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Penn Virginia Corporation Announces Year-End 2012 Proved Reserves And Provides Operational Update

Stocks in this article: PVA

As shown in the table above, on a pro forma basis to exclude production from assets sold in 2010, 2011 and 2012, production in 2012 was 5.8 MMBOE, or 15,776 BOEPD, compared to 5.9 MMBOE, or 16,157 BOEPD in 2011, and 5.5 MMBOE, or 15,176 BOEPD, in 2010. The slight decrease from 2011 to 2012 was due to natural gas production declines associated with discontinued natural gas drilling, largely offset by increased crude oil production from the Eagle Ford Shale.

Proved Reserves

As set forth in the table below, proved reserves were 113.5 MMBOE at year-end 2012, as compared to 130.3 MMBOE at year-end 2011, pro forma to exclude 16.9 MMBOE of Appalachian reserves sold in July 2012 (reported proved reserves at year-2011 were 147.2 MMBOE). The 13 percent decrease in pro forma proved reserves was due to a 161 Bcf (26.9 MMBOE), or 28 percent, decrease in natural gas proved reserves, partially offset by a 10.0 MMBOE, or 28 percent, increase in oil and natural gas liquid (NGL) proved reserves. In the Eagle Ford Shale play, proved reserves increased by 16.1 MMBOE, or 161 percent, from 10.0 MMBOE at year-end 2011 to 26.1 MMBOE at year-end 2012.

 
Proved Reserves at December 31, 2011 (3)
  Oil, NGLs and  
Oil Equivalent Condensate Natural Gas
Reserves Reserves Reserves
    (MMBOE)   (MMBbls)   (Bcf)
Proved reserves at December 31, 2011 147.2 35.6 669.9
2012 production (6.5 ) (3.1 ) (20.3 )
2012 extensions, discoveries and other additions 18.3 16.0 13.4
2012 revisions (28.7 ) (2.9 ) (154.4 )
2012 purchases (sales) of reserves in place, net (16.9 )   0.0     (101.2 )
Proved reserves at December 31, 2012 113.5     45.5     407.5  
Percentage of equivalent reserves 100.0 % 40.1 % 59.9 %

Proved developed reserves at December 31, 2011

71.6 16.5 330.6

Percentage of proved reserves

48.6

%

46.3

%

49.3

%

Proved developed reserves at December 31, 2012

47.0 18.7 169.4

Percentage of proved reserves

41.4

%

41.1

%

41.6

%

Present value of future net cash flows before

income taxes ($mil.) (3)

$692.5

 
(3)   The estimated reserves and present value were based on pricing assumptions for Henry Hub natural gas of $2.76 per MMBtu and West Texas Intermediate crude oil of $94.71 per barrel. These compare to prices of $4.12 per MMBtu and $96.19 per barrel, respectively, at December 31, 2011. Both prices exclude the effects of hedged production. One barrel of oil or NGLs is assumed to be equivalent to six Mcf of natural gas. MMBbls equals millions of barrels of liquids.

Note - Numbers may not add due to rounding.

 

The PV-10 value of the proved reserves at year-end 2012 was approximately $692 million (see statement regarding non-GAAP measures below). This PV-10 value was based on a Henry Hub (HH) price of $2.76 per million British thermal units (MMBtu) for natural gas and a West Texas Intermediate (WTI) price of $94.71 per barrel for oil, each of which represents the unweighted arithmetic average of the first-day-of-the-month prices during the 12-month period ending on December 31, 2012.

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