On March 31, 2009, the Compensation Committee of Petroleum Development Corporation determined the short-term incentive compensation terms ("STI") for the 2009 year for the CEO and other executive officers of the Company. The short-term incentive plan provides the potential for an annual bonus to each of the executive officers based on both Company and personal performance criteria. Forty percent of the bonus will be determined by the Company's minimum liquidity target, as defined below; twenty percent of the bonus will be determined by cash flow per share; and the remaining forty percent of the bonus will be determined by the Compensation Committee in its discretion based upon an evaluation by the Committee of the performance of each respective executive during the year. Bonus determinations between the milestones will be calculated pro-rata. The following table summarizes the criteria to be used in determining the bonus amounts:

                                                            Percent of
                             Lower                            Total
                           Threshold  Target     Maximum     Maximum
               Criteria     Amount     Bonus      Bonus       Bonus
                              $10     Minimum
                Minimum     million  Liquidity $20 million
               Liquidity     below    Target      above        40%
             Cash Flow per
                 Share       $6.50     $7.80      $9.00        20%

Minimum Liquidity will be measured at December 31, 2009. The formula for measuring Minimum Liquidity is as follows: net cash provided by operating activities; minus capital expenditures; plus cash generated from dispositions; plus the actual unused revolving commitment as of December 31, 2009 on the Company's revolving bank line of credit. The Minimum Liquidity Target will be the revolving commitment under the Company's revolving bank line of credit (after redetermination of the Company's borrowing base expected in the near future and the related change in the Company's aggregate revolving commitment, if any), minus the outstanding revolving credit loan amount on December 31, 2008 ($194.5 million). The lower threshold amount will be $10 million below the Minimum Liquidity Target and the Maximum Bonus will be $20 million above the Minimum Liquidity Target.

Notwithstanding the above, for Darwin L. Stump, a named executive officer, 100% of his STI for 2009 will be at the discretion of the Compensation Committee.