Penn Virginia Corporation (NYSE:PVA) announced today that it has closed an acquisition for $44.9 million in east Texas targeting the Cotton Valley.
Transaction Highlights -- Estimated proved reserves of 21.9 billion cubic feet of natural gas equivalent ("Bcfe"), 2.4 Bcfe of which are proved developed reserves, and approximately 104 Bcfe of estimated probable and possible reserves; -- Current net production of approximately 1.1 million cubic feet of natural gas equivalent per day; -- Approximately 4,800 gross (4,700 net) acres located adjacent to PVA's North Carthage Field in Harrison and Panola Counties, Texas with approximately 110 potential Cotton Valley locations; and -- Additional upsides include 20-acre down-spacing in the Cotton Valley and potential from the shallower Travis Peak formation.
The acquisition was funded with cash on hand and borrowings under PVA's revolving credit facility.
A. James Dearlove, President and Chief Executive Officer, stated, "Located adjacent to some of our better Cotton Valley acreage, this acquisition has attractive transaction economics and provides us with significant exposure to potential upside opportunities. Including the Woodlawn Field acquisition announced in July, we have recently acquired 41 Bcfe of proved reserves and approximately 114 Bcfe of estimated probable and possible reserves in our core Cotton Valley area for approximately $67 million."
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 acquisition will be cash flow accretive; 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 and 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 Dec.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 October 25, 2007