Penn Virginia Corporation (NYSE:PVA) today announced that it has sold non-operated working interests in Virginia to Equitable Resources, Inc. for $30 million, subject to customary adjustments.
The working interests sold had proved reserves of 13.3 billion cubic feet of natural gas equivalent ("Bcfe") at January 1, 2007, net production of approximately 1.7 million cubic feet of natural gas equivalent ("MMcfe") per day during the second quarter of 2007 and are located primarily in Wise County, Virginia. The properties, in which PVA had an approximate 14 percent working interest, are currently operated by Equitable.
The net proceeds from the sale will be used to repay borrowings under PVA's revolving credit facility.
On July 2, 2007, PVA announced that it had spent $32.5 million to acquire properties in east Texas and Mississippi with estimated proved reserves of 30.7 Bcfe and net production of approximately 1.6 MMcfe per day. PVA funded this acquisition using its revolving credit facility. PVA expects to match this acquisition with the divesture of the working interests to effectuate a like-kind exchange and defer the taxes it will incur from the gain on the sale of the working interests.
A. James Dearlove, President and Chief Executive Officer, stated, "The sale of these non-core, non-operated properties has allowed us to finance most of the previously announced acquisitions of properties in our core east Texas and Mississippi areas in a tax-efficient way. We are also pleased to make this trade as we believe the strategic fit of the recently acquired assets will allow us to more actively realize their upside potential."
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 PVA's reserve and production estimates are accurate; integrating and managing the newly acquired oil and gas assets with PVA's existing oil and gas exploration and production business; competition from other oil and gas exploration and production companies; pipeline availability; 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 PVA's press releases and public periodic filings with the Securities and Exchange Commission, including PVA'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 PVA'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. PVA 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 September 18, 2007