ACQUISITIONS

The following table presents the adjusted purchase price and the allocations thereof, based on our estimates of fair value, for the acquisition of crude oil and natural gas properties during 2012 and 2011:



	Year Ended December 31,
	2012		2011
	Merit		Seneca-Upshur		2003/2002-D Partnerships		2005 Partnerships
	(in thousands)

Total acquisition cost	$	304,643	$	69,618	$	29,960	$	43,015

Recognized amounts of identifiable assets acquired and liabilities assumed:
Assets acquired:
Crude oil and natural gas properties - proved	$	180,696	$	20,175	$	27,940	$	39,825
Crude oil and natural gas properties - unproved	151,428		49,100		—		—
Other assets	3,631		10,196		3,455		3,848
Total assets acquired	335,755		79,471		31,395		43,673
Liabilities assumed:
Asset retirement obligation	14,833		8,157		497		300
Other accrued expenses	9,574		—		—		—
Other liabilities	6,705		1,696		938		358
Total liabilities assumed	31,112		9,853		1,435		658
Total identifiable net assets acquired	$	304,643	$	69,618	$	29,960	$	43,015

The fair value measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and therefore represent Level 3 inputs. The fair values of oil and natural gas properties and asset retirement obligations were measured using valuation techniques that convert future cash flows to a single discounted amount. Significant inputs to the valuation of oil and natural gas properties include estimates of reserves, future operating and development costs, future commodity prices, estimated future cash flows and a market-based weighted-average cost of capital rate. These inputs require significant judgments and estimates by management at the time of the valuation and are sensitive and subject to change.

2012 Acquisitions

Merit Acquisition. In June 2012, we completed the acquisition of certain Wattenberg Field oil and natural gas properties, leasehold mineral interests and related assets located in Weld, Adams and Boulder Counties, Colorado from affiliates of Merit Energy. The aggregate purchase price of these properties was approximately $304.6 million. We financed the purchase with cash from the May 2012 offering of our common stock and a draw on our revolving credit facility.

This acquisition was accounted for under the acquisition method of accounting. Accordingly, we conducted assessments of net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisition were expensed as incurred.

Pro Forma Information. The results of operations for the Merit Acquisition have been included in our consolidated financial statements since the June 2012 closing date. The following unaudited pro forma financial information presents a summary of the consolidated results of operations for the years ended December 31, 2012 and December 31, 2011, assuming the Merit Acquisition had been completed as of January 1, 2011, including adjustments to reflect the values assigned to the net assets acquired. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the Merit Acquisition had been effective as of these dates, or of future results.



	Year Ended December 31,
	2012			2011
	(in thousands, except per share amounts)

Total revenues	$	370,488		$	438,204
Total costs, expenses and other	521,178			366,120
Net income (loss)	$	(119,343	)	$	45,688

Earnings per share:
Basic	$	(4.31	)	$	1.94
Diluted	$	(4.31	)	$	1.91

2011 Acquisitions

Seneca-Upshur. In October 2011, PDCM acquired 100% of the membership interests of Seneca-Upshur for $139.2 million ($69.6 million net to PDC), after post-closing adjustments, which was funded by capital contributions by PDCM's investing partners and a draw on PDCM's revolving credit facility. Substantially all of the acreage acquired is held by production, prospective for the Marcellus Shale and is in close proximity to PDCM's existing properties. PDCM received title defect payments during 2012 totaling $28.9 million, of which $14.5 million represents our share, the effect of which is reflected in the purchase price noted above.

2003/2002-D Partnerships. In October 2011, we acquired from non-affiliated investor partners the interests we did not already own in five of our affiliated partnerships: PDC 2002-D Limited Partnership, PDC 2003-A Limited Partnership, PDC 2003-B Limited Partnership and PDC 2003-C Limited Partnership (the "2002/2003 Partnerships"). We purchased the 2002/2003 Partnerships for an aggregate amount of $30 million, which was funded from our revolving credit facility. These purchases included the partnerships' working interests in wells located in the Wattenberg Field and Piceance Basin.

2005 Partnerships. In June 2011, we acquired from non-affiliated investor partners the interests we did not already own in three of our affiliated partnerships: PDC 2005-A Limited Partnership, PDC 2005-B Limited Partnership and Rockies Region Private Limited Partnership (the "2005 Partnerships"). We purchased the 2005 Partnerships for an aggregate amount of $43 million, which was funded from our revolving credit facility. These purchases included the partnerships' working interests wells located in the Wattenberg Field and the Piceance Basin.

Pro Forma Information. The results of operations for the Seneca-Upshur, 2002/2003 Partnerships and 2005 Partnerships acquisitions have been included in our consolidated financial statements from the respective dates of acquisition. Pro forma information is not presented as the pro forma results would not be materially different from the information presented in the accompanying consolidated statements of operations.