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Penn Virginia Corporation Announces Fourth Quarter And Full-Year 2012 Results; Provides Initial 2013 Guidance

Capital Resources and Liquidity, Interest Expense and Impact of Derivatives

As of December 31, 2012, we had total debt with a carrying value of $595 million ($600 million aggregate principal amount), consisting of $295 million of 10.375 percent senior unsecured notes due 2016 and $300 million principal amount of 7.25 percent senior unsecured notes due 2019.

As of December 31, 2012, we had no borrowings under our revolving credit facility (the “Revolver”), with approximately $298 million of unused borrowing capacity under the Revolver commitment. Together with cash and cash equivalents of approximately $18 million, our financial liquidity was approximately $316 million. Our indebtedness at December 31, 2012, net of cash and cash equivalents, was approximately $577 million, representing 39 percent of book capitalization and 2.3 times 2012 Adjusted EBITDAX of $247.6 million. We have no debt maturities until 2016. As of February 15, 2013, we had approximately $270 million of available borrowing capacity under the Revolver and approximately $4 million of cash and cash equivalents, for available financial liquidity of approximately $274 million.

In October 2012, we completed concurrent public offerings of 9,200,000 shares of our common stock and 1,150,000 depositary shares, each representing a 1/100 th interest in a share of our 6 percent Series A convertible perpetual preferred stock. The two offerings provided approximately $154 million of net proceeds after issuance costs.

Interest expense decreased to $14.5 million in the fourth quarter of 2012 from $15.0 million in the third quarter due to lower average levels of debt outstanding.

During the fourth quarter of 2012, derivatives income was $4.9 million, compared to a derivatives loss of $12.3 million in the third quarter. Fourth quarter 2012 cash settlements of derivatives resulted in net cash receipts of $5.5 million, compared to $9.2 million of net cash receipts in the third quarter.

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, we have hedged approximately 4,600 barrels of daily crude oil production in 2013, or approximately 58 percent of the midpoint of 2013 crude oil production guidance, at a weighted average floor/swap price of $97.35 per barrel. We have also hedged approximately 20,000 Mcf of daily natural gas production in 2013, or approximately 55 percent of the midpoint of 2013 natural gas production guidance, at a weighted average floor/swap price of $3.76 per Mcf.

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