New book by Larry Connors Click here Improve your trading - See how
Third Quarter 2009 Highlights
Third quarter 2009 results, with comparisons to third quarter 2008 results, included the following:
-- Quarterly oil and gas production of 134.9 million cubic feet of natural gas equivalent (MMcfe) per day, or 12.4 billion cubic feet of natural gas equivalent (Bcfe), a six percent increase as compared to oil and gas production of 127.1 MMcfe per day, or 11.7 Bcfe;
-- Increased 2009 guidance for production to a range of 49.0 to 51.0 Bcfe, or six to nine percent higher than 2008, as a result of better than expected third quarter volumes;
-- Operating cash flow, a non-GAAP (generally accepted accounting principles) measure, of $64.0 million as compared to operating cash flow of $97.5 million;
-- Adjusted net loss, a non-GAAP measure which excludes the effects of the non-cash change in derivatives fair value, drilling rig standby charges, impairments and gains or losses that affect comparability to the prior year period, of $11.2 million, or $0.25 per diluted share, as compared to adjusted net income of $14.0 million, or $0.33 per diluted share;
-- Net loss attributable to PVA of $79.9 million, or $1.76 per diluted share, as compared to net income of $123.0 million, or $2.88 per diluted share. The third quarter of 2009 included an $87.9 million non-cash impairment charge on non-core properties held for sale, while the third quarter of 2008 included $154.9 million of a non-cash change in derivatives fair value and gains on the sale of assets; and
-- Subsequent to the end of the third quarter, we completed the syndication of a new 3-year senior secured revolving credit facility with an initial undrawn commitment of $300 million supported by a $420 million approved borrowing base, a 14 percent increase over the current $367 million borrowing base.
Reconciliations of non-GAAP financial measures to GAAP-based measures appear in the financial tables later in this release.
Management Comment
A. James Dearlove, President and Chief Executive Officer, said, "Although declines in commodity prices and a decision to sell non-core properties in the Gulf Coast region impacted our financial results, we are pleased with our third quarter 2009 operational results. As detailed in our separate operational update, third quarter production was better than anticipated and, accordingly, we have increased full year 2009 production guidance. In addition, due to the improved outlook for natural gas, recent positive results in our core plays and our improved financial liquidity, we have resumed operated drilling in the Lower Bossier (Haynesville) Shale and Granite Wash plays.
"During the third quarter of 2009, we raised approximately $118 million from the sale of PVG units. As a result, we have substantially improved our financial liquidity, with $300 million of unused availability on our revolving credit facility and over $90 million of cash on hand. Furthermore, we expect to complete the sale of non-core properties, primarily along the Texas and Louisiana Gulf Coast, during the fourth quarter of 2009 which will further augment our cash liquidity. The net effect of both transactions is very positive to our cash and liquidity situation and better positions our company for future growth as a more focused, resource play-driven exploration and production company.
"Our commodity price hedges provided cash flow protection, increasing third quarter effective price realizations from $3.45 per Mcf to $4.90 per Mcf for natural gas. For the fourth quarter of 2009, we have hedged approximately 82 percent of our estimated natural gas production at average respective floor and ceiling prices of $6.41 and $8.11 per million British thermal units (MMBtu), and 57 percent of our estimated crude oil production at average floor and ceiling prices of approximately $80 and $120 per barrel. For 2010, we have hedged approximately 60 percent of our estimated natural gas production at average respective floor and ceiling prices of $6.09 and $8.19 per MMBtu, assuming flat production from the fourth quarter of 2009. In addition to the cash flow support our hedges have provided, our unit cash costs have continued to improve, including a 15 percent reduction from the prior year quarter and in line with the second quarter of 2009 in spite of the sequential production decline.
"In addition to our core oil and gas exploration and production business segment, we own 51 percent of Penn Virginia GP Holdings, L.P. (NYSE: PVG), which was reduced from 77 percent by our sale of PVG units during the third quarter. PVG owns the general partner of Penn Virginia Resource Partners, L.P. (NYSE: PVR) and is PVR's largest limited partner unitholder. As the owner of the general partner and largest unitholder of PVG, we report our financial results on a consolidated basis with the financial results of PVG. At current distribution rates, which have not changed since the third quarter of 2008, our ownership of PVG and PVR provides approximately $30 million of annualized pre-tax cash flow to us, which we re-deploy into our oil and gas segment."
Oil and Gas Segment Review
Third quarter oil and gas production grew six percent to 134.9 MMcfe per day, or 12.4 Bcfe, from 127.1 MMcfe per day, or 11.7 Bcfe, in the third quarter of 2008, and was nine percent lower than 148.9 MMcfe per day, or 13.6 Bcfe in the second quarter of 2009. See our separate operational update news release dated October 30, 2009 for a more detailed discussion of operations for the oil and gas segment.
During the third quarter of 2009, oil and gas segment operating income decreased by $203.6 million as compared to the prior year quarter to an operating loss of $114.6 million. The decrease was due to a $92.4 million increase in impairments, a $101.0 million, or 64 percent, decrease in revenues, a $7.8 million, or 93 percent, increase in exploration expense and a $2.5 million, or four percent, increase in other operating expenses. The decrease in revenues was due to sharp declines in realized commodity prices before considering support from related hedges -- a 66 percent decrease in the natural gas price, a 44 percent decrease in the oil price and a 55 percent decrease in the price of natural gas liquids (NGLs) -- offset in part by the six percent increase in oil and gas production.
The $102.7 million increase in operating expenses was due to an $87.9 million non-cash impairment charge on assets held for sale pertaining to the Gulf Coast region, a $6.7 million increase in depreciation, depletion and amortization (DD&A) expense, a $4.5 million impairment charge primarily related to Bakken properties in North Dakota and $3.7 million of rig standby charges. These increases in operating expenses were partially offset by a $2.4 million decrease in production taxes due to lower commodity prices and a $1.8 decrease in lease operating expenses despite the production increase. The impairment charge on the Gulf Coast properties relates to a reduction in the carrying value of the assets to a level which is in line with the expected proceeds from their sale, expected during the fourth quarter.
In the third quarter of 2009, total oil and gas segment expenses, excluding the impairment and rig standby charges, increased by $6.6 million, or 11 percent, to $74.3 million, or $5.99 per Mcfe produced, from $67.7 million, or $5.79 per Mcfe produced, in the third quarter of 2008, as discussed below:
-- Third quarter 2009 cash operating expenses of $22.6 million, or $1.82 per Mcfe produced, were $4.1 million, or 15 percent, lower than the $26.7 million, or $2.29 per Mcfe produced, in the third quarter of 2008. The decrease in unit cash operating expenses was primarily due to lower taxes other than income and lower lease operating expense, as discussed below: -- Lease operating expense decreased 17 percent to $1.07 per Mcfe from $1.29 per Mcfe primarily due to decreased overall service costs due to sharply lower commodity prices and reduced water disposal and other costs as compared to the prior year quarter;
-- Taxes other than income decreased 39 percent to $0.34 per Mcfe from $0.56 per Mcfe primarily due to decreased severance taxes related to sharply lower commodity prices; and
-- Segment general and administrative (G&A) expense decreased seven percent to $0.41 per Mcfe as compared to $0.44 per Mcfe primarily due to the production increase.
-- Exploration expense, excluding drilling rig standby charges discussed below, increased 49 percent to $12.4 million in the third quarter of 2009, as compared to $8.3 million in the prior year quarter, primarily due to increased amortization of unproved properties related to higher leasehold acquisition costs in our East Texas, Mid-Continent and Gulf Coast regions.
-- DD&A expense increased by $6.7 million, or 20 percent, to $39.3 million, or $3.17 per Mcfe, in the third quarter of 2009 from $32.7 million, or $2.79 per Mcfe, in the prior year quarter. The overall increase in DD&A expense was primarily due to the production increase and a higher depletion rate per unit of production. The higher depletion rate was primarily due to (i) higher drilling costs on our new horizontal plays and (ii) commodity price and performance-related downward reserve revisions in the non-core Gulf Coast fields, expected to be sold during the fourth quarter of 2009, and on early-stage wells in the Lower Bossier (Haynesville) Shale play.
In the first quarter of 2009, we opted to defer the drilling of wells in several of our plays due to unfavorable economic conditions. As a result, we amended certain drilling rig contracts to delay commencement of drilling until January 2010. In the third quarter of 2009, we expensed approximately $3.7 million for lump sum delay fees, minimum daily standby fees and demobilization fees expected to be paid during the standby period. Continued deferral of the rigs could result in additional standby expense of $0.5 to $1.5 million during the fourth quarter of 2009.
During the third quarter of 2009, we incurred approximately $92.4 million of impairments. These charges were primarily related to the $87.9 million write-down in value of proved properties in our Gulf Coast region to a carrying value that is in line with the expected proceeds from the anticipated sale of these assets, expected during the fourth quarter of 2009.
Coal & Natural Resource Management and Natural Gas Midstream Segment Review (PVR and PVG)
As the owner of the general partner and largest unitholder of PVG, we report our financial results on a consolidated basis with the financial results of PVG. 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 are therefore highlighted. We believe 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. Financial and operational results and full-year 2009 guidance for each of PVR's 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 November 4, 2009. Please visit PVR's website, www.pvresource.com, under "For Investors" for a copy of the release.
During the third quarter of 2009, we sold 10.0 million units of PVG to the public for net proceeds of $118.1 million. The net proceeds were used to repay the entire outstanding balance on our revolving credit facility and the remainder of approximately $68 million was held as cash. As a result, our position in PVG was reduced from 30.1 million units, or 77 percent, to 20.1 million units, or 51 percent.
As previously announced, on November 18, 2009, PVG will pay to unitholders of record as of November 6, 2009 a quarterly cash distribution of $0.38 per unit, or an annualized rate of $1.52 per unit, covering the period of July 1 through September 30, 2009. The distribution remains unchanged from the distribution paid with respect to each of the previous four quarters. As a result of PVG's distribution, we will receive a cash distribution of $7.6 million in the fourth quarter of 2009, or $30.5 million on an annualized basis.
Capital Resources, Credit Facility and Impact of Derivatives
We have completed the syndication of a new 3-year senior secured revolving credit facility with an initial undrawn commitment of $300 million supported by a $420 million approved borrowing base, a 14 percent increase over the current $367 million borrowing base. The new facility is provided by a syndicate of 12 banks, led by J.P. Morgan Securities Inc., with no individual bank holding more than ten percent of the total commitment. Pricing for the new credit facility will be unchanged from the existing facility. The credit facility will close subject to final document review by the bank group.
As of September 30, 2009, we had outstanding borrowings of $530.0 million ($496.4 million carrying value), consisting of $300 million ($291.4 million carrying value) of senior unsecured notes due 2016 and $230.0 million ($204.9 million carrying value) of convertible senior subordinated notes due 2012 and no borrowings against our revolving credit facility. The $32.0 million decrease in outstanding borrowings as compared to the $562.0 million at December 31, 2008 was primarily due to the repayment of revolver debt following a $64.9 million offering of PVA common shares in May 2009 and a $118.1 million offering of PVG common units in September 2009, as well as free cash flow during the third quarter of 2009, net of spending to fund our oil and gas capital expenditures during the first nine months of 2009. As of September 30, 2009, we had $300 million of unused availability on our revolving credit facility and over $90 million of cash on hand.
As of September 30, 2009, PVR had outstanding borrowings of $628.1 million under its $800 million revolving credit facility with remaining revolver borrowing capacity of $170.3 million. The $60.0 million increase in outstanding PVR borrowings as compared to $568.0 million outstanding as of December 31, 2008 was primarily due to PVR capital expenditures during the first nine months of 2009.
Consolidated interest expense increased from $13.2 million in the third quarter of 2008 to $22.8 million in the third quarter of 2009. The increase was due to a higher interest rate on the senior unsecured notes PVA issued in June 2009 and higher average level of outstanding borrowings during the third quarter of 2009 as compared to the prior year quarter.
Due to decreases in natural gas and crude oil prices experienced during the third quarter, the mark-to-market valuation of our and PVR's open hedging positions resulted in derivatives income of $2.5 million in the third quarter as compared to derivatives income of $125.1 million in the prior year quarter. Included in derivatives income for the third quarter of 2009 was $0.3 million of income related to our oil and gas segment and $2.8 million of expense related to PVR. Third quarter 2009 cash settlements of our oil and gas derivatives resulted in net cash receipts of $15.8 million, as compared to $5.7 million of net cash payments in the same quarter of 2008. PVR's third quarter 2009 cash settlements of commodity and interest rate derivatives result in net cash payments of $0.3 million, as compared to $14.1 million of net cash payments in the same quarter of 2008.
Guidance for 2009
See the Guidance Table included in this release for guidance estimates for full-year 2009. These estimates, including capital expenditure plans, which were discussed in our operational update, are meant to provide guidance only and are subject to revision as our and PVR's operating environments change.
Third Quarter 2009 Financial and Operational Results Conference Call
A conference call and webcast, during which management will discuss third quarter 2009 financial and operational results, is scheduled for Thursday, November 5, 2009 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 1-866-630-9986 five to ten minutes before the scheduled start of the conference call and using the passcode 4836740, or via webcast by logging on to our 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 will be available approximately two hours after the call for two weeks by dialing toll free 888-203-1112 (international: 719-457-0820) and using the replay code 4836740. In addition, an on-demand replay of the webcast will also be available for two weeks at PVG's or PVR's websites beginning 24 hours after the webcast.
Penn Virginia Corporation (NYSE: PVA | Quote | Chart | News | PowerRating) 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 East Texas, Mississippi, the Mid-Continent region and the Appalachian Basin. We also own approximately 51 percent of PVG, the owner of the general partner and the largest unit holder of 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, NGLs, crude oil and coal; our ability to access external sources of capital; uncertainties relating to the occurrence and success of capital-raising transactions, including securities offerings and asset sales; reductions in the borrowing base under our Revolver; our ability to develop and replace oil and gas reserves and the price for which such reserves can be acquired; any impairment write-downs of our reserves or assets; reductions in our anticipated capital expenditures; the relationship between natural gas, NGL, crude oil and coal prices; the projected demand for and supply of natural gas, NGLs, crude oil 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 differ 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; whether the sale of our Gulf Coast assets closes during the fourth quarter and at the anticipated price; operating risks, including unanticipated geological problems, incidental to our business and to PVR's coal or natural gas midstream businesses; 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 and credit markets) and political conditions (including the impact of potential terrorist attacks); PVG's ability to generate sufficient cash from its interests in PVR to maintain and pay the quarterly distribution to its unitholders; uncertainties relating to our continued ownership of interests in PVG and PVR; and other risks set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
Additional information concerning these and other factors can be found in our press releases and public periodic filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2008. 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 a result of new information, future events or otherwise.
PENN VIRGINIA CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS - unaudited
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 (a) 2009 2008 (a)
Revenues
Natural gas $ 36,654 $ 101,911 $ 129,305 $ 295,636
Crude oil 13,259 13,764 31,412 37,442
Natural gas liquids (NGLs) 2,847 10,481 10,553 18,887
Natural gas midstream 102,262 184,914 289,123 494,260
Coal royalties 29,821 33,308 90,448 88,911
Gain on sale of property and equipment 1,945 31,279 1,918 31,335
Other 8,375 9,955 25,481 28,690
Total revenues 195,163 385,612 578,240 995,161
Expenses
Cost of midstream gas purchased 77,248 155,564 228,579 408,247
Operating 21,167 23,437 66,517 66,653
Exploration 12,405 8,346 34,587 19,765
Exploration - drilling rig standby charges - (b) 3,712 - 20,314 -
Taxes other than income 5,294 7,671 16,656 23,325
General and administrative (excluding equity compensation) 16,309 16,211 47,481 49,299
Equity-based compensation - (c) 3,637 2,078 11,306 5,707
Depreciation, depletion and amortization 57,869 49,978 173,160 133,481
Impairments on assets held for sale 87,900 - 87,900 -
Impairments 4,453 - 8,928 -
Loss on sale of assets - - 1,599 -
Total expenses 289,994 263,285 697,027 706,477
Operating income (loss) (94,831 ) 122,327 (118,787 ) 288,684
Other income (expense)
Interest expense (22,784 ) (13,221 ) (50,332 ) (35,313 )
Derivatives (2,529 ) 125,132 8,478 (4,387 )
Other 348 (4,088 ) 2,274 (782 )
Income (loss) before income taxes and noncontrolling interests (119,796 ) 230,150 (158,367 ) 248,202
Income tax benefit (expense) 50,405 (78,921 ) 69,587 (74,352 )
Net income (loss) $ (69,391 ) $ 151,229 $ (88,780 ) $ 173,850
Less net income attributable to noncontrolling interests (10,509 ) (28,276 ) (20,512 ) (52,252 )
Income (loss) attributable to PVA $ (79,900 ) $ 122,953 $ (109,292 ) $ 121,598
Income (loss) per share attributable to PVA
Basic $ 1.76 $ 2.94 $ 2.52 $ 2.91
Diluted $ 1.76 $ 2.88 $ 2.52 $ 2.88
Weighted average shares outstanding, basic 45,427 41,881 43,324 41,715
Weighted average shares outstanding, diluted 45,427 42,544 43,324 42,028
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Production
Natural gas (MMcf) 10,634 10,046 33,858 29,869
Crude oil (MBbls) 202 117 588 331
NGLs (MBbls) 94 157 381 300
Total natural gas, crude oil and NGL production (MMcfe) 12,410 11,690 39,672 33,655
Prices
Natural gas ($ per Mcf) $ 3.45 $ 10.14 $ 3.82 $ 9.90
Crude oil ($ per Bbl) $ 65.64 $ 117.64 $ 53.42 $ 113.12
NGLs ($ per Bbl) $ 30.29 $ 66.76 $ 27.70 $ 62.96
(a) As a result of adopting accounting guidance for convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement), we are required to present our results of operations retrospectively as if the standard had been in effect for all periods presented. (b) Drilling rig standby charges represent fees paid in connection with the deferral of drilling associated with contractually committed rigs and frac tank rentals. (c) Our equity-based compensation expense includes our stock option expense and the amortization of restricted stock and restricted stock units related to employee awards in accordance with accounting guidance of share-based payments.
PENN VIRGINIA CORPORATION
CONSOLIDATED BALANCE SHEETS - unaudited
(in thousands)
September 30, December 31,
2009 2008
Assets
Current assets $ 293,483 $ 263,518
Net property and equipment 2,372,323 2,512,177
Other assets 235,463 220,870
Total assets $ 2,901,269 $ 2,996,565
Liabilities and shareholders' equity
Current liabilities $ 145,356 $ 247,594
Long-term debt of PVR 628,100 568,100
Revolving credit facility - 332,000
Senior notes 291,432 -
Convertible notes 204,935 199,896
Other liabilities and deferred taxes 268,834 312,645
PVA shareholders' equity 1,029,381 1,039,103
Noncontrolling interests 333,231 297,227
Total shareholders' equity 1,362,612 1,336,330
Total liabilities and shareholders' equity $ 2,901,269 $ 2,996,565
CONSOLIDATED STATEMENTS OF CASH FLOWS - unaudited
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Cash flows from operating activities
Net income (loss) $ (69,391 ) $ 151,229 $ (88,780 ) $ 173,850
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation, depletion and amortization 57,869 49,978 173,160 133,481
Impairments 92,353 - 96,828 -
Derivative contracts:
Total derivative losses (gains) 6,312 (123,628 ) (2,821 ) 8,516
Cash receipts (payments) to settle derivatives 15,507 (19,755 ) 51,936 (46,740 )
Deferred income taxes (51,928 ) 61,552 (70,728 ) 60,105
Dry hole and unproved leasehold expense 10,593 5,520 30,476 14,992
Other 2,685 (27,374 ) 16,064 (26,118 )
Operating cash flow (see attached table
"Certain Non-GAAP Financial Measures") 64,000 97,522 206,135 318,086
Changes in operating assets and liabilities 20,046 (5,727 ) 15,888 (41,399 )
Net cash provided by operating activities 84,046 91,795 222,023 276,687
Cash flows from investing activities
Acquisitions (32,068 ) (162,078 ) (38,261 ) (278,185 )
Additions to property and equipment (25,363 ) (162,857 ) (218,558 ) (392,031 )
Other 2,876 33,215 8,698 33,954
Net cash used in investing activities (54,555 ) (291,720 ) (248,121 ) (636,262 )
Cash flows from financing activities
Dividends paid (2,559 ) (2,351 ) (7,278 ) (7,037 )
Distributions paid to noncontrolling interest holders (18,455 ) (17,917 ) (55,365 ) (45,829 )
Proceeds from (repayments of) bank borrowings - 46,431 (7,542 ) 46,431
Net proceeds from (repayments of) PVA borrowings (70,000 ) (25,000 ) (332,000 ) 58,000
Net proceeds from PVR borrowings 31,000 176,600 60,000 146,000
Net proceeds from issuance of PVA senior notes - - 291,009 -
Net proceeds from issuance of PVR partners' capital - - - 138,015
Net proceeds from sale of PVG units 118,080 - 118,080 -
Net proceeds from issuance of PVA equity - - 64,835 -
Other (860 ) (2,311 ) (18,945 ) 8,475
Net cash provided by financing activities 57,206 175,452 112,794 344,055
Net increase (decrease) in cash and cash equivalents 86,697 (24,473 ) 86,696 (15,520 )
Cash and cash equivalents - beginning of period 18,337 43,480 18,338 34,527
Cash and cash equivalents - end of period $ 105,034 $ 19,007 $ 105,034 $ 19,007
PENN VIRGINIA CORPORATION
QUARTERLY SEGMENT INFORMATION - unaudited
(in thousands except where noted)
Three Months Ended September 30, 2009 Oil and Gas Coal and Natural Natural Gas Other Consolidated
Resource Midstream
Management
Amount per Mcfe (a)
Production
Total natural gas, crude oil and NGLs (MMcfe) 12,410
Natural gas (MMcf) 10,634
Crude oil (MBbls) 202
NGLs (MBbls) 94
Coal royalty tons (thousands of tons) 8,387
Midstream system throughput volumes (MMcf) 29,811
Revenues
Natural gas $ 36,654 $ 3.45 $ - $ - $ - $ 36,654
Crude oil 13,259 65.64 - - - 13,259
NGLs 2,847 30.29 - - - 2,847
Natural gas midstream - - 118,443 (16,181 ) 102,262
Coal royalties - 29,821 - - 29,821
Gain on sale of property and equipment 1,945 - - - 1,945
Other 1,043 5,358 2,003 (29 ) 8,375
Total revenues 55,748 4.49 35,179 120,446 (16,210 ) 195,163
Expenses
Cost of midstream gas purchased - - 92,355 (15,107 ) 77,248
Operating expense 13,277 1.07 2,146 6,884 (1,140 ) 21,167
Exploration 12,405 1.00 - - - 12,405
Exploration - drilling rig standby charges 3,712 0.30 - - - 3,712
Taxes other than income 4,186 0.34 421 584 103 5,294
General and administrative 5,133 0.41 3,388 4,180 7,245 19,946
Depreciation, depletion and amortization 39,326 3.17 7,999 9,852 692 57,869
Impairments on assets held for sale 87,900 7.08 - - - 87,900
Impairments 4,453 0.36 - - - 4,453
Total expenses 170,392 13.73 13,954 113,855 (8,207 ) 289,994
Operating income (loss) $ (114,644 ) $ (9.24 ) $ 21,225 $ 6,591 $ (8,003 ) $ (94,831 )
Additions to property and equipment $ 18,059 $ 140 $ 39,031 $ 201 $ 57,431
Three Months Ended September 30, 2008 Oil and Gas Coal and Natural Natural Gas Other Consolidated
Resource Midstream
Management
Amount per Mcfe (a)
Production
Total natural gas, crude oil and NGLs (MMcfe) 11,690
Natural gas (MMcf) 10,046
Crude oil (MBbls) 117
NGLs (MBbls) 157
Coal royalty tons (thousands of tons) 8,496
Midstream system throughput volumes (MMcf) 27,744
Revenues
Natural gas $ 101,911 $ 10.14 $ - $ - $ - $ 101,911
Crude oil 13,764 117.64 - - - 13,764
NGLs 10,481 66.76 - - - 10,481
Natural gas midstream - - 241,282 (56,368 ) 184,914
Coal royalties - 33,308 - - 33,308
Gain on sale of property and equipment 30,509 770 31,279
Other 60 7,582 2,334 (21 ) 9,955
Total revenues 156,725 13.41 41,660 243,616 (56,389 ) 385,612
Expenses
Cost of midstream gas purchased - - 211,262 (55,698 ) 155,564
Operating expense 15,067 1.29 2,877 6,164 (671 ) 23,437
Exploration 8,346 0.71 - - - 8,346
Taxes other than income 6,537 0.56 373 596 165 7,671
General and administrative 5,122 0.44 3,321 3,757 6,089 18,289
Depreciation, depletion and amortization 32,665 2.79 8,794 8,109 410 49,978
Total expenses 67,737 5.79 15,365 229,888 (49,705 ) 263,285
Operating income (loss) $ 88,988 $ 7.62 $ 26,295 $ 13,728 $ (6,684 ) $ 122,327
Additions to property and equipment $ 213,573 $ 497 $ 110,606 $ 259 $ 324,935
(a) Natural gas revenues are shown per Mcf, crude oil and NGL revenues are shown per Bbl, and all other amounts are shown per Mcfe.
PENN VIRGINIA CORPORATION
YEAR-TO-DATE SEGMENT INFORMATION - unaudited
(in thousands except where noted)
Coal and Natural Natural Gas
Resource Midstream
Management
Nine Months Ended September 30, 2009 Oil and Gas
Amount per Mcfe (a) Other Consolidated
Production
Total natural gas, crude oil and NGLs (MMcfe) 39,672
Natural gas (MMcf) 33,858
Crude oil (MBbls) 588
NGLs (MBbls) 381
Coal royalty tons (thousands of tons) 25,874
Midstream system throughput volumes (MMcf) 93,433
Revenues
Natural gas $ 129,305 $ 3.82 $ - $ - $ - $ 129,305
Crude oil 31,412 53.42 - - - 31,412
NGLs 10,553 27.70 - - - 10,553
Natural gas midstream - - 348,882 (59,759 ) 289,123
Coal royalties - 90,448 - - 90,448
Gain on sale of property and equipment 1,918 - - - 1,918
Other 2,904 18,127 4,346 104 25,481
Total revenues 176,092 4.44 108,575 353,228 (59,655 ) 578,240
Expenses
Cost of midstream gas purchased - - 285,129 (56,550 ) 228,579
Operating expense 42,788 1.08 6,580 20,358 (3,209 ) 66,517
Exploration 34,587 0.87 - - - 34,587
Exploration - drilling rig standby charges 20,314 0.51 - - - 20,314
Taxes other than income 12,756 0.32 1,146 2,062 692 16,656
General and administrative 15,970 0.40 10,760 12,661 19,396 58,787
Depreciation, depletion and amortization 119,242 3.04 23,557 28,414 1,947 173,160
Impairments on assets held for sale 87,900 2.22 - - - 87,900
Impairments 8,928 0.23 - - - 8,928
Other 1,599 0.04 - - - 1,599
Total expenses 344,084 8.67 42,043 348,624 (37,724 ) 697,027
Operating income (loss) $ (167,992 ) $ (4.23 ) $ 66,532 $ 4,604 $ (21,931 ) $ (118,787 )
Additions to property and equipment $ 181,873 $ 2,046 $ 71,245 $ 1,655 $ 256,819
Coal and Natural Natural Gas
Resource Midstream
Management
Nine Months Ended September 30, 2008 Oil and Gas
Amount per Mcfe (a) Other Consolidated
Production
Total natural gas, crude oil and NGLs (MMcfe) 33,655
Natural gas (MMcf) 29,869
Crude oil (MBbls) 331
NGLs (MBbls) 300
Coal royalty tons (thousands of tons) 24,975
Midstream system throughput volumes (MMcf) 68,915
Revenues
Natural gas $ 295,636 $ 9.90 $ - $ - $ - $ 295,636
Crude oil 37,442 113.12 - - - 37,442
NGLs 18,887 62.96 - - - 18,887
Natural gas midstream - - 601,127 (106,867 ) 494,260
Coal royalties - 88,911 - - 88,911
Gain on sale of property and equipment 30,543 - - - 30,543
Other 883 22,099 6,458 42 29,482
Total revenues 383,391 11.39 111,010 607,585 (106,825 ) 995,161
Expenses
Cost of midstream gas purchased - - 513,778 (105,531 ) 408,247
Operating expense 43,370 1.29 9,522 15,031 (1,270 ) 66,653
Exploration 19,765 0.59 - - - 19,765
Taxes other than income 19,480 0.58 1,115 1,902 828 23,325
General and administrative 14,869 0.44 9,780 10,559 19,798 55,006
Depreciation, depletion and amortization 90,849 2.70 22,733 18,589 1,310 133,481
Total expenses 188,333 5.60 43,150 559,859 (84,865 ) 706,477
Operating income (loss) $ 195,058 $ 5.79 $ 67,860 $ 47,726 $ (21,960 ) $ 288,684
Additions to property and equipment $ 422,975 $ 25,186 $ 220,997 $ 1,058 $ 670,216
(a) Natural gas revenues are shown per Mcf, crude oil and NGL 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 Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Reconciliation of GAAP "Net cash
provided by operating activities" to Non-GAAP "Operating cash flow"
Net cash provided by operating activities $ 84,046 $ 91,795 $ 222,023 $ 276,687
Adjustments:
Changes in operating assets and liabilities (20,046 ) 5,727 (15,888 ) 41,399
Operating cash flow (a) $ 64,000 $ 97,522 $ 206,135 $ 318,086
Reconciliation of GAAP "Net
income (loss) attributable to PVA" to Non-GAAP "Net income (loss)
attributable to PVA, as adjusted"
Net income (loss) attributable to PVA $ (79,900 ) $ 122,953 $ (109,292 ) $ 121,598
Adjustments for derivatives:
Derivative losses (gains) included in income 6,312 (123,628 ) (2,821 ) 8,516
Cash receipts (payments) to settle derivatives 15,507 (19,755 ) 51,936 (46,740 )
Adjustment for drilling rig standby charges 3,712 - 20,314 -
Adjustment for impairments 92,353 - 96,828 -
Adjustment for net gains on sale of assets (1,945 ) (31,279 ) (319 ) (31,335 )
Impact of adjustments on noncontrolling interests (2,579 ) 16,755 (9,494 ) 13,649
Impact of adjustments on income taxes (44,621 ) 49,139 (60,859 ) 9,339
$ (11,161 ) $ 14,185 $ (13,707 ) $ 75,027
Less: Portion of subsidiary net income (loss) allocated to (44 ) (219 ) (68 ) (418 )
undistributed share-based compensation awards, net of taxes
Net income (loss) attributable to PVA, as adjusted (b) $ (11,205 ) $ 13,966 $ (13,775 ) $ 74,609
Net income (loss) attributable to PVA, as adjusted, per share, $ (0.25 ) $ 0.33 $ (0.32 ) $ 1.78
diluted
(a) Operating cash flow represents net cash provided by operating activities before changes in operating assets and liabilities. We believe that operating cash flow is widely accepted as a financial indicator of an energy company's ability to generate cash which is used to internally fund investing activities, service debt and pay dividends. Operating cash flow is widely used by investors and professional research analysts in the valuation, comparison, rating and investment recommendations of companies within the energy industry. Operating cash flow is presented because we believe it is a useful adjunct to net cash provided by operating activities under GAAP. 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, as a measure of liquidity or as an alternative to net income. (b) Net income (loss) attributable to PVA, as adjusted, represents net income (loss) attributable to PVA adjusted to exclude the effects of non-cash changes in the fair value of derivatives, drilling rig standby charges, impairments, gains and losses on the sale of assets, and net income of PVR allocated to unvested PVR restricted units awarded as equity compensation that we hold until vesting. We believe this presentation is commonly 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, as well as companies within the natural gas midstream industry. We use this information for comparative purposes within these industries. Net income (loss) attributable to PVA, as adjusted, is not a measure of financial performance under GAAP and should not be considered as a measure of liquidity or as an alternative to net income attributable to PVA.
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" (a):
Three Months Ended September 30, 2009 Three Months Ended September 30, 2008
As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted
Revenues
Natural gas $ 36,654 $ - $ 36,654 $ 101,911 $ - $ 101,911
Crude oil 13,259 - 13,259 13,764 - 13,764
NGLs 2,847 - 2,847 10,481 - 10,481
Natural gas midstream 102,262 (102,262 ) - 184,914 (184,914 ) -
Coal royalties 29,821 (29,821 ) - 33,308 (33,308 ) -
Other 10,320 (7,361 ) 2,959 41,234 (10,686 ) 30,548
Total revenues 195,163 (139,444 ) 55,719 385,612 (228,908 ) 156,704
Expenses
Cost of midstream gas purchased 77,248 (77,248 ) - 155,564 (155,564 ) -
Operating 21,167 (9,030 ) 12,137 23,437 (8,371 ) 15,066
Exploration 12,405 - 12,405 8,346 - 8,346
Exploration - drilling rig standby charges 3,712 - 3,712 - - -
Taxes other than income 5,294 (1,005 ) 4,289 7,671 (969 ) 6,702
General and administrative 19,946 (8,481 ) 11,465 18,289 (7,618 ) 10,671
Depreciation, depletion and amortization 57,869 (17,851 ) 40,018 49,978 (16,903 ) 33,075
Impairments on properties held for sale 87,900 - 87,900 - - -
Impairments 4,453 - 4,453 - - -
Loss on sale of assets - - - - - -
Total expenses 289,994 (113,615 ) 176,379 263,285 (189,425 ) 73,860
Operating income (loss) (94,831 ) (25,829 ) (120,660 ) 122,327 (39,483 ) 82,844
Other income (expense)
Interest expense (22,784 ) 6,505 (16,279 ) (13,221 ) 7,060 (6,161 )
Derivatives (2,529 ) 2,810 281 125,132 (15,742 ) 109,390
Equity earnings in PVG and PVR - 6,349 6,349 - 15,771 15,771
Other 348 (344 ) 4 (4,088 ) 4,118 30
Income (loss) before taxes and noncontrolling interests (119,796 ) (10,509 ) (130,305 ) 230,150 (28,276 ) 201,874
Income tax benefit (expense) 50,405 - 50,405 (78,921 ) - (78,921 )
Net income (loss) (69,391 ) (10,509 ) (79,900 ) 151,229 (28,276 ) 122,953
Less net income attributable to noncontrolling interests (10,509 ) 10,509 - (28,276 ) 28,276 -
Net income (loss) attributable to PVA $ (79,900 ) $ - $ (79,900 ) $ 122,953 $ - $ 122,953
Nine Months Ended September 30, 2009 Nine Months Ended September 30, 2008
As Reported Adjustments As Adjusted As Reported Adjustments As Adjusted
Revenues
Natural gas $ 129,305 $ - $ 129,305 $ 295,636 $ - $ 295,636
Crude oil 31,412 - 31,412 37,442 - 37,442
NGLs 10,553 - 10,553 18,887 - 18,887
Natural gas For full details on Penn Virginia Corp (PVA) click here. Penn Virginia Corp (PVA) has Short Term PowerRatings of 5. Details on Penn Virginia Corp (PVA) Short Term PowerRatings is available at This Link.
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
About TradingMarkets | Contact | Advertise | Careers | Link to Us | Site Map | Help | Terms & Conditions | Privacy Policy | Return Policy | Testimonials | Feedback
The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The Connors Group, Inc.
10 Exchange Place, Suite 1800
Jersey City, NJ 07302
© Copyright 2009 The Connors Group, Inc.