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

Stocks in this article: PVA

Set forth below are the initial results and statistics for certain Eagle Ford Shale wells drilled and completed to date.

                     
30-Day Average Gross
Peak Gross Daily Daily Production

Production Rates (4)

Rates (4)

Lateral Frac Cumulative   Days On Oil   Equivalent   Choke Oil   Equivalent
Well Name   Length   Stages Production   Production Rate   Rate   Size Rate   Rate
Feet BOE Days BOPD BOEPD Inches BOPD BOEPD
New Wells On-Line
Neuse #1H 4,650 19 43,080 125 633 667 13/64” 430 459
Henning #2H 3,153 13 54,094 98 920 1,002 14/64” 753 822

Smith #1H (5)

4,459 18 39,864 91 730 943 16/64” 487 629
Kusak #1H 4,453 18 39,532 70 656 779 18/64” 543 726

Leal #1H (5)

4,201 17 38,120 64 619 832 13/64” 514 725

Matias #1H (5)

4,453 20 27,502 49 899 1,013 12/64” 508 652
Miller #1H 4,502 23 17,736 46 871 931 35/64” 409 430

Freytag #1H (5)

4,952 25 20,928 33 1,071 1,195 14/64” 580 689

Kleihege #1H (5)

5,155 26 10,478 21 484 629 16/64” 400 515
Arledge Ranch #1H 4,150 21 13,666 18 1,015 1,117 16/64” --- ---

Raab #1H (5)

5,450 22 --- --- 808 1,046 17/64” --- ---

Barraza #1H (5)

3,952 16 --- --- 574 680 15/64” --- ---
R. Washington #1H 3,702 19 --- --- 744 805 15/64” --- ---
 
Averages (13 newest wells) 4,402 20 27,845 56 771 895 16/64” 514 627
Averages (6 newest Gonzales wells) 4,102 19 33,622 71 807 884 19/64” 534 609
Averages (7 newest Lavaca wells) 4,660 21 23,031 44 741 905 15/64” 498 642
 

Averages (59 wells) (6)

4,006 17 84,057 337 882 972 16/64” 579 651

Averages (47 Gonzales wells) (6)

3,856 16 93,309 393 906 984 17/64” 589 649

Averages (12 Lavaca wells) (6)

4,594 20 47,822 120 789 926 14/64” 540 660
 
Other Wells

Targac #1H (5,7)

Technik #1H (5,7)

Fojtik #1H (5,7)

Cannonade Ranch #50H (8)

 
(4)   Wellhead rates only; the natural gas associated with these wells is yielding approximately 145 barrels of NGLs per million cubic feet. BOPD is defined as barrels of oil per day.
(5) Wells located in Lavaca County; all other wells are located in Gonzales County.
(6) Seven wells (six in Gonzales County and one in Lavaca County) had operational issues and/or shorter laterals and fewer frac stages. As a result, production data for these seven wells have been excluded.
(7) The Targac #1H well is waiting on completion. The Technik #1H and Fojtik #1H are currently being drilled.
(8) The Cannonade Ranch #50H well is a horizontal exploratory well targeting the Pearsall Shale and is currently being drilled.
 

Derivatives Update

To support our operating cash flows, we hedge a portion of our oil and natural gas production at pre-determined prices or price ranges. Based on hedges currently in place, as detailed in the table below, we have hedged approximately 4,500 barrels of daily crude oil production at a weighted average floor/swap price of $97.29 per barrel and 20 million cubic feet of daily natural gas production in 2013 at a weighted average floor/swap price of $3.76 per Mcf. The following table summarizes our open hedge positions through swaps and collars as of January 28, 2013.

     
Weighted Average

Average Volume Per Day

Price per MMBtu or Barrel

Instrument Type

Floor / Swap

 

Ceiling

(MMBtu)
Natural Gas
First quarter 2013 Collars 10,000 $ 3.50 $ 4.30
Second quarter 2013 Collars 10,000 $ 3.50 $ 4.30
Third quarter 2013 Collars 10,000 $ 3.50 $ 4.30
Fourth quarter 2013 Collars 15,000 $ 3.67 $ 4.37
First quarter 2014 Collars 5,000 $ 4.00 $ 4.50
First quarter 2013 Swaps 10,000 $ 4.01
Second quarter 2013 Swaps 10,000 $ 4.01
Third quarter 2013 Swaps 10,000 $ 4.01
Fourth quarter 2013 Swaps 5,000 $ 4.04
 
(Barrels)
Crude Oil
First quarter 2013 Collars 1,590 $ 90.00 $ 99.35
Second quarter 2013 Collars 1,900 $ 90.00 $ 99.17
Third quarter 2013 Collars 1,900 $ 90.00 $ 99.17
Fourth quarter 2013 Collars 1,900 $ 90.00 $ 99.17
First quarter 2013 Swaps 2,250 $ 103.51
Second quarter 2013 Swaps 2,250 $ 103.51
Third quarter 2013 Swaps 1,500 $ 102.77
Fourth quarter 2013 Swaps 1,500 $ 102.77
First quarter 2014 Swaps 2,000 $ 100.44
Second quarter 2014 Swaps 2,000 $ 100.44
Third quarter 2014 Swaps 1,500 $ 100.20
Fourth quarter 2014 Swaps 1,500 $ 100.20
First quarter 2013 Swaptions 812 $ 100.00
Second quarter 2013 Swaptions 812 $ 100.00
Third quarter 2013 Swaptions 812 $ 100.00
Fourth quarter 2013 Swaptions 812 $ 100.00
 

Non-GAAP Measure

PV-10 value is the estimated future net cash flows from estimated proved reserves discounted at an annual rate of ten percent before giving effect to income taxes. The standardized measure is the after-tax estimated future cash flows from estimated proved reserves discounted at an annual rate of 10 percent, determined in accordance with generally accepted accounting principles (GAAP). We use PV-10 value as one measure of the value of our estimated proved reserves and to compare relative values of proved reserves among exploration and production companies without regard to income taxes. We believe that securities analysts and rating agencies use PV-10 value in similar ways. Our management believes PV-10 value is a useful measure for comparison of proved reserve values among companies because, unlike standardized measure, it excludes future income taxes that often depend principally on the characteristics of the owner of the reserves rather than on the nature, location and quality of the reserves themselves. We cannot reconcile PV-10 value to the standardized measure at this time because final income tax information for 2012 is not yet available. The standardized measure will be provided in our forthcoming Form 10-K for the year ended December, 31 2012 to be filed with the SEC.

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