OilVoice - Penn Virginia Corporation Updates Full-Year 2009 Guidance

Penn Virginia Corporation Updates Full-Year 2009 Guidance

Saturday, March 07, 2009

Penn Virginia Corporation provides an update of full-year 2009 guidance and financial position.

Full-Year 2009 Guidance Update

Full-year 2009 guidance updates are as follows:
- Oil and gas capital expenditures guidance of $210.0 to $220.0 million, as compared to a range of $225.0 to $250.0 million of previous guidance; and
- Production guidance of 48.0 to 50.0 billion cubic feet of natural gas equivalent (Bcfe), or 131.5 to 137.0 million cubic feet of natural gas equivalent per day, as compared to a range of 51.0 to 53.0 Bcfe of previous guidance.

Due to the erosion of conditions in the commodity price environment over the past few weeks and continued uncertainty, full-year 2009 capital expenditures and related production guidance has been reduced. The reductions in capital expenditures will consist primarily of reduced well completion activity in Mississippi as well as reduced drilling and completion activity in the Mid-Continent region and south Louisiana.

In East Texas, we have determined that the Agnor #6-H, a recently completed well drilled to test the Lower Bossier Shale formation in the outer perimeter of the northern extent of our acreage position in Harrison County, TX, was unsuccessful. On the far western side of our Lower Bossier Shale acreage, the Hatley #15-H well has been completed and early indications appear positive. We will provide additional details regarding our East Texas drilling program in our next quarterly operational update.

A. James Dearlove, President and Chief Executive Officer of PVA, said:
“In February we reported strong results and growth for 2008, however, 2009 has become a much more challenging year for us and the energy industry as a whole. As a result, we have elected to take a very cautious approach to our capital spending plans in 2009. We continuously monitor the commodity price environment as it impacts our financial liquidity and will be flexible with our capital spending plans going forward. Despite the reduced drilling and completion activity levels we foresee at this time, our high quality asset base allows us to continue to maintain an ample inventory of drilling locations which can be exploited to facilitate resumed production growth when market conditions improve.”

Financial Position Update

As of March 5, 2009, total outstanding borrowings under the Company’s revolving credit facility were $384.0 million, with remaining availability of approximately $95 million. During the second quarter of 2009, the borrowing base supporting revolving credit facility will be re-determined by the bank group. In spite of significantly increased proved reserves as of December 31, 2008, the Company expects the current $479 million borrowing base will be reset to a lower level as a result of the weakened commodity price environment.