Penn Virginia Corp. Reports Operating Results (10-Q)
Penn Virginia Corporation is engaged in the exploration development and production of oil and natural gas and the collection of royalties and overriding royalty interests on various oil and gas properties as well as the leasing of coal mineral rights and the collection of relatedroyalties. Penn Virginia explores for develops and produces crude oilcondensate and natural gas. Penn Virginia Corp. has a market cap of $953 million; its shares were traded at around $22.76 with a P/E ratio of 10.6 and P/S ratio of 0.8. The dividend yield of Penn Virginia Corp. stocks is 1%. Penn Virginia Corp. had an annual average earning growth of 32.3% over the past 10 years. GuruFocus rated Penn Virginia Corp. the business predictability rank of 4-star. Highlight of Business Operations: We have a geographically diverse asset base with core areas of operation in the East Texas, Mid-Continent, Appalachian and Mississippi regions of the United States. As of December 31, 2008, we had proved natural gas and oil reserves of approximately 916 Bcfe, of which 82% were natural gas and 51% were proved developed. In the three months ended March 31, 2009, we produced 13.7 Bcfe, a 30% increase compared to 10.5 Bcfe in the same period of 2008. However, our average realized price received for natural gas decreased 46%, from $8.26 per Mcf in the three months ended March 31, 2008 to $4.48 per Mcf in the three months ended March 31, 2009, while the average realized price received for our crude oil decreased 62%, from $97.00 per Bbl to $37.01 per Bbl and the average realized price received for our natural gas liquids, or NGLs, decreased 58%, from $54.94 per Bbl to $22.93 per Bbl in the same periods.
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 our coal royalties revenues for the respective periods was derived from coal mined on PVRs properties under leases containing fixed royalty rates that escalate annually.
Read the The complete ReportPVA is in the portfolios of John Keeley of Keeley Fund Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc.