Penn Virginia Corporation (NYSE:PVA) announced today that it has closed two acquisitions for $32.5 million, including one in east Texas targeting the Cotton Valley and one in Mississippi targeting the Selma Chalk.
Highlights of the transactions include the following: East Texas (Cotton Valley) -- Approximately 4,000 acres located in the Woodlawn Field of Harrison County, Texas, with a working interest of approximately 99 percent and an average net revenue interest of approximately 76 percent; -- Estimated proved reserves of 19.5 billion cubic feet of natural gas equivalent ("Bcfe"), 3.3 Bcfe of which are proved developed reserves, as well as probable or possible reserves of 10.2 Bcfe; -- Estimated 31 drilling locations, with four wells expected to be drilled in the second half of 2007; -- Current net production of approximately 1.0 million cubic feet of natural gas equivalent ("MMcfe") per day; -- In addition to the undeveloped acreage, potential upsides include down-spacing, horizontal drilling and prospective production from the Travis Peak formation; and -- Purchase price of $22.0 million was funded with cash on hand and by borrowings under the Company's revolving credit facility. Mississippi / Gwinville Field (Selma Chalk) -- Approximately 640 acres located in the Gwinville Field of Jefferson Davis County, Mississippi, with a working interest of 100 percent and an average net revenue interest of approximately 80 percent; -- Estimated proved reserves of 11.2 Bcfe, 2.3 Bcfe of which are proved developed reserves; -- Estimated 19 drilling locations, with four wells expected to be drilled in the second half of 2007; -- Current net production of approximately 0.6 MMcfe per day; -- In addition to the undeveloped acreage, potential upside includes down-spacing and horizontal drilling; and -- Purchase price of $10.5 million was funded with cash on hand and by borrowings under the Company's revolving credit facility. Management Comments
A. James Dearlove, President and Chief Executive Officer, stated, "These two acquisitions are located near our existing Cotton Valley and Selma Chalk plays and thus are consistent with our growth strategy. We believe that these acquisitions have attractive transaction economics and provide us with additional exposure to potential upside opportunities."
Headquartered in Radnor, PA and a member of the S&P SmallCap 600 Index, Penn Virginia Corporation (NYSE: PVA) is an independent natural gas and oil company focused on the exploration, acquisition, development and production of reserves in onshore regions of the U.S., including the Appalachian Basin, the Cotton Valley play in east Texas, the Selma Chalk play in Mississippi, the Mid-Continent region and the Gulf Coast of Louisiana and Texas. PVA also owns approximately 82 percent of Penn Virginia GP Holdings, L.P. (NYSE: PVG), the owner of the general partner and the largest unit holder of Penn Virginia Resource Partners, L.P. (NYSE: PVR), a manager of coal properties and related assets and the operator of a midstream natural gas gathering and processing business. For more information about PVA, please visit PVA's website at www.pennvirginia.com.
Certain statements contained herein that are not descriptions of historical facts are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the following: whether or not the Company's reserve and production estimates are accurate; integrating and managing the newly acquired oil and gas assets with the Company's existing oil and gas exploration and production business; competition from other oil and gas exploration and production companies; potential equipment malfunction and repair delays; weather related delays; the legislative or regulatory environment; and political and economic conditions, including the impact of potential terrorist acts. Additional information concerning these and other factors can be found in the Company's press releases and public periodic filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2006 and subsequently filed interim reports. Many of the factors that will determine the Company's future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
Source: Penn Virginia Corporation
Released July 2, 2007