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Penn Virginia GP Holdings L.P. Common Un Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 11, 2009 08:08PM
Penn Virginia GP Holdings L.P. Common Un (PVG) filed Quarterly Report for the period ended 2009-03-31. PENN VIRGINIA GP HOLDINGS L.P. is a publicly traded Delaware limited partnership formed in June 2006 that currently owns the general partner of and three types of equity interests in Penn Virginia Resource Partners L.P. a publicly traded Delaware limited partnership that is principally engaged in the management of coal properties and the gathering and processing of natural gas. Penn Virginia GP Holdings L.P. Common Un has a market cap of $466.9 million; its shares were traded at around $11.95 with a P/E ratio of 9.4 and P/S ratio of 0.5. The dividend yield of Penn Virginia GP Holdings L.P. Common Un stocks is 12.7%.
Highlight of Business Operations:
Since 2001, PVR has increased its quarterly cash distribution from $0.25 per unit to $0.47 per unit, which is its most recently declared distribution. These increased cash distributions by PVR have placed us at the maximum target cash distribution level as described above and as a consequence, since reaching such level, we have received 50% of available cash in excess of $0.375 per unit.
PVR is a publicly traded Delaware limited partnership formed by Penn Virginia Corporation in 2001 that is principally engaged in the management of coal and natural resource properties and the gathering and processing of natural gas in the United States. Both in its current limited partnership form and in its previous corporate form, PVR has managed coal properties since 1882. PVR currently conducts operations in two business segments: (i) coal and natural resource management and (ii) natural gas midstream. Our operating income was $21.4 million in the three months ended March 31, 2009, compared to $30.6 million in the same period of 2008. In the three months ended March 31, 2009, the PVR coal and natural resource management segment contributed $24.9 million, or 117%, to operating income. This contribution to operating income is partially offset by $3.0 million of operating losses in the PVR natural gas midstream segment, or 14%, and $0.5 million of operating expenses from the corporate and other expenses, or 3%.
As of December 31, 2008, PVR owned or controlled approximately 827 million tons of proven and probable coal reserves in Central and Northern Appalachia, the San Juan Basin and the Illinois Basin. PVR enters into long-term leases with experienced, third-party mine operators, providing them the right to mine PVRs coal reserves in exchange for royalty payments. PVR actively works with its lessees to develop efficient methods to exploit its reserves and to maximize production from PVRs properties. PVR does not operate any mines. In the three months ended March 31, 2009, PVRs lessees produced 8.7 million tons of coal from its properties and paid to PVR coal royalties revenues of $30.6 million, for an average royalty per ton of $3.50. Approximately 82% of PVRs coal royalties revenues in the three months ended March 31, 2009 were derived from coal mined on its properties under leases containing royalty rates based on the higher of a fixed base price or a percentage of the gross sales price. The balance of PVRs coal royalties revenues for the respective periods was derived from coal mined on PVRs properties under leases containing fixed royalty rates that escalate annually.
Because we and PVR operate with independent capital structures, an important indicator of liquidity is the availability of borrowing capacity. As discussed in more detail in Long-Term Debt below, as of March 31, 2009, PVR had availability of $203.3 million on its recently expanded $800.0 million revolving credit facility, or the PVR Revolver.
Stocks Discussed: PVG,