Penn Virginia Corporation Announces First Quarter 2008 Results and Provides 2008 Guidance Update

RADNOR, Pa.--

Penn Virginia Corporation (NYSE:PVA) today reported financial and operational results for the three months ended March 31, 2008 and provided an update of full-year 2008 guidance.

First Quarter Highlights and Guidance Update

First quarter 2008 highlights and results, with comparisons to first quarter 2007 results, included the following:

-- Oil and gas production of 10.5 billion cubic feet of natural gas
    equivalent (Bcfe), or 115.6 million cubic feet of natural gas
    equivalent (MMcfe) per day, a 21 percent increase as compared to
    8.7 Bcfe, or 97.0 MMcfe per day;

-- Operating income of $60.1 million, as compared to $38.5 million;

-- Operating cash flow, a non-GAAP (generally accepted accounting
    principles) measure, of $84.6 million as compared to $69.3
    million;

-- Net income of $3.9 million, or $0.09 per diluted share, as compared
    to $4.4 million, or $0.11 per diluted share; and

-- Adjusted net income, a non-GAAP measure which excludes the effects
    of a non-cash change in derivatives fair value, of $20.8 million,
    or $0.50 per diluted share, as compared to $16.5 million, or $0.43
    per diluted share.

Full-year 2008 guidance updates are as follows:

-- Re-affirmed full-year 2008 production guidance, with estimated
    full-year production of between 49.2 and 51.7 Bcfe, or between
    134.4 and 141.3 MMcfe per day;

-- Re-affirmed full-year 2008 cash operating expense guidance of
    between $2.10 and $2.30 per thousand cubic feet of natural gas
    equivalent (Mcfe) produced; and

-- Increased 2008 oil and gas capital expenditures guidance from
    $475.0 million to a range of between $490.0 and $510.0 million.

A reconciliation of non-GAAP financial measures appears in the financial tables later in this release.

In the first quarter of 2008, operating income was $60.1 million, which was $21.6 million, or 56 percent, higher than the first quarter of 2007. The increase was primarily due to 61 percent higher operating income in the oil and gas segment and 207 percent higher operating income in the natural gas midstream (PVR Midstream) segment, offset in part by two percent lower segment operating income from the coal and natural resource management (PVR Coal & NRM) segment and higher corporate general and administrative (G&A) expense.

Operating cash flow in the first quarter of 2008 increased $15.3 million, or 22 percent, as compared to the first quarter of 2007 primarily due to the increase in operating income and higher non-cash depletion, depreciation and amortization (DD&A) expense included in operating income, partially offset by an increase in cash paid to settle derivatives and higher interest expense.

The 21 percent increase in adjusted net income in the first quarter of 2008 as compared to the first quarter of 2007 was primarily due to the increase in operating income, partially offset by the increase in cash paid to settle derivatives and the increase in interest expense.

The 26 percent decrease in net income in the first quarter of 2008 as compared to the first quarter of 2007 was primarily due to increases in derivatives expense, resulting mainly from changes in the valuation of unrealized derivative positions, higher minority interest and higher interest expense, which more than offset the higher operating income.

Management Comment

A. James Dearlove, President and Chief Executive Officer of PVA, said, "We are pleased with the performance of our oil and gas operations during the first quarter of 2008, which delivered a 21 percent production increase over the prior year quarter. However, daily production was flat from the fourth quarter of 2007 primarily due to timing issues which impacted first quarter production volumes in East Texas, including the delayed startup of the processing plant, operated by Penn Virginia Resource Partners, L.P. (NYSE:PVR), and the transition to 20-acre spaced development. These delays are short-term in nature and, given the expected higher levels of drilling activity during the remaining quarters of 2008, we have re-affirmed our expected 2008 production growth of 21 to 27 percent over 2007 levels.

"Looking forward, management is enthusiastic about our prospects and positioning. We have a strong acreage position in the Lower Bossier / Haynesville Shale, a viable presence in the Woodford, Lower Huron and Bakken Shales, and are establishing a position in the Marcellus Shale. When combined with our emerging 20-acre spaced development program in the Cotton Valley, our horizontal drilling initiatives in the Selma Chalk and the Granite Wash and our more traditional activities in horizontal coalbed methane and the Gulf Coast, we believe PVA has an impressive portfolio of growth opportunities. Due to these new opportunities for higher levels of drilling activity along with expected leasehold acquisitions and facility improvements, we have increased our oil and gas capital expenditures guidance from $475.0 million of budgeted spending to a range of between $490.0 and $510.0 million.

"We expect growth in PVR's midstream and coal and natural resource management segments during 2008, as gas processing capacity has recently increased by 87 percent and volumes are building at two new processing plants in Texas, and coal production by PVR's lessees is expected to increase during the remainder of the year. As is the case with PVA, PVR continues to evaluate acquisitions and other expansion opportunities in both segments to supplement growth from its existing operations.

"We own 82 percent of Penn Virginia GP Holdings, L.P. (NYSE:PVG), the owner of the general partner and largest limited partner of PVR. PVG currently provides approximately $44 million of annualized distributions to PVA - approximately 31 percent higher than in the prior year quarter - which, together with cash flows from operating activities and borrowings under our revolving credit facility, help fund our oil and gas capital expenditures.

"We look forward to continued growth in all operating segments in 2008 and believe that we have the proper strategies in place at each business segment and the financial strength to achieve that growth."

Oil and Gas Segment Review

First quarter 2008 oil and gas production grew 21 percent to 10.5 Bcfe from 8.7 Bcfe in the first quarter of 2007. See PVA's separate operational update news release dated April 30, 2008 for a more detailed discussion of first quarter 2008 drilling and production operations for the oil and gas business segment.

Oil and gas operating income for the first quarter of 2008 was $36.4 million, or 61 percent higher than the $22.6 million in the first quarter of 2007. Total oil and gas revenues increased by 49 percent from $62.0 million in the first quarter of 2007 to $92.3 million in the first quarter of 2008. The increase in revenues was primarily attributable to the production increase, as well as an 18 percent increase in the realized natural gas price and an 80 percent increase in the realized oil, natural gas liquids (NGLs) and condensate price.

In the first quarter of 2008, total oil and gas segment expenses increased by $16.5 million, or 42 percent, to $55.9 million, or $5.32 per Mcfe produced, from $39.5 million, or $4.51 per Mcfe produced, in the first quarter of 2007, as discussed below:

--  Cash operating expenses increased by $8.1 million, or 49 percent,
     to $24.7 million, or $2.34 per Mcfe produced, in the first
     quarter of 2008 from $16.5 million, or $1.90 per Mcfe produced,
     in the first quarter of 2007. Unit cash operating expenses were
     slightly lower than the $2.38 per Mcfe produced in the fourth
     quarter of 2007. The overall increase in cash operating expenses
     was due in part to the production increase. Increases in cash
     operating expenses per unit of production are discussed below:

   -- Lease operating expense increased to $1.35 per Mcfe from $1.02
    per Mcfe, primarily due to higher water disposal costs in East
    Texas associated with increased production volumes, additional
    compression rentals, increased downhole maintenance, higher
    chemical costs associated with colder temperatures in March and
    increased third-party gathering charges pending hook up to PVR's
    gas processing plant in East Texas in the second quarter of 2008;

   -- Taxes other than income increased to $0.56 per Mcfe from $0.48
    per Mcfe, primarily due to higher commodity prices in the first
    quarter of 2008 relative to the prior year quarter; and

   -- G&A expense increased to $0.44 per Mcfe from $0.39 per Mcfe,
    primarily due to additional personnel as a result of expanding
    operations throughout the segment.

--  Exploration expense remained relatively constant at $4.7 million
     for the first quarter of 2008, as compared to $5.1 million in the
     prior year quarter.

--  DD&A expense increased by $8.8 million, or 49 percent, to $26.6
     million, or $2.53 per Mcfe, in the first quarter of 2008 from
     $17.8 million, or $2.04 per Mcfe in the prior year quarter. The
     overall increase in DD&A expense was due in part to the
     production increase. In addition, the higher depletion rate per
     unit of production was primarily due to a shift in the production
     mix to areas with relatively high depletion rates, including the
     Gulf Coast, East Texas, Appalachia and the Mid-Continent.

Natural Gas Midstream and Coal & NRM Segment Review (PVR and PVG)

Operating income for PVR Midstream increased 207 percent to $13.7 million in the first quarter of 2008 from $4.4 million in the prior year quarter. Operating income for PVR Coal & NRM decreased two percent to $17.6 million in the first quarter of 2008 from $17.9 million in the prior year quarter. Financial and operational results and full-year 2008 guidance for each of these segments are provided in the financial tables later in this release. In addition, operational updates for these segments are discussed in more detail in PVR's news release dated May 7, 2008 (please visit PVR's website, www.pvresource.com under "For Investors," for a copy of the release).

PVA owns the general partner of PVG and is PVG's largest unitholder and reports its financial results on a consolidated basis with the financial results of PVG. Similarly, PVG owns PVR's general partner, including the incentive distribution rights, and is PVR's largest limited partner unitholder, and reports its financial results on a consolidated basis with the financial results of PVR. PVG currently has no separate operating activities apart from those conducted by PVR and derives its cash flow solely from cash distributions received from PVR.

As previously announced, on May 20, 2008, PVG will pay to unitholders of record as of May 5, 2008 a quarterly cash distribution covering the period of January 1 through March 31, 2008 in the amount of $0.34 per unit, or an annualized rate of $1.36 per unit. This annualized distribution represents a $0.08 per unit, or 6.3 percent, increase over the annualized distribution of $1.28 per unit paid in the prior quarter and a 30.8 percent increase over the annualized distribution of $1.04 per unit for the same quarter of 2007.

As the result of PVG's distribution increase, PVA will receive a cash distribution of approximately $10.9 million in the second quarter of 2008 or approximately $43.6 million on an annualized basis.

A conversion of the GAAP-compliant financial statements ("As reported") to the equity method of accounting ("As adjusted") is included in the "Conversion to Non-GAAP Equity Method" table in this release. Using the equity method, PVG's results are reduced to a few line items and the results from oil and gas operations and corporate are therefore highlighted. Management believes that this is useful since the oil and gas and corporate segments provide a majority of the cash flow from operations generated by PVA, as compared to distributions PVA receives from PVG and PVR. Management believes that the financial statements presented using the equity method are less complex and more comparable to those of other oil and gas exploration and production companies.

Capital Resources and Impact of Derivatives

As of March 31, 2008, PVA had outstanding borrowings of $406.0 million, including $230.0 million of convertible senior subordinated notes due 2012 and $176.0 of borrowings under its revolving credit facility. The $54.0 million increase in outstanding borrowings as compared to the $352.0 million at December 31, 2007 was primarily due to higher spending to fund PVA's oil and gas capital expenditures during the first quarter of 2008. PVR's outstanding borrowings as of March 31, 2008 were $413.7 million, including $13.3 million of senior unsecured notes classified as current portion of long-term debt, a slight increase from $411.7 million as of December 31, 2007. Consolidated interest expense increased from $6.7 million in the first quarter of 2007 to $9.5 million in the first quarter of 2008. The increase was due higher weighted average levels of outstanding borrowings during the first quarter of 2008 as compared to the prior year quarter.

During the first quarter of 2008, derivatives expense was $25.9 million, as compared to expense of $16.7 million in the prior year quarter. Included in the derivatives expense for the first quarter of 2008 was $33.7 million of derivatives expense related to PVA's oil and gas segment, partially offset by $7.8 million of derivatives income related to PVR Midstream. Cash settlements of derivatives included in these amounts resulted in net cash payments of $9.0 million during the first quarter of 2008, as compared to $3.5 million of net cash receipts in the first quarter of 2007. Included in the cash settlement of derivatives for the first quarter of 2008 was $9.5 million of net cash payments related to PVR Midstream, partially offset by $0.5 million of net cash receipts related to PVA's oil and gas segment.

Based on derivatives currently in place for natural gas production, we have hedged approximately 58 percent of natural gas production for the final three quarters of 2008, based on the midpoint of production guidance, at weighted average collar floors and ceilings of $8.35 and $9.72 per MMBtu. See the Guidance Table included in this release for details of production guidance and derivative positions.

Guidance for 2008

See the Guidance Table included in this release for guidance estimates for full-year 2008. These estimates, including capital expenditure plans, are meant to provide guidance only and are subject to revision as PVA's and PVR's operating environments change.

Conference Call

A conference call and webcast, during which management will discuss first quarter 2008 financial and operational results for PVA, is scheduled for Thursday, May 8, 2008 at 3:00 p.m. ET. Prepared remarks by A. James Dearlove, President and Chief Executive Officer, will be followed by a question and answer period. Investors and analysts may participate via phone by dialing 1-877-407-9205 five to ten minutes before the scheduled start of the conference call, or via webcast by logging on to PVA's website at www.pennvirginia.com at least 20 minutes prior to the scheduled start of the call to download and install any necessary audio software. A telephonic replay of the call will be available until May 22, 2008 at 11:59 p.m. ET by dialing 1-877-660-6853 and using the following replay pass codes: account #286, conference ID #281755. An on-demand replay of the conference call will be available at PVA's website beginning shortly after the call.

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 United States, including the Cotton Valley play in East Texas, the Selma Chalk play in Mississippi, the Mid-Continent region, the Appalachian Basin 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 unitholder of Penn Virginia Resource Partners, L.P. (NYSE:PVR), a manager of coal and natural resource properties and related assets and the operator of a midstream natural gas gathering and processing business. For more information, 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: the volatility of commodity prices for natural gas, crude oil, NGLs and coal; our ability to develop and replace oil and gas reserves and the price for which such reserves can be acquired; the relationship between natural gas, coal, oil and NGL prices; the projected demand for and supply of natural gas, crude oil, NGLs and coal; the availability and costs of required drilling rigs, production equipment and materials; our ability to obtain adequate pipeline transportation capacity for our oil and gas production; competition among producers in the oil and natural gas and coal industries generally and among natural gas midstream companies; the extent to which the amount and quality of actual production of our oil and natural gas or PVR's coal differs from estimated proved oil and gas reserves and recoverable coal reserves; PVR's ability to generate sufficient cash from its businesses to maintain and pay the quarterly distribution to its general partner and its unitholders; the experience and financial condition of PVR's coal lessees and natural gas midstream customers, including the lessees' ability to satisfy their royalty, environmental, reclamation and other obligations to PVR and others; operating risks, including unanticipated geological problems, incidental to our business and to PVR's coal or natural gas midstream business; PVR's ability to acquire new coal reserves or natural gas midstream assets and new sources of natural gas supply and connections to third-party pipelines on satisfactory terms; PVR's ability to retain existing or acquire new natural gas midstream customers and coal lessees; the ability of PVR's lessees to produce sufficient quantities of coal on an economic basis from PVR's reserves and obtain favorable contracts for such production; the occurrence of unusual weather or operating conditions including force majeure events; delays in anticipated start-up dates of our oil and natural gas production, of PVR's lessees' mining operations and related coal infrastructure projects and new processing plants in PVR's natural gas midstream business; environmental risks affecting the drilling and producing of oil and gas wells, the mining of coal reserves or the production, gathering and processing of natural gas; the timing of receipt of necessary governmental permits by us and by PVR or PVR's lessees; hedging results; accidents; changes in governmental regulation or enforcement practices, especially with respect to environmental, health and safety matters, including with respect to emissions levels applicable to coal-burning power generators; uncertainties relating to the outcome of current and future litigation regarding mine permitting; risks and uncertainties relating to general domestic and international economic (including inflation, interest rates and financial market) and political conditions (including the impact of potential terrorist attacks); and PVG's ability to generate sufficient cash from its interests in PVR to maintain and pay the quarterly distribution to its general partner and its unitholders.

Additional information concerning these and other factors can be found in our press releases and public periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2007. Many of the factors that will determine our 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. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as the result of new information, future events or otherwise.


                      PENN VIRGINIA CORPORATION
                    OPERATIONS SUMMARY - unaudited

                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                     2008      2007
                                                   --------- ---------
Production
Natural gas (MMcf)                                    9,748     8,084
Oil, natural gas liquids (NGLs) and condensate
 (MBbls)                                                129       107
Total oil, NGLs, condensate and natural gas
 production (MMcfe)                                  10,522     8,726
Coal royalty tons (thousands)                         7,640     8,284
Midstream system throughput volumes (MMcf)           17,287    15,900

Prices and margin
     Natural gas ($ per Mcf)                       $   8.26  $   7.00
     Oil, natural gas liquids, NGLs and condensate
      ($ per Bbl)                                  $  85.91  $  47.70
     Average gross coal royalty ($ per ton)        $   3.14  $   3.02
     Average net royalty ($ per ton) - (a)         $   2.81  $   2.80
     Gross midstream processing margin (in
      thousands)                                   $ 25,351  $ 15,587

           CONSOLIDATED STATEMENTS OF EARNINGS - unaudited
                (in thousands, except per share data)

                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                     2008      2007
                                                   --------- ---------
Revenues
     Natural gas                                   $ 80,513  $ 56,619
     Oil, NGLs and condensate                        11,083     5,104
     Natural gas midstream                          125,048    95,318
     Coal royalties                                  23,962    25,000
     Other                                            8,529     4,229
                                                   --------- ---------
        Total revenues                              249,135   186,270
                                                   --------- ---------
Expenses
     Cost of midstream gas purchased                 99,697    79,731
     Operating                                       21,002    14,433
     Exploration                                      4,680     5,070
     Taxes other than income                          7,395     5,376
     General and administrative (excluding equity-
      based compensation)                            16,101    13,792
     Equity-based compensation - (b)                  1,558     1,259
     Depreciation, depletion and amortization        38,569    28,070
                                                   --------- ---------
        Total expenses                              189,002   147,731
                                                   --------- ---------

Operating income                                     60,133    38,539

Other income (expense)
     Interest expense                                (9,552)   (6,727)
     Derivatives                                    (25,901)  (16,721)
     Other                                            2,331     1,416
                                                   --------- ---------

Income before minority interest and income taxes     27,011    16,507

     Minority interest                               20,028     9,296
     Income tax expense                               3,057     2,808
                                                   --------- ---------

Net income                                         $  3,926  $  4,403
                                                   ========= =========

Per share data:

Net income per share, basic                        $   0.09  $   0.12
                                                   ========= =========
Net income per share, diluted (c)                  $   0.09  $   0.11
                                                   ========= =========

Weighted average shares outstanding, basic           41,558    37,594
Weighted average shares outstanding, diluted         41,803    38,316

(a) - The average net royalty per ton deducts coal royalties expenses,
 which are incurred primarily in Central Appalachia.

(b) - Our equity-based compensation expense includes our stock option
 expense and the amortization of restricted stock and units in
 accordance with SFAS No. 123(R), Share-based Payments.

(c) - The diluted EPS numerator includes an adjustment for the
 dilutive effect of PVR's net income.


                      PENN VIRGINIA CORPORATION
                     CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                            March 31,    December 31,
                                              2008           2007
                                           ------------  -------------
                                           (unaudited)
Assets
     Current assets                       $    271,023  $     244,072
     Net property and equipment              1,972,486      1,899,014
     Other assets                              108,970        110,375
                                           ------------  -------------
          Total assets                    $  2,352,479  $   2,253,461
                                           ============  =============

Liabilities and Shareholders' Equity
     Current liabilities                  $    279,236  $     261,899
     Long-term debt                            406,000        352,000
     Long-term debt of PVR                     400,479        399,153
     Other liabilities and deferred taxes      268,170        251,149
     Minority interest                         187,153        179,162
     Shareholders' equity                      811,441        810,098
                                           ------------  -------------
          Total liabilities and
           shareholders' equity           $  2,352,479  $   2,253,461
                                           ============  =============



          CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited
                            (in thousands)

                                               Three Months Ended
                                                    March 31,
                                           ---------------------------
                                              2008           2007
                                           ------------  -------------
Operating Activities
     Net income                           $      3,926  $       4,403
     Adjustments to reconcile net income
      to net cash provided by operating
      activities:
     Depreciation, depletion and
      amortization                              38,569         28,070
     Commodity derivative contracts:
     Total derivative losses (gains)            27,009         17,142
     Cash receipts (payments) to settle
      derivatives for period                    (8,953)         3,512
     Deferred income taxes                       2,605          1,965
     Minority interest                          20,028          9,296
     Dry hole and unproved leasehold
      expense                                    3,553          4,386
     Other                                      (2,161)           526
                                           ------------  -------------
     Operating cash flow (see attached
      table "Reconciliation of Certain
      Non-GAAP Financial Measures")             84,576         69,300
     Changes in operating assets and
      liabilities                              (18,424)        (4,359)
                                           ------------  -------------
         Net cash provided by operating
          activities                            66,152         64,941
                                           ------------  -------------

Investing Activities
     Acquisitions, net of cash acquired         (4,740)        (3,835)
     Additions to property and equipment      (108,662)      (104,771)
     Other                                         405             47
                                           ------------  -------------
         Net cash used in investing
          activities                          (112,997)      (108,559)
                                           ------------  -------------

Financing Activities
     Dividends paid                             (2,344)        (2,116)
     Distributions paid to minority
      interest holders                         (13,740)       (11,020)
     Net proceeds from (repayments of) PVA
      borrowings                                54,000         53,000
     Net proceeds from (repayments of) PVR
      borrowings                                 2,000          5,000
     Other                                       5,282            943
                                           ------------  -------------
         Net cash provided by financing
          activities                            45,198         45,807
                                           ------------  -------------

Net increase (decrease) in cash and cash
 equivalents                                    (1,647)         2,189
Cash and cash equivalents - beginning of
 period                                         34,527         20,338
                                           ------------  -------------
Cash and cash equivalents - end of period $     32,880  $      22,527
                                           ============  =============


                      PENN VIRGINIA CORPORATION
              QUARTERLY SEGMENT INFORMATION - unaudited
              (Dollars in thousands except where noted)


                                                            Coal and
                                                             Natural
                                                            Resource
                                             Oil and Gas    Management
                                           --------------- -----------
                                           Amount   (per
                                                    Mcfe)
                                                      *
                                           ------- -------
Three Months Ended March 31, 2008

Production
Total oil, NGLs, condensate and gas
 (MMcfe)                                    10,522
Natural gas (MMcf)                           9,748
Oil, NGLs and condensate (MBbls)               129
Coal royalty tons (thousands of tons)                            7,640
Midstream system throughput volumes (MMcf)

Revenues
     Natural gas                           $80,513 $  8.26 $         -
     Oil, NGLs and condensate               11,083   85.91           -
     Natural gas midstream                       -       -           -
     Coal royalties                              -       -      23,962
     Other                                     703       -       6,332
                                           ------- ------- -----------
        Total revenues                      92,299    8.77      30,294
                                           ------- ------- -----------
Expenses
     Cost of midstream gas purchased             -       -           -
     Operating expense                      14,209    1.35       2,743
     Exploration                             4,680    0.44           -
     Taxes other than income                 5,858    0.56         371
     General and administrative              4,584    0.44       3,185
     Depreciation, depletion and
      amortization                          26,616    2.53       6,413
                                           ------- ------- -----------
       Total expenses                       55,947    5.32      12,712
                                           ------- ------- -----------

Operating income (loss)                    $36,352 $  3.45 $    17,582
                                           ------- ------- -----------


Additions to property and equipment and
 acquisitions                              $95,189         $        48


                                                            Coal and
                                                             Natural
                                                            Resource
                                             Oil and Gas    Management
                                           --------------- -----------
                                           Amount   (per
                                                    Mcfe)
                                                      *
                                           ------- -------
Three Months Ended March 31, 2007

Production
Total oil, NGLs, condensate and gas
 (MMcfe)                                     8,726
Natural gas (MMcf)                           8,084
Oil, NGLs and condensate (MBbls)               107
Coal royalty tons (thousands of tons)                            8,284
Midstream system throughput volumes (MMcf)

Revenues
     Natural gas                           $56,619 $  7.00 $         -
     Oil, NGLs and condensate                5,104   47.70           -
     Natural gas midstream                       -       -           -
     Coal royalties                              -       -      25,000
     Other                                     312       -       3,484
                                           ------- ------- -----------
        Total revenues                      62,035    7.11      28,484
                                           ------- ------- -----------
Expenses
     Cost of midstream gas purchased             -       -           -
     Operating expense                       8,919    1.02       2,155
     Exploration                             5,070    0.58           -
     Taxes other than income                 4,223    0.48         323
     General and administrative              3,400    0.40       2,616
     Depreciation, depletion and
      amortization                          17,844    2.04       5,490
                                           ------- ------- -----------
       Total expenses                       39,456    4.52      10,584
                                           ------- ------- -----------

Operating income (loss)                    $22,579 $  2.59 $    17,900
                                           ------- ------- -----------


Additions to property and equipment and
 acquisitions                              $99,725         $     1,336



                                       Natural
                                         Gas
                                       Midstream  Other   Consolidated
                                      ---------- -------- ------------

Three Months Ended March 31, 2008

Production
Total oil, NGLs, condensate and gas
 (MMcfe)
Natural gas (MMcf)
Oil, NGLs and condensate (MBbls)
Coal royalty tons (thousands of tons)
Midstream system throughput volumes
 (MMcf)                                   17,287

Revenues
     Natural gas                      $        - $     -  $     80,513
     Oil, NGLs and condensate                  -       -        11,083
     Natural gas midstream               125,048       -       125,048
     Coal royalties                            -       -        23,962
     Other                                 1,472      22         8,529
                                      ---------- -------- ------------
        Total revenues                   126,520      22       249,135
                                      ---------- -------- ------------
Expenses
     Cost of midstream gas purchased      99,697       -        99,697
     Operating expense                     4,050       -        21,002
     Exploration                               -       -         4,680
     Taxes other than income                 701     465         7,395
     General and administrative            3,333   6,557        17,659
     Depreciation, depletion and
      amortization                         5,087     453        38,569
                                      ---------- -------- ------------
       Total expenses                    112,868   7,475       189,002
                                      ---------- -------- ------------

Operating income (loss)               $   13,652 $(7,453) $     60,133
                                      ---------- -------- ------------


Additions to property and equipment
 and acquisitions                     $   17,622 $   543  $    113,402


                                       Natural
                                         Gas
                                       Midstream  Other   Consolidated
                                      ---------- -------- ------------

Three Months Ended March 31, 2007

Production
Total oil, NGLs, condensate and gas
 (MMcfe)
Natural gas (MMcf)
Oil, NGLs and condensate (MBbls)
Coal royalty tons (thousands of tons)
Midstream system throughput volumes
 (MMcf)                                   15,900

Revenues
     Natural gas                      $        - $     -  $     56,619
     Oil, NGLs and condensate                  -       -         5,104
     Natural gas midstream                95,318       -        95,318
     Coal royalties                            -       -        25,000
     Other                                   398      35         4,229
                                      ---------- -------- ------------
        Total revenues                    95,716      35       186,270
                                      ---------- -------- ------------
Expenses
     Cost of midstream gas purchased      79,731       -        79,731
     Operating expense                     3,359       -        14,433
     Exploration                               -       -         5,070
     Taxes other than income                 520     310         5,376
     General and administrative            3,023   6,012        15,051
     Depreciation, depletion and
      amortization                         4,643      93        28,070
                                      ---------- -------- ------------
       Total expenses                     91,276   6,415       147,731
                                      ---------- -------- ------------

Operating income (loss)               $    4,440 $(6,380) $     38,539
                                      ---------- -------- ------------


Additions to property and equipment
 and acquisitions                     $    6,005 $ 1,540  $    108,606

* Natural gas revenues are shown per Mcf, oil, NGL and gas condensate
 revenues are shown per Bbl, and all other amounts are shown per Mcfe.


                      PENN VIRGINIA CORPORATION
           CERTAIN NON-GAAP FINANCIAL MEASURES - unaudited
                            (in thousands)


                                                   Three Months Ended
                                                        March 31,
                                                   -------------------
                                                     2008      2007
                                                   --------- ---------
Reconciliation of GAAP "Net cash provided by
 operating activities" to Non-GAAP "Operating cash
 flow"
--------------------------------------------------
Net cash provided by operating activities          $ 66,152  $ 64,941
Adjustments:
  Changes in operating assets and liabilities        18,424     4,359
                                                   --------- ---------

Operating cash flow (see Note 1 below)             $ 84,576  $ 69,300
                                                   ========= =========

Reconciliation of GAAP "Net income" to Non-GAAP
 "Net income as adjusted"
--------------------------------------------------
Net income as reported                             $  3,926  $  4,403
Adjustments for derivatives:
  Derivative losses included in operating income      1,108       421
  Derivative losses included in other income         25,901    16,721
  Cash receipts (payments) to settle derivatives
   for period                                        (8,953)    3,512
  Impact of adjustments on minority interest (Note
   3)                                                 9,535      (802)
  Impact of adjustments on income tax expense
   (Note 4)                                         (10,760)   (7,730)
                                                   --------- ---------

Net income as adjusted (see Note 2 below)          $ 20,757  $ 16,525
                                                   ========= =========

Net income as adjusted per share, diluted          $   0.50  $   0.43

Note 1 - Operating cash flow represents net cash provided by operating
 activities before changes in assets and liabilities. Operating cash
 flow is presented because we believe it is a useful adjunct to net
 cash provided by operating activities under GAAP. We believe that
 operating cash flow is widely accepted as a financial indicator of an
 oil and gas company's ability to generate cash which is used to
 internally fund exploration and development activities, service debt
 and pay dividends. This measure is widely used by investors and
 professional research analysts in the valuation, comparison, rating
 and investment recommendations of companies within the oil and gas
 exploration and production industry. Operating cash flow is not a
 measure of financial performance under GAAP and should not be
 considered as an alternative to cash flows from operating, investing
 or financing activities, as an indicator of cash flows, or a measure
 of liquidity or as an alternative to net income.

Note 2 - Net income as adjusted represents net income excluding any
 gains or losses on derivatives, adjusted for any cash settlements
 received (paid) and adjusted for related minority interest and income
 taxes. We believe "net income as adjusted" provides a useful measure
 which excludes the impact of mark-to-market accounting.

Note 3 - Minority interest for the quarter ended December 31, 2007 has
 been adjusted for the effect of incentive distribution rights and
 reflects the minority interest percentage of net income recognized
 for the year ended December 31, 2007.

Note 4 - The impact of these adjustments on our income tax expense
 reflects our statutory tax rate of 39%.


                      PENN VIRGINIA CORPORATION
           CONVERSION TO NON-GAAP EQUITY METHOD - unaudited
                            (in thousands)

Reconciliation of GAAP "Income Statements As Reported" to Non-GAAP
 "Income Statements As Adjusted" (see Note 1 below):
----------------------------------------------------------------------


                                        Three Months Ended March 31,
                                              2008 - (unaudited)
                                       -------------------------------
                                          As                    As
                                        Reported Adjustments  Adjusted
                                       --------- ----------- ---------
Revenues
     Natural gas                       $ 80,513  $        -  $ 80,513
     Oil, NGLs and condensate            11,083           -    11,083
     Natural gas midstream              125,048    (125,048)        -
     Coal royalties                      23,962     (23,962)        -
     Other                                8,529      (7,804)      725
                                       --------- ----------- ---------
        Total revenues                  249,135    (156,814)   92,321
                                       --------- ----------- ---------
Expenses
     Cost of midstream gas purchased     99,697     (99,697)        -
     Operating                           21,002      (6,793)   14,209
     Exploration                          4,680           -     4,680
     Taxes other than income              7,395      (1,072)    6,323
     General and administrative          17,659      (7,134)   10,525
     Depreciation, depletion and
      amortization                       38,569     (11,500)   27,069
                                       --------- ----------- ---------
        Total expenses                  189,002    (126,196)   62,806
                                       --------- ----------- ---------

Operating income                         60,133     (30,618)   29,515

Other income (expense)
     Interest expense                    (9,552)      4,932    (4,620)
     Derivatives                        (25,901)     (7,776)  (33,677)
     Equity earnings in PVG and PVR           -      13,979    13,979
     Interest income and other            2,331        (545)    1,786
                                       --------- ----------- ---------

Income before minority interest and
 income taxes                            27,011     (20,028)    6,983

     Minority interest                   20,028     (20,028)        -
     Income tax expense                   3,057           -     3,057
                                       --------- ----------- ---------

Net income                             $  3,926  $        -  $  3,926
                                       ========= =========== =========



                                        Three Months Ended March 31,
                                              2007 - (unaudited)
                                       -------------------------------
                                          As                    As
                                        Reported Adjustments  Adjusted
                                       --------- ----------- ---------
Revenues
     Natural gas                       $ 56,619  $        -  $ 56,619
     Oil, NGLs and condensate             5,104           -     5,104
     Natural gas midstream               95,318     (95,318)        -
     Coal royalties                      25,000     (25,000)        -
     Other                                4,229      (3,882)      347
                                       --------- ----------- ---------
        Total revenues                  186,270    (124,200)   62,070
                                       --------- ----------- ---------
Expenses
     Cost of midstream gas purchased     79,731     (79,731)        -
     Operating                           14,433      (5,514)    8,919
     Exploration                          5,070           -     5,070
     Taxes other than income              5,376        (843)    4,533
     General and administrative          15,051      (6,401)    8,650
     Depreciation, depletion and
      amortization                       28,070     (10,133)   17,937
                                       --------- ----------- ---------
        Total expenses                  147,731    (102,622)   45,109
                                       --------- ----------- ---------

Operating income                         38,539     (21,578)   16,961

Other income (expense)
     Interest expense                    (6,727)      3,547    (3,180)
     Derivatives                        (16,721)      2,647   (14,074)
     Equity earnings in PVG and PVR           -       6,441     6,441
     Interest income and other            1,416        (353)    1,063
                                       --------- ----------- ---------

Income before minority interest and
 income taxes                            16,507      (9,296)    7,211

     Minority interest                    9,296      (9,296)        -
     Income tax expense                   2,808           -     2,808
                                       --------- ----------- ---------

Net income                             $  4,403  $        -  $  4,403
                                       ========= =========== =========

Note 1 - Equity method income statements represent consolidated income
 statements, minus 100% of PVG's consolidated results of operations,
 plus minority interest which represents the portion of PVG's
 consolidated results of operations that we do not own. We believe
 equity method income statements provide useful information to allow
 the public to more easily discern PVG's effect on PVA's operations.


                      PENN VIRGINIA CORPORATION
     CONVERSION TO NON-GAAP EQUITY METHOD - unaudited (continued)
                            (in thousands)

Reconciliation of GAAP "Balance Sheet As Reported" to Non-GAAP
 "Balance Sheet As Adjusted" (see Note 2 below):
----------------------------------------------------------------------


                                             March 31, 2008
                                   -----------------------------------
                                   As Reported Adjustments As Adjusted
                                   ----------- ----------- -----------
Assets                             (unaudited) (unaudited) (unaudited)
     Current assets                $  271,023  $ (120,811) $  150,212
     Net property and equipment     1,972,486    (740,652)  1,231,834
     Equity investment in PVG and
      PVR                                   -     196,061     196,061
     Other assets                     108,970     (95,651)     13,319
                                   ----------- ----------- -----------
          Total assets             $2,352,479  $ (761,053) $1,591,426
                                   =========== =========== ===========

Liabilities and Shareholders'
 Equity
     Current liabilities           $  279,236  $ (141,494) $  137,742
     Long-term debt                   406,000           -     406,000
     Long-term debt of PVR            400,479    (400,479)          -
     Other liabilities and
      deferred taxes                  268,170     (31,927)    236,243
     Minority interest                187,153    (187,153)          -
     Shareholders' equity             811,441           -     811,441
                                   ----------- ----------- -----------
          Total liabilities and
           shareholders' equity    $2,352,479  $ (761,053) $1,591,426
                                   =========== =========== ===========



                                            December 31, 2007
                                   -----------------------------------
                                   As Reported Adjustments As Adjusted
                                   ----------- ----------- -----------
Assets                                         (unaudited) (unaudited)
     Current assets                $  244,072  $ (114,707) $  129,365
     Net property and equipment     1,899,014    (731,282)  1,167,732
     Equity investment in PVG and
      PVR                                   -     202,297     202,297
     Other assets                     110,375     (96,262)     14,113
                                   ----------- ----------- -----------
          Total assets             $2,253,461  $ (739,954) $1,513,507
                                   =========== =========== ===========

Liabilities and Shareholders'
 Equity
     Current liabilities           $  261,899  $ (133,918) $  127,981
     Long-term debt                   352,000           -     352,000
     Long-term debt of PVR            399,153    (399,153)          -
     Other liabilities and
      deferred taxes                  251,149     (27,721)    223,428
     Minority interest                179,162    (179,162)          -
     Shareholders' equity             810,098           -     810,098
                                   ----------- ----------- -----------
          Total liabilities and
           shareholders' equity    $2,253,461  $ (739,954) $1,513,507
                                   =========== =========== ===========


Reconciliation of GAAP "Statement of Cash Flows As Reported" to Non-
 GAAP "Statement of Cash Flows As Adjusted" (see Note 3 below):
----------------------------------------------------------------------


                                       Three Months Ended March 31,
                                              2008 (unaudited)
                                      --------------------------------
                                         As                     As
                                       Reported  Adjustments  Adjusted
                                      ---------- ----------- ---------
Operating Activities
     Net income                       $   3,926  $        -  $  3,926
     Adjustments to reconcile net
      income to
        net cash provided by
         operating activities:
     Depreciation, depletion and
      amortization                       38,569     (11,500)   27,069
     Commodity derivative
      contracts:
     Total derivative losses
      (gains)                            27,009       6,668    33,677
     Cash receipts (payments) to
      settle derivatives for
      period                             (8,953)      9,522       569
     Minority interest                   20,028     (20,028)        -
     Investment in PVG and PVR                -     (13,979)  (13,979)
     Cash distributions from PVG
      and PVR                                 -      10,432    10,432
     Other                                3,997         414     4,411
                                      ---------- ----------- ---------
     Operating cash flow                 84,576     (18,471)   66,105
     Changes in operating assets
      and liabilities                   (18,424)        924   (17,500)
                                      ---------- ----------- ---------
         Net cash provided by
          operating activities           66,152     (17,547)   48,605
                                      ---------- ----------- ---------

Investing Activities
     Other                                  405        (341)       64
     Acquisitions                        (4,740)         20    (4,720)
     Additions to property and
      equipment                        (108,662)     17,650   (91,012)
                                      ---------- ----------- ---------
         Net cash used in
          investing activities         (112,997)     17,329   (95,668)
                                      ---------- ----------- ---------

Financing Activities
     Dividends paid                      (2,344)          -    (2,344)
     Distributions paid to
      minority interest holders         (13,740)     13,740         -
     Proceeds from issuance of
      partners' capital by PVG                -           -         -
     Net proceeds from (repayments
      of) PVA borrowings                 54,000           -    54,000
     Net proceeds from (repayments
      of) PVR borrowings                  2,000      (2,000)        -
     Other                                5,282           -     5,282
                                      ---------- ----------- ---------
         Net cash provided by
          financing activities           45,198      11,740    56,938
                                      ---------- ----------- ---------

Net increase (decrease) in cash
 and cash equivalents                    (1,647)     11,522     9,875
Cash and cash equivalents-
 beginning balance                       34,527     (30,503)    4,024
                                      ---------- ----------- ---------
Cash and cash equivalents-ending
 balance                              $  32,880  $  (18,981) $ 13,899
                                      ========== =========== =========



                                     Three Months Ended March 31, 2007
                                                (unaudited)
                                     ---------------------------------
                                        As                     As
                                      Reported  Adjustments  Adjusted
                                     ---------- ----------- ----------
Operating Activities
     Net income                      $   4,403  $        -  $   4,403
     Adjustments to reconcile net
      income to
        net cash provided by
         operating activities:
     Depreciation, depletion and
      amortization                      28,070     (10,133)    17,937
     Commodity derivative
      contracts:
     Total derivative losses
      (gains)                           17,142      (3,490)    13,652
     Cash receipts (payments) to
      settle derivatives for
      period                             3,512       2,072      5,584
     Minority interest                   9,296      (9,296)         -
     Investment in PVG and PVR               -      (6,441)    (6,441)
     Cash distributions from PVG
      and PVR                                -       2,322      2,322
     Other                               6,877         109      6,986
                                     ---------- ----------- ----------
     Operating cash flow                69,300     (24,857)    44,443
     Changes in operating assets
      and liabilities                   (4,359)      4,552        193
                                     ---------- ----------- ----------
         Net cash provided by
          operating activities          64,941     (20,305)    44,636
                                     ---------- ----------- ----------

Investing Activities
     Other                                  47         (43)         4
     Acquisitions                       (3,835)        339     (3,496)
     Additions to property and
      equipment                       (104,771)      7,002    (97,769)
                                     ---------- ----------- ----------
         Net cash used in
          investing activities        (108,559)      7,298   (101,261)
                                     ---------- ----------- ----------

Financing Activities
     Dividends paid                     (2,116)          -     (2,116)
     Distributions paid to
      minority interest holders        (11,020)     11,020          -
     Proceeds from issuance of
      partners' capital by PVG               -        (860)      (860)
     Net proceeds from
      (repayments of) PVA
      borrowings                        53,000           -     53,000
     Net proceeds from
      (repayments of) PVR
      borrowings                         5,000      (5,000)         -
     Other                                 943           -        943
                                     ---------- ----------- ----------
         Net cash provided by
          financing activities          45,807       5,160     50,967
                                     ---------- ----------- ----------

Net increase (decrease) in cash
 and cash equivalents                    2,189      (7,847)    (5,658)
Cash and cash equivalents-
 beginning balance                      20,338     (13,687)     6,651
                                     ---------- ----------- ----------
Cash and cash equivalents-ending
 balance                             $  22,527  $  (21,534) $     993
                                     ========== =========== ==========

Note 2 - Equity method balance sheets represent consolidated balance
 sheets, minus 100% of PVG's consolidated balance sheets, excluding
 minority interest which represents the portion of PVG's consolidated
 balance sheet that PVA does not own and including other adjustments
 to eliminate inter-company transactions. We believe equity method
 balance sheets provide useful information to allow the public to more
 easily discern PVG's effect on PVA's assets, liabilities and
 shareholders' equity.

Note 3 - Equity method statements of cash flows represent consolidated
 statements of cash flows, minus 100% of PVG's consolidated statements
 of cash flows, excluding minority interest which represents the
 portion of PVG's consolidated results of operations that PVA does not
 own and including other adjustments to eliminate inter-company
 transactions. We believe equity method statements of cash flows
 provide useful information to allow the public to more easily discern
 PVG's effect on PVA's cash flows.


                      PENN VIRGINIA CORPORATION
                      GUIDANCE TABLE - unaudited
               (dollars in millions except where noted)

Penn Virginia Corporation is providing the following guidance
 regarding financial and operational expectations for 2008.

                                            Actual
                                           --------
                                            First
                                            Quarter     Full-Year
                                             2008     2008 Guidance
                                           -------- ------------------
Oil & Gas Segment:
-----------------------------------------
 Production:
 Natural gas (Bcf) - See Note a                 9.7    43.2 --    45.1
 Oil, NGLs and condensate (MBbls)               129 1,000.0 -- 1,100.0
 Equivalent production (Bcfe)                  10.5    49.2 --    51.7
 Equivalent daily production (MMcfe per
  day)                                        115.6   134.4 --   141.3

 Expenses:
 Cash operating expenses ($ per Mcfe)     $    2.34    2.10 --    2.30
 Exploration                              $     4.7    30.0 --    40.0
 Depreciation, depletion and amortization
  ($ per Mcfe)                            $    2.53    2.50 --    2.65

 Capital expenditures:
 Development drilling                     $    79.1   375.0 --   380.0
 Exploratory drilling                     $     5.4    55.0 --    60.0
 Pipeline, gathering, facilities          $     4.9    30.0 --    35.0
 Seismic                                  $     0.7     8.0 --    10.0
 Lease acquisition, field projects and
  other                                   $     4.6    22.0 --    25.0
 Proved property acquisitions             $       -       - --       -
 Total segment capital expenditures       $    94.7   490.0 --   510.0

Coal and Natural Resource Segment (PVR):
-----------------------------------------
 Coal royalty tons (millions)                   7.6    33.0 --    34.5

 Revenues:
 Average royalty per ton                  $    3.14    2.90 --    3.10
 Other                                    $     6.3    25.0 --    27.0

 Expenses:
 Cash operating expenses                  $     6.3    21.0 --    23.0
 Depreciation, depletion and amortization $     6.4    30.0 --    32.0

 Capital expenditures:
 Expansion and acquisitions               $     0.1     1.5 --     3.0
 Maintenance capital expenditures         $       -     0.2 --     0.4
 Total segment capital expenditures       $     0.1     1.7 --     3.4

Natural Gas Midstream Segment (PVR):
-----------------------------------------
 Throughput volumes (MMcf per day) - see
  Note c                                        190     250 --     275

 Expenses:
 Cash operating expenses                  $     8.1    34.0 --    36.0
 Depreciation, depletion and amortization $     5.1    22.0 --    24.0

 Capital expenditures:
 Expansion and acquisitions               $    16.4    80.0 --    90.0
 Maintenance capital expenditures         $     3.1    12.0 --    14.0
 Total segment capital expenditures       $    19.5    92.0 --   104.0

Corporate and Other:
-----------------------------------------
 General and administrative expense - PVA
  - see Note d                            $     5.9    22.0 --    24.0
 General and administrative expense - PVG
  - see Note d                            $     0.6     3.0 --     3.5
 Interest expense:
 PVA average long-term debt outstanding   $   374.5   420.0 --   440.0
 PVA interest rate                             5.0%    5.5% --    6.0%
 Percentage capitalized - see Note e            11%     20% --     30%
 PVR average long-term debt outstanding   $   412.5   450.0 --   470.0
 PVR interest rate assumed                     5.3%    5.5% --    6.0%

 Minority interest in PVG & PVR           $    20.0     see Note f
 Income tax rate                                44%     see Note g
 Cash distributions received from PVG &
  PVR                                     $    10.4     see Note h
 Other capital expenditures               $     0.3     0.5        1.0

These estimates are meant to provide guidance only and are subject to
 change as PVA's operating environment changes.

See Notes on following page.


                      PENN VIRGINIA CORPORATION
               GUIDANCE TABLE - unaudited - (continued)
               (dollars in millions except where noted)

                          Notes to Guidance Table:
                     ----------------------------------

a - The following table shows PVA's current derivative positions for
 natural gas production as of March 31, 2008:

                                    Weighted Average Price
                                 -----------------------------
                     Average     Additional
                      Volume        Put
                      Per Day      Option     Floor    Ceiling
                     ---------   ---------- ---------- -------

 Natural gas         (in                  (per MMBtu)
  costless collars    MMBtus)
 Second quarter 2008    10,000              $     7.50 $  9.10
 Third quarter 2008     10,000              $     7.50 $  9.10
 Fourth quarter 2008    10,000              $     7.50 $  9.10

 Natural gas three-  (in                  (per MMBtu)
  way collars (1)     MMBtus)
 Second quarter 2008    22,500   $     5.00 $     7.11 $  9.09
 Third quarter 2008     22,500   $     5.00 $     7.11 $  9.09
 Fourth quarter 2008    67,500   $     5.89 $     8.55 $ 11.26
 First quarter 2009     65,000   $     6.00 $     8.67 $ 11.68
 Second quarter 2009    20,000   $     5.75 $     8.00 $  9.23
 Third quarter 2009     20,000   $     5.75 $     8.00 $  9.23
 Fourth quarter 2009    10,000   $     6.00 $     8.50 $ 12.15
 First quarter 2010     10,000   $     6.00 $     8.50 $ 12.15

 Natural gas swaps
 Second quarter 2008    45,000              $     9.03
 Third quarter 2008     45,000              $     9.03

 Crude oil three-way (in                 (per barrel)
  collars (1)         barrels)
 Second quarter 2008       500   $    70.00 $    95.00 $108.80
 Third quarter 2008        500   $    70.00 $    95.00 $108.80

(1) A three-way collar is a combination of options: a sold call, a
 purchased put and a sold put. The sold call establishes the maximum
 price that PVA will receive for the contracted commodity volumes. The
 purchased put establishes the minimum price that PVA will receive for
 the contracted volumes unless the market price for the commodity
 falls below the sold put strike price, at which point the minimum
 price equals the reference price (i.e., NYMEX) plus the excess of the
 purchased put strike price over the sold put strike price.

We estimate that excluding the derivative positions described above,
 for every $1.00 per MMBtu decrease or increase in natural gas prices,
 our operating income from oil and gas operations for the last nine
 months of 2008 would increase or decrease by approximately $20.0
 million. This assumes that natural gas production remains constant at
 forecasted levels. In addition, we also estimate that for every $5.00
 per barrel increase or decrease in the oil prices, our operating
 income from oil and gas operations would increase or decrease by
 approximately $2.0 million. This assumes that crude oil, condensate
 and other natural gas liquids production remains constant at
 forecasted levels. These estimated changes in operating income
 exclude the potential cash receipts or payments in settling these
 derivative positions.

b - The costless collar natural gas prices per MMBtu per quarter
 include the effects of basis differentials, if any.

                                             Weighted Average Price
                                                      Collars
                                            --------------------------

                     Average     Weighted   Additional
                      Volume      Average      Put
                      Per Day       Price     Option     Put    Call
                     ---------   ---------- ---------- ------- -------

 Frac spread              (in         (per
                        MMBtu)       MMBtu)
 Second quarter 2008
  through fourth
  quarter 2008           7,824   $     5.02

 Ethane sale swap         (in         (per
                      gallons)      gallon)
 Second quarter 2008
  through fourth
  quarter 2008          34,440   $   0.4700

 Propane sale swaps       (in         (per
                      gallons)      gallon)
 Second quarter 2008
  through fourth
  quarter 2008          26,040   $   0.7175

 Crude oil sale           (in         (per
  swaps               barrels)      barrel)
 Second quarter 2008
  through fourth
  quarter 2008             560   $    49.27

 Natural gasoline         (in                           (per gallon)
  collar              gallons)
 Second quarter 2008
  through fourth
  quarter 2008           6,300                         $1.4800 $1.6465

 Crude oil collar         (in                           (per barrel)
                      barrels)
 Second quarter 2008
  through fourth
  quarter 2008             400                         $ 65.00 $ 75.25

 Natural gas sale         (in         (per
  swaps                 MMBtu)       MMBtu)
 Second quarter 2008
  through fourth
  quarter 2008           4,000   $     6.97

 Crude oil three-way      (in                           (per gallon)
  collar              barrels)
 First quarter 2009
  through fourth
  quarter 2009           1,000              $    70.00 $ 90.00 $119.25


c - We estimate that excluding the derivative positions described
 above, for every $1.00 per MMBtu decrease or increase in natural gas
 prices from the $7.50 per MMBtu budgeted 2008 benchmark price,
 natural gas midstream gross processing margin and operating income in
 2008 would increase or decrease by approximately $7.2 million. This
 assumes oil and other liquids prices and inlet volumes remain
 constant at budgeted levels. In addition, we also estimate that
 excluding the derivative positions described above, for every $5.00
 per barrel increase or decrease in the oil prices from the $80.00 per
 barrel budgeted 2008 benchmark price, natural gas midstream gross
 processing margin and operating income would increase or decrease by
 approximately $3.2 million. This assumes natural gas prices and inlet
 volumes remain constant at budgeted levels. These estimated changes
 in gross processing margin and operating income exclude the potential
 cash receipts or payments in settling these derivative positions.

d - Year-to-date 2008 results and full-year 2008 guidance reflects
 increased incentive compensation costs in general and administrative
 expense.

e - PVA capitalizes a portion of interest expense incurred to
 recognize the carrying cost of certain unproved properties as
 required by GAAP.

f - PVA controls the general partner of PVG and owns an 82 percent
 limited partner interest in PVG. PVG's operating results are included
 in PVA's consolidated financial statements, and minority interest
 reflects the 18 percent of PVG owned by parties other than PVA.

g - Deferred federal and state income taxes are expected to comprise
 approximately 60% to 70% of PVA's income tax expense for the full
 year.

h - 2008 amounts received are dependent primarily upon distributions
 paid by PVG.

Source: Penn Virginia Corporation