of SRC and PDC to the combined company's calendar years 2019 and 2020 estimated adjusted EBITDA and calendar years 2019 and 2020 estimated operating cash flow. Financial data of SRC and PDC were based on the SRC forecasts and PDC forecasts, both utilizing Wall Street Consensus Pricing. This analysis indicated overall approximate implied relative contribution percentages of SRC and PDC (i) to the Combined Company's calendar years 2019 and 2020 estimated adjusted EBITDA of 36.7% and 33.3%, respectively, in the case of SRC, and 63.3% and 66.7%, respectively, in the case of PDC, and (ii) to the combined company's calendar years 2019 and 2020 estimated operating cash flow of 36.4% and 32.7%, respectively, in the case of SRC, and 63.6% and 67.3%, respectively, in the case of PDC.

        Utilizing the approximate implied contribution percentage ranges derived for SRC and PDC described above, and with respect to the ranges derived from adjusted EBITDA data, adjusting to reflect SRC's and PDC's net debt, Citi calculated the following implied Exchange Ratio reference range, as compared to the Exchange Ratio:

Implied Exchange Ratio Reference Ranges Based on:   Exchange Ratio
Relative Contribution Analysis
   
0.1163x - 0.1510x   0.1580x

Certain Additional Information

        Citi also observed certain additional information that was not considered part of its financial analyses with respect to its opinion but was noted for informational purposes, including the following:

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Miscellaneous

        The foregoing summary of certain material financial analyses does not purport to be a complete description of the analyses or data presented by Citi. In connection with the evaluation of the merger by the SRC board of directors, Citi performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Citi's opinion. In arriving at its fairness determination, Citi considered the results of all the analyses and did not draw, in isolation, conclusions from or with regard to any one analysis or factor considered by it for purposes of its opinion. Rather, Citi made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all the analyses. In addition, Citi may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis or combination of analyses described above should not be taken to be the view of Citi with respect to the actual value of the shares of SRC common stock. Further, Citi's analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies used, including judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of SRC or its advisors.

        Citi prepared these analyses for the purpose of providing an opinion to the SRC board of directors as to the fairness, from a financial point of view, of the merger consideration to the holders (other than PDC and its affiliates) of SRC common stock entitled to receive such merger consideration. These analyses do not purport to be appraisals or to necessarily reflect the prices at which the business or securities actually may be sold. Any estimates contained in these analyses are not necessarily indicative of actual future results, which may be significantly more or less favorable than those suggested by such estimates. Accordingly, estimates used in, and the results derived from, Citi's analyses are inherently subject to substantial uncertainty, and Citi assumes no responsibility if future results are materially different from those forecasted in such estimates.

        The issuance of the fairness opinion was approved by the fairness opinion committee of Citi. Pursuant to the terms of Citi's engagement letter with SRC, Citi is entitled to receive a fee estimated, based on the information available as of the date of announcement, at approximately $12 million if the merger is completed, against which a fee of $3 million that was payable upon delivery of Citi's fairness opinion is fully creditable. Citi may receive an additional fee of up to $3.5 million at SRC's sole discretion. In addition, SRC has also agreed to reimburse Citi for Citi's reasonable expenses (including reasonable outside legal fees, expenses and disbursements) and to indemnify Citi for certain liabilities arising out of its engagement.

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        During the two-year period prior to the date of its written opinion, Citi and its affiliates have provided, currently are providing and in the future may provide investment banking, commercial banking and other similar financial services to SRC and certain of its affiliates unrelated to the merger, for which services Citi and its affiliates have received and expect to receive compensation, including, during the past two years, having acted or acting as (i) joint book-running manager on a public equity offering of SRC and (ii) co-manager on a private debt offering of SRC. For the services described above, during the 2-year period prior to the date of its written opinion, Citi and its affiliates received aggregate fees of approximately $600,000.

        During the two-year period prior to the date of its written opinion, neither Citi nor its affiliates has provided financial services to PDC and its affiliates for which Citi received fees. In the future, Citi may provide financial or other services to SRC (subject to consummation of the merger) or PDC and their respective affiliates and in connection with any such services Citi may receive compensation.

        In the ordinary course of business, Citi or its affiliates may actively trade the securities, or related derivative securities, or financial instruments of SRC, PDC and their respective affiliates, for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities or instruments.

        SRC engaged Citi to act as a financial advisor in connection with the merger based on Citi's reputation, experience and familiarity with SRC, PDC and their respective businesses. Citi is an internationally recognized investment banking firm that regularly engages in the valuation of businesses and their securities in connection with mergers and acquisitions, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes.

Opinion of Goldman Sachs

        Goldman Sachs rendered its opinion to the SRC board that, as of August 25, 2019 and based upon and subject to the factors and assumptions set forth therein, the exchange ratio pursuant to the merger agreement was fair from a financial point of view to the holders (other than PDC and its affiliates) of shares of SRC common stock.

        The full text of the written opinion of Goldman Sachs, dated August 25, 2019, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex D. Goldman Sachs provided its opinion for the information and assistance of the SRC board in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any holder of shares of SRC common stock should vote with respect to the merger, or any other matter.

        In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

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        Goldman Sachs also held discussions with members of the senior managements of SRC and PDC regarding their assessment of the strategic rationale for, and the potential benefits of, the merger and the past and current business operations, financial condition, and future prospects of SRC and PDC; reviewed the reported price and trading activity for the shares of SRC common stock and the shares of PDC common stock; compared certain financial and stock market information for SRC and PDC with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the oil and gas exploration and production (which we refer to for purposes of this section as "E&P") industry and performed such other studies and analyses, and considered such other factors, as it deemed appropriate.

        For purposes of rendering the opinion described above, Goldman Sachs relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it and it does not assume any responsibility for any such information. Goldman Sachs did not make an independent evaluation, appraisal or geological or technical assessment of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of SRC or PDC or any of their respective subsidiaries, nor was any evaluation or appraisal of the assets or liabilities of SRC or PDC or any of their respective subsidiaries furnished to Goldman Sachs. Goldman Sachs assumed that the Forecasts, including the Synergies, were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of SRC. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the merger will be obtained without any adverse effect on SRC or PDC or on the expected benefits of the merger in any way meaningful to its analysis. Goldman Sachs has also assumed that the merger will be consummated on the terms set forth in the merger agreement, without the waiver or modification of any term or condition the effect of which would be in any way meaningful to its analysis.

        Goldman Sachs' opinion does not address the underlying business decision of SRC to engage in the merger or the relative merits of the merger as compared to any strategic alternatives that may be available to SRC; nor does it address any legal, regulatory, tax or accounting matters. Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, SRC or any other alternative transaction. Goldman Sachs' opinion addresses only the fairness from a financial point of view, as of the date of the opinion, of the exchange ratio pursuant to merger agreement to the holders (other than PDC and its affiliates) of shares of SRC common stock. Goldman Sachs' opinion does not express any view on, and does not address, any other term or aspect of the merger agreement or the merger or any term or aspect of any other agreement or instrument contemplated by the merger agreement or entered into or amended in connection with the merger, including, without limitation, the fairness of the merger to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of SRC; nor as to the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of SRC, or class of such persons, in

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connection with the merger, whether relative to the exchange ratio pursuant to the merger agreement or otherwise. Goldman Sachs' opinion was necessarily based on economic, monetary, market and other conditions, as in effect on, and the information made available to it as of the date of the opinion and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of its opinion. In addition, Goldman Sachs does not express any opinion as to the prices at which shares of the PDC common stock will trade at any time or as to the impact of the merger on the solvency or viability of SRC or PDC or the ability of SRC or PDC to pay its obligations when they come due. Goldman Sachs' opinion was approved by a fairness committee of Goldman Sachs.

        The following is a summary of the material financial analyses delivered by Goldman Sachs to the SRC board in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs' financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 23, 2019 (which we refer to for purposes of this section as the "last trading date"), the last completed trading day before the public announcement of the merger, and is not necessarily indicative of current market conditions.

        Historical Stock Trading Analysis.    Goldman Sachs calculated the implied consideration per share of SRC common stock by multiplying the exchange ratio by the closing price per share of PDC common stock on the last trading day and analyzed the $3.99 implied consideration per share of SRC common stock represented by the exchange ratio in relation to (i) the closing price per share of SRC common stock on August 6, 2019 (which we refer to for purposes of this section as the "undisturbed date"), the last completed trading prior to the publication of press reports by third parties regarding discussions between SRC and PDC regarding a potential transaction, (ii) the volume weighted average price per share of SRC common stock over the 20-day period ended on the undisturbed date and (iii) the lowest closing price per share of SRC common stock over the 52-week period ended on the undisturbed date. The following table presents the results of this analysis:

Historical Date or Period
  Share Price
Premium / (Discount)
  Price Per Share  

Closing Price as of Undisturbed Date

    0 % $ 3.97  

20-Trading Day VWAP as of Undisturbed Date

    (0 )% $ 4.00  

52-Week Closing Low as of Undisturbed Date

    8 % $ 3.71  

        Implied Exchange Ratio Analysis.    Goldman Sachs reviewed the historical trading prices per share of SRC common stock and per share of PDC common stock for the two-year period ended on the last trading date and calculated historical exchange ratios by dividing the closing price per share of SRC common stock by the closing price per share of PDC common stock over such two-year period. Goldman Sachs then calculated the premia implied by the exchange ratio in relation to (i) historical exchange ratios of shares of SRC common stock to shares of PDC common stock based on the closing prices per share of SRC common stock and per share of PDC common stock on the undisturbed date and on the last trading day, (ii) historical average exchange ratios over the 20-day period ended on the undisturbed date and the 20-day period ended on the last trading day, calculated by dividing the closing price per share of SRC common stock on each trading day during each such period by the closing price per share of PDC common stock on the same trading day during each such period and then taking the average of these daily historical exchange ratios over each such period and (iii) historical exchange ratios represented by the lowest closing price per share of SRC common stock and the lowest closing

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price per share of PDC common stock over the 52-week periods ended on the undisturbed date and the last trading day. The following table presents the results of this analysis:

 
  Undisturbed Date    
  Last Trading Date    
 
 
  Historical Exchange
Ratio
  Premium/Discount   Historical Exchange
Ratio
  Premium/Discount  

Spot Exchange Ratio

    0.1518x     4 %   0.1644x     (4 )%

20-Day Average

    0.1396x     13 %   0.1548x     2 %

52-Week Low

    0.1156x     37 %   0.1156x     37 %

        Illustrative Discounted Cash Flow Analysis—SRC Standalone.    Using the SRC Forecasts, Goldman Sachs performed a discounted cash flow analysis of shares of SRC common stock on a standalone basis. Using discount rates ranging from 7.50% to 9.00%, reflecting estimates of SRC's weighted average cost of capital, Goldman Sachs discounted to present value as of June 30, 2019 (i) estimates of unlevered free cash flow for SRC for July 1, 2019 through December 31, 2024 as reflected in the SRC Forecasts and (ii) a range of illustrative terminal values for SRC, which were calculated by applying an illustrative terminal value to EBITDA multiple range of 3.0x to 4.5x to estimated terminal year EBITDA for SRC, was reflected in the SRC Forecasts. Goldman Sachs derived such range of discount rates by application of the Capital Asset Pricing Model (which we refer to for purposes of this section as "CAPM"), which requires certain company-specific inputs, including the company's target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The illustrative terminal value to EBITDA multiple range for SRC was derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EBITDA multiples implied by SRC's trading prices (and estimates of next-twelve-months EBITDA as reported by IBES) over certain prior periods. Goldman Sachs derived a range of illustrative enterprise values for SRC by adding the range of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for SRC the amount of SRC's net debt as of June 30, 2019, as provided by the management of SRC, to derive a range of illustrative equity values for SRC. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of SRC common stock, as provided by the management of SRC, to derive a range of illustrative values per share of SRC common stock ranging from $3.20 to $6.26.

        Illustrative Discounted Cash Flow Analysis—PDC Standalone.    Using the PDC Standalone Forecasts, Goldman Sachs performed a discounted cash flow analysis of shares of PDC common stock on a standalone basis. Using discount rates ranging from 7.5% to 9.0%, reflecting estimates of PDC's weighted average cost of capital, Goldman Sachs discounted to present value as of June 30, 2019 (i) estimates of unlevered free cash flow for PDC for July 1, 2019 through December 31, 2024 as reflected in the PDC Standalone Forecasts and (ii) a range of illustrative terminal values for PDC, which were calculated by applying an illustrative terminal value to EBITDA multiple range of 2.5x to 4.0x to estimated terminal year EBITDA for PDC, was reflected in the PDC Standalone Forecasts. Goldman Sachs derived such range of discount rates by application of CAPM, which requires certain company-specific inputs, including the company's target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The illustrative terminal value to EBITDA multiple range for PDC was derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EBITDA multiples implied by PDC's trading prices (and estimates of next-twelve-months EBITDA as reported by IBES) over certain prior periods. Goldman Sachs derived a range of illustrative enterprise values for PDC by adding the range of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for PDC the amount of

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PDC's net debt as of June 30, 2019, as provided by the management of PDC, and added to such range the estimated present value of the unconditional contingent payment to be made to PDC in connection with the sale of its midstream assets, as provided by the management of PDC, in each case as approved for Goldman Sachs' use by the management of SRC, to derive a range of illustrative equity values for PDC. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of PDC common stock, as provided by the management of PDC and approved for Goldman Sachs' use by the management of SRC, to derive a range of illustrative values per share of PDC common stock ranging from $21.27 to $44.56.

        Illustrative Discounted Cash Flow Analysis—Implied Valuation Uplift.    Using the Pro Forma Forecasts, Goldman Sachs performed an illustrative discounted cash flow analysis of the combined company on a pro forma basis as of June 30, 2019. Using discount rates ranging from 7.5% to 9.0%, reflecting estimates of the pro forma combined company's weighted average cost of capital, Goldman Sachs discounted to present value as of June 30, 2019, (i) estimates of unlevered free cash flow for the pro forma combined company for July 1, 2019 through December 31, 2024 as reflected in the Pro Forma Forecasts and (ii) a range of illustrative terminal values for the pro forma combined company, which were calculated by applying an illustrative terminal value to EBITDA multiple range of 2.75x to 4.25x to estimated terminal year EBITDA for the pro forma combined company, was reflected in the Pro Forma Forecasts. Goldman Sachs derived such range of discount rates by application of CAPM, which requires certain company-specific inputs, including the company's target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. The illustrative terminal value to EBITDA multiple ranges for the pro forma combined company were derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EBITDA multiples implied by SRC's and PDC's trading prices over certain prior periods (and estimates of next-twelve-months EBITDA for SRC and PDC as reported by IBES). Goldman Sachs derived ranges of illustrative enterprise values for the pro forma combined company by adding the ranges of present values it derived above. Goldman Sachs then subtracted from the range of illustrative enterprise values it derived for the pro forma combined company the pro forma net debt for the combined company as of June 30, 2019, as provided by management of PDC, and added to such range the estimated present value of the unconditional contingent payment to be made to PDC in connection with the sale of its midstream assets, as provided by the management of PDC, in each case as approved for Goldman Sachs' use by the management of SRC, to derive a range of illustrative equity values for the pro forma combined company. Goldman Sachs then divided the range of illustrative equity values it derived by the number of fully diluted outstanding shares of the pro forma combined company, as provided by management of PDC and approved for Goldman Sachs' use by the management of SRC, to derive a range of illustrative values per share of PDC common stock pro forma for the merger. Goldman Sachs then calculated a range of illustrative implied values for the pro forma value to be received per share of SRC common stock pursuant to the merger agreement by multiplying the range of implied values per share of PDC common stock pro forma for the merger derived from the above analysis by the exchange ratio. This analysis resulted in a range of illustrative implied values for the pro forma value to be received per share of SRC common stock pursuant to the merger agreement of $3.86 to $7.28.

        Illustrative Net Asset Value Analysis—SRC.    Goldman Sachs performed an illustrative net asset value analysis of SRC. Goldman Sachs calculated indications of the present value of the after-tax future cash flows that SRC could be expected to generate from its existing proved developed reserves, its development plan for proved undeveloped reserves and development of additional undeveloped reserves using the SRC Forecasts. Goldman Sachs calculated indications of net present values of the after-tax cash flows for SRC using discount rates ranging from 7.5% to 9.0%, reflecting an estimate of SRC's weighted average cost of capital. Goldman Sachs then calculated indications of SRC's illustrative net asset value by adding to the indications of the pre-tax future cash flows for such reserves (i) the present value of estimated mark to

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market commodity hedges, and subtracting (ii) (A) the present value of general and administrative costs, (B) the estimated face value of SRC's net debt as of June 30, 2019 and (C) the present value of taxes payable by SRC, calculated using the SRC Forecasts and SRC's net debt provided by the management of SRC for Goldman Sachs' use and by applying discount rates ranging from 7.5% to 9.0%, reflecting an estimate of SRC's weighted average cost of capital. Goldman Sachs derived such discount rates by application of CAPM, which requires certain company-specific inputs, including the company's target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis implied an illustrative range of net asset values per share of SRC common stock from $4.11 to $5.16.

        Illustrative Net Asset Value Analysis—PDC Standalone.    Goldman Sachs performed an illustrative net asset value analysis of PDC. Goldman Sachs calculated indications of the present value of the after-tax future cash flows that PDC could be expected to generate from its existing proved developed reserves, its development plan for proved undeveloped reserves and development of additional undeveloped reserves using the PDC Forecasts. Goldman Sachs calculated indications of net present values of the after-tax cash flows for PDC using discount rates ranging from 7.5% to 9.0%, reflecting an estimate of PDC's weighted average cost of capital. Goldman Sachs then calculated indications of PDC's illustrative net asset value by adding to the indications of the pre-tax future cash flows for such reserves (i) (A) the present value of estimated mark to market commodity hedges and (B) the present value of net operating losses and subtracting (ii) (A) the present value of general and administrative costs, (B) the estimated face value of PDC's net debt as of June 30, 2019, (C) the present value of taxes payable by PDC and (D) certain contingent payments due by PDC, calculated using the PDC Standalone Forecasts, PDC's estimated net operating loss balance and PDC's net debt provided by the management of PDC, as approved for Goldman Sachs' use by SRC management, and by applying discount rates ranging from 7.5% to 9.0%, reflecting an estimate of PDC's weighted average cost of capital. Goldman Sachs derived such discount rates by application of CAPM, which requires certain company-specific inputs, including the company's target capital structure weightings, the cost of long-term debt, after-tax yield on permanent excess cash, if any, future applicable marginal cash tax rate and a beta for the company, as well as certain financial metrics for the United States financial markets generally. This analysis implied an illustrative range of net asset values per share of PDC common stock from $24.65 to $29.97.

        Illustrative Present Value of Future Share Price Analysis—SRC.    Goldman Sachs performed an illustrative analysis of the implied present values of illustrative future values per share of SRC common stock, which is designed to provide an indication of the present value of a theoretical future value of a company's equity as a function of such company's financial multiples. Goldman Sachs calculated the implied values per share of SRC common stock as of December 31 for each of the years 2020 to 2023, by applying a range of illustrative one-year forward EV/EBITDA multiples of 3.0x to 4.5x to estimated EBITDA for SRC for each of the years 2021 to 2024, as reflected in the SRC Forecasts (which we refer to for purposes of this section as the "2021 SRC EBITDA Estimate", the "2022 SRC EBITDA Estimate", "2023 SRC EBITDA Estimate" and the "2024 SRC EBITDA Estimate", respectively). The illustrative EV/EBITDA multiple range for SRC was derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EBITDA multiples implied by trading prices for shares of SRC common stock (and estimates of next-twelve-months EBITDA as reported by IBES) over certain prior periods. Goldman Sachs then discounted to present value as of June 30, 2019, using an illustrative discount rate of 8.6%, reflecting an estimate of SRC's cost of equity, the range of illustrative equity values it derived for SRC as of December 31 for each of 2020 to 2023. Goldman Sachs then divided the range of illustrative present equity values it derived for SRC by the number of fully diluted outstanding shares of SRC common stock, as provided by management of SRC. This analysis resulted in a range of illustrative implied present values per share of SRC common stock of (i) $2.62 to $5.26 using the 2021 SRC EBITDA Estimate, (ii) $2.53 to $4.93 using the 2022 SRC

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EBITDA Estimate, (iii) $3.51 to $6.16 using the 2023 SRC EBITDA Estimate and (iv) $3.48 to $6.06 using the 2024 SRC EBITDA Estimate.

        Illustrative Present Value of Future Share Price Analysis—PDC Standalone.    Goldman Sachs performed an illustrative analysis of the implied present values of illustrative future values per share of PDC common stock. Goldman Sachs calculated the implied values per share of PDC common stock as of December 31 for each of the years 2020 to 2023, by applying a range of illustrative one-year forward EV/EBITDA multiples of 2.5x to 4.0x to estimated EBITDA for PDC for each of the years 2021 to 2024, as reflected in the PDC Standalone Forecasts (which we refer to for purposes of this section as the "2021 PDC EBITDA Estimate", the "2022 PDC EBITDA Estimate", "2023 PDC EBITDA Estimate" and the "2024 PDC EBITDA Estimate", respectively). The illustrative EV/EBITDA multiple range for PDC was derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EBITDA multiples implied by trading prices for shares of PDC common stock (and estimates of next-twelve-months EBITDA as reported by IBES) over certain prior periods. Goldman Sachs then discounted to present value as of June 30, 2019, using an illustrative discount rate of 8.6%, reflecting an estimate of PDC's cost of equity, the range of illustrative equity values it derived for PDC as of December 31 for each of 2020 to 2023. Goldman Sachs then divided the range of illustrative present equity values it derived for PDC by the number of fully diluted outstanding shares of PDC common stock, as provided by management of PDC. This analysis resulted in a range of illustrative implied present values per share of PDC common stock of (i) $20.31 to $40.58 using the 2021 PDC EBITDA Estimate, (ii) $23.51 to $45.23 using the 2022 PDC EBITDA Estimate, (iii) $24.87 to $46.65 using the 2023 PDC EBITDA Estimate and (iv) $24.73 to $44.87 using the 2024 PDC EBITDA Estimate.

        Illustrative Present Value of Future Share Price Analysis—Implied Valuation Uplift.    Goldman Sachs performed an illustrative analysis of the implied present values of illustrative future values per share of the combined company on a pro forma basis and calculated the implied valuation uplift per share of SRC common stock upon consummation of the merger. Goldman Sachs calculated the implied values per share of the combined company on a pro forma basis as of December 31 for each of the years 2020 to 2023, by applying a range of illustrative one-year forward EV/EBITDA multiples of 2.75x to 4.25x to estimated EBITDA for the pro forma combined company for each of the years 2021 to 2024, as reflected in the Pro Forma Forecasts (which we refer to for purposes of this section as the "2021 Pro Forma EBITDA Estimate", the "2022 Pro Forma EBITDA Estimate", the "2023 Pro Forma EBITDA Estimate" and the "2024 Pro Forma EBITDA Estimate", respectively). The illustrative EV/EBITDA multiple range for the pro forma combined company was derived by Goldman Sachs using its professional judgment and experience, taking into account, among other things, EBITDA multiples implied by trading prices of shares of SRC common stock and shares of PDC common stock (and estimates of next-twelve-months EBITDA for SRC and PDC as reported by IBES) over certain prior periods. Goldman Sachs then discounted to present value as of June 30, 2019, using an illustrative discount rate of 8.6%, reflecting an estimate of the pro forma combined company's cost of equity, the range of illustrative equity values it derived for the shares of the pro forma combined company as of December 31 for each of 2020 to 2023. Goldman Sachs then divided the range of illustrative present equity values it derived for the shares of the pro forma combined company by the number of fully diluted outstanding shares for the pro forma combined company, as provided by management of PDC and approved for Goldman Sachs' use by the management of SRC. Goldman Sachs then calculated a range of illustrative implied values for the pro forma value to be received per share of SRC common stock pursuant to the merger agreement by multiplying the range of implied values per share of the pro forma combined company derived from the above analysis by the exchange ratio. This analysis resulted in a range of illustrative implied values for the pro forma value to be received per share of SRC common stock pursuant to the merger agreement of (i) $3.36 to $6.47 using the 2021 Pro Forma EBITDA Estimate, (ii) $3.84 to $6.99 using the 2022 Pro Forma EBITDA Estimate, (iii) $4.07 to $7.16 using the 2023 Pro Forma EBITDA Estimate and (iv) $4.30 to $7.24 using the 2024 Pro Forma EBITDA Estimate.

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        Premia Analysis.    Using publicly available information, Goldman Sachs reviewed and analyzed the acquisition premia (discounts) for U.S. E&P transactions announced from January 1, 2009 through August 23, 2019 involving a public target company where the disclosed transaction value was between $1 billion and $10 billion.

        For the entire period, using publicly available information, Goldman Sachs calculated the premia (discount) of the price paid in each of the all-stock U.S. E&P acquisition transactions relative to the target company's last closing stock price prior to announcement of the transaction. This analysis indicated a range of illustrative premia (discount) of (2.0)% to 37.7%. Goldman Sachs then applied this reference range of illustrative premia (discount) to the closing price per share of SRC common stock as of the last trading date to calculate an illustrative range of implied prices per share of SRC common stock of $3.89 to $5.47.

        The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs' opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the above analyses as a comparison is directly comparable to SRC or PDC or the merger.

        Goldman Sachs prepared these analyses for purposes of Goldman Sachs' providing its opinion to the SRC board as to the fairness from a financial point of view of the exchange ratio pursuant to the merger agreement to the holders (other than PDC and its affiliates) of shares of SRC common stock. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of SRC, PDC, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

        The exchange ratio was determined through arm's-length negotiations between SRC and PDC and was approved by the SRC board. Goldman Sachs provided advice to SRC during these negotiations. Goldman Sachs did not, however, recommend any specific exchange ratio to SRC or its board of directors or that any specific exchange ratio constituted the only appropriate exchange ratio for the merger.

        As described above, Goldman Sachs' opinion to the SRC board was one of many factors taken into consideration by the SRC board in making its determination to approve the merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion and is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Annex D.

        Goldman Sachs and its affiliates are engaged in advisory, underwriting and financing, principal investing, sales and trading, research, investment management and other financial and non-financial activities and services for various persons and entities. Goldman Sachs and its affiliates and employees, and funds or other entities they manage or in which they invest or have other economic interests or with which they co-invest, may at any time purchase, sell, hold or vote long or short positions and investments in securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments of SRC, PDC, any of their respective affiliates and third parties, or any currency or commodity that may be involved in the merger. Goldman Sachs acted as financial advisor to SRC in connection with, and participated in certain of the negotiations leading to, the merger. In addition, Goldman Sachs has provided certain financial advisory and/or underwriting services to PDC and/or its

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affiliates from time to time for which the investment banking division of Goldman Sachs has received, and may receive, compensation, including having acted as co-manager with respect to PDC's offering of 5.75% senior unsecured notes due 2026 (aggregate principal amount $600,000,000) in November 2017. During the two-year period ended August 25, 2019, Goldman Sachs has recognized compensation for financial advisory and/or underwriting services provided by its Investment Banking Division to PDC and/or its affiliates of approximately $60,000. During the two-year period ended August 25, 2019, the Investment Banking Division of Goldman Sachs has not been engaged by SRC or its affiliates to provide financial advisory or underwriting services for which Goldman Sachs has recognized compensation. Goldman Sachs may also in the future provide financial advisory and/or underwriting services to SRC, PDC and their respective affiliates for which the Investment Banking Division of Goldman Sachs may receive compensation.

        The SRC board selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the merger. Pursuant to a letter agreement dated August 7, 2019 (as amended August 25, 2019), SRC engaged Goldman Sachs to act as its financial advisor in connection with the merger. The engagement letter between SRC and Goldman Sachs provides for a transaction fee of $12 million, approximately $9 million of which is contingent upon consummation of the transaction. Goldman Sachs may receive an additional fee of up to $3.5 million at SRC's sole discretion. In addition, SRC has agreed to reimburse Goldman Sachs for certain of its expenses, including attorneys' fees and disbursements, and to indemnify Goldman Sachs and related persons against various liabilities, including certain liabilities under the federal securities laws.

Certain Unaudited Forecasted Financial Information

        PDC, as a matter of course, does not publicly disclose long-term projections as to future revenues, earnings or other results given, among other reasons, the uncertainty, unpredictability and subjectivity of the underlying assumptions and estimates. However, certain non-public financial forecasts covering several years that were prepared by PDC's management were provided to its board and to SRC in connection with each company's evaluations of the merger and to each company's financial advisor(s) for their use in advising their respective clients and reliance in connection with their respective financial analyses and opinions as described under "The Merger—Opinion of J.P. Morgan, PDC's Financial Advisor" and "The Merger—Opinions of Citi and Goldman Sachs, SRC's Financial Advisors" beginning on pages 79 and 90. The forecasted financial information included in this document that was prepared by PDC's management was not prepared with a view toward compliance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of forecasted financial information.

        SRC does not as a matter of course make public forecasts as to future sales, earnings, or other results. However, the management of SRC has prepared the forecasted financial information set forth below and provided it to the SRC board and to PDC in connection with each company's evaluations of the merger and to each company's financial advisor(s) for their use in advising their respective clients and reliance in connection with their respective financial analyses and opinions as described under "The Merger—Opinion of J.P. Morgan, PDC's Financial Advisor" and "The Merger—Opinions of Citi and Goldman Sachs, SRC's Financial Advisors" beginning on pages 79 and 90. The accompanying forecasted financial information prepared by SRC's management was not prepared with a view toward public disclosure or with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to forecasted financial information, but, in the view of SRC's management, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management's knowledge and belief, the expected course of action and the expected future financial performance of SRC. However, this information is not fact and should not be relied upon as being necessarily indicative of future results, and readers of this joint proxy statement/prospectus are cautioned not to place undue reliance on the forecasted financial information.

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        The inclusion of this information should not be regarded as an indication that either company or its board, affiliates, officers, directors, advisors or other representatives or any other person considered, or now considers, the forecasted financial information to be necessarily predictive of actual future events or results of either company's operations and should not be relied upon as such. The internal financial forecasts upon which the forecasted financial information was based are subjective in many respects. There can be no assurance that the forecasted financial information will be realized or that actual results will not be significantly higher or lower than forecasted. The forecasted financial information covers several years and such information by its nature becomes less predictive with each successive year. As a result, the inclusion of the forecasted financial information in this joint proxy statement/prospectus should not be relied on as necessarily predictive of actual future events.

        The forecasted financial information included in this document has been prepared by, and is the responsibility of, PDC's management and SRC's management. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the accompanying forecasted financial information and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporated by reference in this document relates to PDC's previously issued financial statements. It does not extend to the forecasted financial information and should not be read to do so.

        Neither Deloitte & Touche LLP, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the forecasted financial information contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the forecasted financial information.

        The forecasted financial information was based on numerous variables and assumptions that were deemed reasonable as of the respective dates when such projections were finalized. However, such assumptions are inherently uncertain and difficult or impossible to predict or estimate and most of them are beyond PDC's or SRC's control. Assumptions that were used in developing the forecasted financial information include, but are not limited to: no unannounced acquisitions, no major changes in the regulatory environment and no major unanticipated changes in the availability of midstream infrastructure and services. The forecasted financial information also reflects assumptions regarding the continuing nature of certain business decisions that, in reality, would be subject to change.

        Important factors that may affect actual results and cause the forecasted financial information not to be achieved include, but are not limited to, risks and uncertainties relating to PDC's and SRC's businesses (including the ability to achieve strategic goals, objectives and targets), commodity prices, midstream capacity, the legal and regulatory environment, prevailing interest rates, general business and economic conditions and other factors described in this joint proxy statement/prospectus or described or referenced in PDC's and SRC's filings with the SEC, including each of PDC's and SRC's Annual Reports on Form 10-K for the fiscal year ended December 31, 2018, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. This information constitutes "forward-looking statements" and actual results may differ materially and adversely from those projected. For more information, see the section entitled "Cautionary Statement Regarding Forward-Looking Statements" beginning on page 53. In addition, the forecasted financial information reflects assumptions that are subject to change and does not reflect revised prospects for PDC's or SRC's respective businesses, changes in general business or economic conditions, or any other transaction or event that has occurred or that may occur and that was not anticipated at the time the forecasted financial information was prepared.

        Each company's forecasted financial information was developed through such company's customary strategic planning and budgeting process utilizing reasonable available estimates and judgments at the time of its preparation. Each company's forecasted financial information was developed on a standalone basis without giving effect to the merger on such company, and therefore, except as

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otherwise noted below, the forecasted financial information does not give effect to the merger or any changes to the combined company's operations or strategy that may be implemented after the effective time of the merger if the merger is completed. Furthermore, the forecasted financial information does not take into account the effect of any failure of the merger to be completed and should not be viewed in that context.

        Accordingly, there can be no assurance that the forecasted financial information will be realized or that PDC's future financial results will not vary materially from the forecasted financial information. None of PDC, SRC nor any of their respective affiliates, officers, directors, advisors or other representatives can give any assurance that actual results will not differ from the PDC forecasted financial information, and none of PDC, SRC, or any of their respective affiliates undertakes any obligation to update or otherwise revise or reconcile the forecasted financial information to reflect circumstances existing or developments and events occurring after the date of the forecasted financial information or that may occur in the future, even in the event that any or all of the assumptions underlying the forecasted financial information are not realized. Neither PDC nor SRC intends to make available publicly any update or other revision to the forecasted financial information, except as otherwise required by applicable law. None of PDC, SRC or any of their respective affiliates, officers, directors, advisors or other representatives has made or makes any representation to any PDC stockholder or SRC shareholder or any other person regarding the ultimate performance of PDC or SRC compared to the information contained in the forecasted financial information or that the forecasted financial information will be achieved.

        In light of the foregoing factors and the uncertainties inherent in the forecasted financial information, PDC stockholders and SRC shareholders are cautioned not to place undue, if any, reliance on the information presented in this summary of the forecasted financial information.

Summary of Certain PDC Forecasted Financial Information

        In preparing the forecasted financial and operating information for PDC and SRC described below, the management team of PDC used the price assumptions set forth in the below tables, which are based on Wall Street consensus pricing and NYMEX oil and gas strip pricing, in each case as of August 22, 2019. In addition, the management team of PDC used internal flat pricing assumptions based on $55/bbl oil and $2.70/MMbtu gas.

 
  Wall Street Consensus Pricing  
 
  2019E   2020E   2021E  

Commodity Prices

                   

Oil ($/bbl)

  $ 58.00   $ 59.75   $ 60.00  

Gas ($/MMbtu)

  $ 2.76   $ 2.75   $ 2.83  

 

 
  NYMEX Oil and Gas Strip Pricing  
 
  2019E   2020E   2021E  

Commodity Prices

                   

Oil ($/bbl)

  $ 57.64   $ 53.09   $ 51.31  

Gas ($/MMbtu)

  $ 2.50   $ 2.37   $ 2.41  

        PDC Management Projections for PDC.    The following tables present select unaudited forecasted financial and operating information of PDC for the fiscal years ending 2019 through 2021 prepared by PDC's management and provided to the PDC board and PDC's financial advisor, which is referred to as the "PDC unaudited forecasted financial and operating information." As described above, the PDC

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unaudited forecasted financial and operating information is based on commodity pricing assumptions as of August 22, 2019.

 
  Unaudited Financial and Operating
Forecast with Wall Street
Consensus Pricing
 
 
  2019E   2020E   2021E  

Adjusted EBITDAX ($mm)

  $ 904   $ 1,123   $ 1,243  

Operating Cash Flow ($mm)

  $ 841   $ 1,066   $ 1,186  

Capital Expenditures ($mm)

  $ (820 ) $ (883 ) $ (973 )

 

 
  Unaudited Financial and Operating
Forecast with NYMEX Oil and Gas
Strip Pricing
 
 
  2019E   2020E   2021E  

Adjusted EBITDAX ($mm)

  $ 901   $ 1,007   $ 1,015  

Operating Cash Flow ($mm)

  $ 838   $ 950   $ 958  

Capital Expenditures ($mm)

  $ (820 ) $ (883 ) $ (973 )

 

 
  Unaudited Financial and Operating
Forecast with Flat Pricing
 
 
  2019E   2020E   2021E  

Adjusted EBITDAX ($mm)

  $ 890   $ 1,048   $ 1,119  

Operating Cash Flow ($mm)

  $ 826   $ 991   $ 1,063  

Capital Expenditures ($mm)

  $ (820 ) $ (883 ) $ (973 )

        PDC Management Projections for SRC.    PDC management also provided to the PDC board and to J.P. Morgan for J.P. Morgan's use and reliance in connection with its financial analyses and opinion certain unaudited forecasted financial and operating information with respect to SRC, which originated from the information provided by SRC management and summarized in this joint proxy statement/prospectus under the caption "—Certain SRC Unaudited Forecasted Financial Information," and was adjusted by PDC management to reflect certain anticipated changes in operations on SRC's properties following the completion of the merger. The following tables sets forth a summary of this adjusted forecasted financial and operating information regarding SRC for the years 2019 through 2021 as prepared by PDC management.

 
  Unaudited Financial and Operating
Forecast with Wall Street
Consensus Pricing
 
 
  2H 2019E   2020E   2021E  

Adjusted EBITDAX ($mm)

  $ 216   $ 586   $ 631  

Operating Cash Flow ($mm)

  $ 197   $ 549   $ 596  

Capital Expenditures ($mm)

  $ (120 ) $ (379 ) $ (336 )

 

 
  Unaudited Financial and Operating
Forecast with NYMEX Oil and Gas
Strip Pricing
 
 
  2H 2019E   2020E   2021E  

Adjusted EBITDAX ($mm)

  $ 209   $ 491   $ 501  

Operating Cash Flow ($mm)

  $ 189   $ 454   $ 465  

Capital Expenditures ($mm)

  $ (120 ) $ (379 ) $ (336 )

 

 
  Unaudited Financial and Operating
Forecast with Flat Pricing
 
 
  2H 2019E   2020E   2021E  

Adjusted EBITDAX ($mm)

  $ 196   $ 529   $ 563  

Operating Cash Flow ($mm)

  $ 176   $ 492   $ 527  

Capital Expenditures ($mm)

  $ (120 ) $ (379 ) $ (336 )

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        The selected unaudited forecasted financial numbers shown in the tables above are not measures that have a standardized meaning prescribed by GAAP and may not be comparable with similar measures presented by other issuers. For purposes of the unaudited forecasted financial information presented above, Adjusted EBITDAX is defined as earnings before interest, taxes, depreciation, amortization and exploration expenses. Operating Cash Flow is defined as Adjusted EBITDAX less interest, taxes and exploration expense plus asset retirement obligations.

        PDC DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE ABOVE UNAUDITED FINANCIAL AND OPERATING FORECASTS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH UNAUDITED FINANCIAL AND OPERATING FORECASTS ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW.

Summary of Certain SRC Forecasted Financial Information

        In preparing the forecasted financial and operating information for SRC described below, the management team of SRC used the price assumptions set forth in the below tables, which are based on Wall Street consensus pricing and NYMEX oil and gas strip pricing, in each case as of August 9, 2019.

 
  Wall Street Consensus Pricing  
 
  2019E   2020E   2021E  

Commodity Prices

                   

Oil ($/bbl)

  $ 56.03   $ 60.25   $ 63.00  

Gas ($/MMbtu)

  $ 2.48   $ 2.80   $ 3.00  

 

 
  NYMEX Oil and Gas Strip Pricing  
 
  2019E   2020E   2021E  

Commodity Prices

                   

Oil ($/bbl)

  $ 56.01   $ 52.03   $ 50.77  

Gas ($/MMbtu)

  $ 2.46   $ 2.39   $ 2.48  

        SRC Management Projections for SRC.    The following tables present select unaudited forecasted financial and operating information of SRC for the fiscal years ending 2019 through 2021 prepared by SRC's management and provided to the SRC board and SRC's financial advisors, which is referred to as the "SRC unaudited forecasted financial and operating information." As described above, the SRC unaudited forecasted financial and operating information is based on commodity pricing assumptions as of August 9, 2019.

 
  Unaudited Financial and
Operating Forecast with Wall
Street Consensus Pricing
 
 
  2019E   2020E   2021E  

EBITDA ($mm)

  $ 508   $ 580   $ 669  

Operating Cash Flow ($mm)

  $ 465   $ 537   $ 631  

Capital Expenditures ($mm)

  $ (418 ) $ (463 ) $ (369 )

 

 
  Unaudited Financial and
Operating Forecast with NYMEX
Oil and Gas Strip Pricing
 
 
  2019E   2020E   2021E  

EBITDA ($mm)

  $ 508   $ 469   $ 497  

Operating Cash Flow ($mm)

  $ 465   $ 424   $ 453  

Capital Expenditures ($mm)

  $ (418 ) $ (463 ) $ (369 )

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        Projections for PDC.    SRC management also provided to the SRC board and to Citi and Goldman Sachs for their use and reliance in connection with each financial advisor's financial analyses and opinion certain unaudited forecasted financial and operating information with respect to PDC that was provided by PDC management and summarized in this joint proxy statement/prospectus under the caption "—Summary of Certain PDC Forecasted Financial Information."

        The selected unaudited forecasted financial numbers shown in the tables above are not measures that have a standardized meaning prescribed by GAAP and may not be comparable with similar measures presented by other issuers. For purposes of the unaudited forecasted financial information presented above, EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Operating Cash Flow is defined as EBITDA less interest and cash taxes, if any.

        SRC DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE ABOVE UNAUDITED FINANCIAL AND OPERATING FORECASTS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IN THE EVENT THAT ANY OR ALL OF THE ASSUMPTIONS UNDERLYING SUCH UNAUDITED FINANCIAL AND OPERATING FORECASTS ARE NO LONGER APPROPRIATE, EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW.

Regulatory Approvals

        The completion of the merger is subject to the receipt of antitrust clearance in the United States. Under the HSR Act and the rules promulgated thereunder, the merger may not be completed until notification and report forms have been filed with the United States Federal Trade Commission ("FTC") and the Antitrust Division of the United States Department of Justice ("Antitrust Division"), and the applicable waiting period (or any extensions of such waiting period) has expired or been terminated. For additional information regarding regulatory approvals in connection with the merger, see the section entitled "The Merger Agreement—HSR and Other Regulatory Approvals" beginning on page 145.

        On September 9, 2019, PDC and SRC filed their respective notification and report forms with the FTC and the Antitrust Division. Neither PDC nor SRC is aware of any material governmental approvals or actions that are required for completion of the merger other than as described above. It is presently contemplated that if any such additional material governmental approvals or actions are required, those approvals or actions will be sought.

        At any time before or after the expiration of the statutory waiting periods under the HSR Act, the Antitrust Division or the FTC may take action under the antitrust laws, including seeking to enjoin the completion of the merger, to rescind the merger or to conditionally permit completion of the merger subject to regulatory conditions or other remedies. In addition, non-U.S. regulatory bodies and U.S. state attorneys general could take action under the antitrust laws as they deem necessary or desirable in the public interest, including, without limitation, seeking to enjoin the completion of the merger or permitting completion subject to regulatory conditions. There can be no assurance that regulatory authorities will not impose conditions on the completion of the merger or require changes to the terms of the transaction. Private parties may also seek to take legal action under the antitrust laws under some circumstances. There can be no assurance that a challenge to the merger on antitrust grounds will not be made or, if such a challenge is made, that it would not be successful.

Interests of PDC Directors and Executive Officers in the Merger

        None of PDC's directors or executive officers is a party to, or participates in any, PDC plan, program or arrangement that provides such director or executive officer with any kind of compensation that is based on or otherwise relates to the completion of the merger.

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Board of Directors and Management of PDC Following Completion of the Merger

        In connection with the merger, PDC and SRC have agreed that two SRC Designees, to be mutually agreed by PDC and SRC, will be appointed to the PDC board simultaneously with the effectiveness of the merger. PDC and SRC expect the SRC Designees to be Lynn A. Peterson and Paul J. Korus, with Mr. Peterson to serve as a Class I director with a term ending at the annual PDC stockholders meeting in 2020, and Mr. Korus to serve as a Class III director with a term ending at the annual PDC stockholders meeting in 2022. The final determination of the SRC Designees is subject to final agreement among the companies after consideration of independence and other factors. The closing of the merger is not expected to result in other changes to the PDC board or executive management. PDC will continue to be headquartered in Denver, Colorado.

Interests of SRC Directors and Executive Officers in the Merger

        In considering the recommendation of the SRC board, SRC shareholders should be aware that the directors and executive officers of SRC have certain interests in the merger that may be different from, or in addition to, the interests of SRC shareholders generally. The SRC board was aware of these interests and considered them, among other matters, in making its recommendation that SRC shareholders vote to approve the SRC merger proposal.

Treatment of SRC Equity-Based Awards

        SRC RSU Awards.    Immediately prior to the effective time of the merger, each then outstanding RSU award in respect of shares of SRC common stock, whether vested or unvested, will become fully vested and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award as of immediately prior to the effective time of the merger (less required tax withholdings).

        SRC PSU Awards.    Except for the New PSU awards, immediately prior to the effective time of the merger, each then outstanding Current PSU award in respect of shares of SRC common stock, whether vested or unvested, will become automatically vested at the target (i.e., 100%) level and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award at target (less required tax withholdings). Any Current PSUs that do vest as described above (i.e., any Current PSUs that would have been earned if performance was achieved in excess of target) will be cancelled for no consideration.

        New SRC PSU Awards.    In addition, prior to the effective time of the merger, SRC will grant New PSU awards to the executive officers and in the target amounts set forth in the table at the end of this section. Immediately prior to the effective time of the merger, each then outstanding New PSU award will be assumed or substituted by PDC and converted automatically into a performance stock unit award of PDC, subject to the same terms and conditions. The number of shares of PDC common stock covered by such assumed awards will be based on the number of SRC shares covered by such awards multiplied by the exchange ratio in the merger.

        New PSU awards will vest between 0% - 200% of the target number of shares covered by the awards based on the relative total shareholder return ("TSR") of PDC measured over the period January 1, 2019 - December 31, 2021 (or, if earlier, a change in control of PDC) as compared to a peer group of 14 companies. Specifically:

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        SRC Options.    Immediately prior to the effective time of the merger, each then outstanding option to purchase shares of SRC common stock will, whether vested or unvested, become fully vested, and each such option that is "in the money" relative to the per-share value of the merger consideration as determined pursuant to the merger agreement will be cancelled and converted into the right to receive the merger consideration with respect to a number of shares of SRC common stock based on the exercise price of the option relative to the per-share value of the merger consideration as determined pursuant to the merger agreement (less required tax withholdings). Immediately prior to the effective time of the merger, each then outstanding option that is "out of the money" relative to the per-share value of the merger consideration as determined pursuant to the merger agreement will be cancelled in exchange for no consideration.

        SRC Stock Bonus Awards.    Immediately prior to the effective time of the merger, each then outstanding Stock Bonus award, whether vested or unvested, will become fully vested and will be cancelled and converted into the right to receive the merger consideration in respect of each share of SRC common stock subject to the award (less required tax withholdings).

        The following table sets forth for each executive officer of SRC and for each non-employee director of SRC, the anticipated aggregate number of shares of SRC common stock issuable pursuant to awards of RSUs, Current PSUs, "in the money" Stock Options, and Stock Bonus in each case that

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vest as a result of the merger, as well as the target number of New PSUs issuable, assuming closing of the merger on December 4, 2019:

Name
  RSUs (#)   Current
PSUs (#)
  "in the
money"
Stock Options
(#)
  Stock Bonus
(#)
  New PSUs (#)  

Executive Officers

                               

Lynn Peterson

    501,097     846,906             423,453  

James Henderson

    200,721     336,403             168,202  

Cathleen Osborn

    98,643     166,216         10,000     83,108  

Nick Spence

    98,643     166,216         10,000     83,108  

Mike Eberhard

    98,643     166,216         10,000     83,108  

Non-Employee Directors

   
 
   
 
   
 
   
 
   
 
 

Jack Aydin

    16,632                  

Daniel E. Kelly

    16,632                  

Paul Korus

    16,632                  

Raymond E. McElhaney

    16,632                  

Jennifer Zucker

    16,632                  

Annual Incentive Compensation

        Annual incentive awards for 2019 are paid at target at the earlier of the effective time of the merger and the time that they are normally paid, and if the merger occurs after December 31, 2019, executive officers may be entitled to pro-rated annual bonuses for 2020 as described in more detail below. Annual incentive awards are generally payable in the ordinary course of business, although they may be paid at levels that are less than or greater than the target level established by the merger agreement, and are generally conditioned on the individual remaining employed through the end of the relevant fiscal year and until the date of payment. If the effective time of the merger occurs after December 31, 2019, SRC may pay annual cash bonuses in respect of fiscal year 2020 as of immediately prior to the effective time of the merger, prorated based on a fraction, the numerator of which is the number of days between January 1, 2020 and the closing date and the denominator of which is 365, with performance determined based on actual performance through the effective time of the merger.

Transaction Bonuses

        SRC may grant Transaction Bonuses to SRC's executive officers and other employees, and to SRC's non-employee directors in an aggregate amount not to exceed $4,843,000 (of which no more than $4,693,000 will be allocated to employees and no more than $150,000 may be allocated to non-employee directors, which is up to approximately $37,500 per such director). The SRC board has yet to determine to whom, and in what amounts, it will issue transaction bonuses.

Executive Officer Severance Arrangements

        SRC has entered into an employment agreement with Mr. Peterson, its CEO, and severance compensation agreements with the remainder of its executive officers, which provide certain enhanced severance compensation and benefits upon a qualifying termination within a specified period of time following the merger (12 months for Mr. Peterson and 18 months for the other executive officers), as follows:

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