Penn Virginia Corporation (PVAC) Provides Operational Update
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- Exceeds Guidance for the First Quarter of 2021 and Increases Production Guidance for 2021 ------ First Quarter 2021 Earnings Conference Call Scheduled for May 4 ---
Penn Virginia Corporation ("Penn Virginia" or the "Company") (NASDAQ: PVAC) today announced an operational update and timing of its first quarter 2021 earnings release and conference call.
Operational and Financial Update
- Sold 16,324 barrels of oil per day ("BOPD") for the first quarter of 2021, exceeding the high end of the most recent guidance range. Total sales volumes for the first quarter of 2021 were 20,534 barrels of oil equivalent per day ("BOEPD"). Total production for the seven days ending March 31, 2021 averaged over 20,000 BOPD and 25,000 BOEPD;
- Estimated capital expenditures for the first quarter of 2021 of approximately $54 million, which was below the low end of the most recent guidance range;
- Realized oil price for the first quarter of 2021 of $44.80 per barrel, including effects of derivatives, net(1);
- Generated Free Cash Flow(2) for the sixth consecutive quarter, which lowered Long-term debt to $376 million and Net Debt(3) to $364 million as of March 31, 2021; and
- The Company recently obtained an updated reserve report from DeGolyer and MacNaughton ("D&M") as of April 1, 2021.
Darrin Henke, President and Chief Executive Officer of Penn Virginia, commented, "Our strong sales volumes for the quarter were largely due to the outperformance of wells brought online during the period, which used our improved completion designs along with an adjusted approach to drilling and flowback. Volumes for the quarter were also less impacted from the February winter storm than we previously anticipated, largely due to the outstanding efforts of the Penn Virginia operational team. In addition to maintaining our existing production and bringing on some impressive wells, we have continued to focus on additional operational and cost efficiencies, which translated into lower than expected capital expenditures for the quarter. Importantly, our production growth was not achieved by increasing our capital expenditures. Rather, it is due to the improvement of our execution on our existing assets, which required less capital than we anticipated. Given this strong outperformance in the first quarter, and expectations of future positive well performance using our improved techniques, we have increased our production guidance for the full year 2021. We continue to believe our premium asset base combined with our commitment to free cash flow, capital discipline, and maximizing cash-on-cash returns will create long-term value for all stakeholders."
First Quarter 2021 Conference Call
Penn Virginia plans to release its first quarter 2021 results after the market closes on Tuesday, May 4, 2021. A conference call and webcast discussing the first quarter 2021 financial and operational results is currently scheduled for Tuesday, May 4, 2021 at 5:00 p.m. ET. Prepared remarks will be followed by a question and answer period. Investors and analysts may participate via phone by dialing (844) 707-6931 (international: (412) 317-9248) five to 10 minutes before the scheduled start time, or via webcast by logging on to the Company's website, www.pennvirginia.com, at least 15 minutes prior to the scheduled start time to download supporting materials and install any necessary audio software.
An on-demand replay of the webcast will be available on the Company's website beginning shortly after the webcast. The replay will also be available from May 4, 2021, through May 11, 2021, by dialing (877) 344-7529 (international (412) 317-0088) and entering the passcode 10153995.
Proved Reserves and Drilling Inventory
As a result of the contribution of certain assets from Rocky Creek Resources, as well as significant developments in the first quarter of 2021, Penn Virginia obtained an updated third-party reserve report from D&M.
Penn Virginia's total proved reserves as of April 1, 2021, were approximately 136.5 million barrels of oil equivalent ("MMBOE"). The proved reserves were calculated in accordance with Securities and Exchange Commission ("SEC") guidelines using the pricing of $39.99 per barrel for oil and $2.16 per million British Thermal Units (MMBtu) for natural gas.
The table below sets forth the Company's Standardized Measure and SEC PV-10 Value(4) (as defined below) of the Company’s total proved reserves and PDP reserves as of April 1,2021:
|Standardized measure of future discounted cash flows - total proved reserves||$705|
|Standardized measure of future discounted cash flows - proved developed producing reserves (“PDP”)||$527|
|Total proved reserves, utilizing the SEC price guidelines, discounted at 10% and before tax ("PV-10 Value")(4)||$713|
|PV-10 Value(4) of PDP reserves utilizing the SEC price guidelines||$533|
Using flat pricing of $55 per barrel for oil and $2.50 per MMbtu for natural gas as of April 1 2021, the PV-10 Value(4) of the Company's total proved reserves and PDP reserves were $1,660 million and $912 million, respectively.
D&M currently estimates the Company has approximately 500 identified future drilling locations, which represents approximately 12 years of development potential at the Company’s expected 2021 drilling pace. Using D&M type curves, Penn Virginia estimates that two-thirds of those drilling locations average more than a 55% well level rate of return at $55 per barrel WTI. Current production from wells turned online in 2020 and 2021 continues to materially outperform D&M type curves.
Balance Sheet and Liquidity
As of March 31, 2021, Penn Virginia had cash of $11.9 million and total debt of $375.8 million, including borrowings under its revolving credit facility of $228.9 million. Liquidity was $132.6 million as of March 31, 2021, including cash of $11.9 million and $120.7 million available under the Company's revolving credit facility.
Revised 2021 Outlook
The table below sets forth the Company's operational and financial guidance(5):
|2Q 2021||Revised 2021||Previous 2021|
|Oil Sales Volumes (BOPD)||19,300 – 20,100||18,300 – 20,100||17,200 – 19,000|
|Realized Price Differentials|
|Oil (WTI, per barrel)||$(2.50) - $(1.50)||$(2.50) - $(1.50)||$(2.50) - $(1.50)|
|Natural gas (Henry Hub, per MMBtu)||$(0.10) - $0.10||$(0.10) - $0.10||$(0.10) - $0.10|
|Direct Operating Expenses|
|Lease operating expenses (per BOE)||$4.70 - $4.90||$4.70 - $5.00||$4.75 - $5.05|
|GPT expenses (per BOE)||$2.55 - $2.75||$2.35 - $2.65||$2.35 - $2.65|
|Ad valorem and production taxes (percent of product revenue)||6.3% - 6.8%||6.3% - 6.8%||6.3% - 6.8%|
|Adjusted Cash G&A expenses (per BOE)(6)||$3.00 - $3.30||$2.85 - $3.15||$2.85 - $3.15|
|Capital Expenditures (millions)|
|Drilling & Completion||$56 - $64||$205 - $235||$205 - $235|
|Land, Facilities and other||$1||$5||$5|
Note: The Company's outlook is based on maintaining a 2-rig development program. However, Penn Virginia will closely monitor commodity prices and the service cost environment with the goal of ensuring the capital program generates robust returns. Full-year 2021 guidance for Adjusted Cash G&A expenses(6) does not include approximately $5 million of expenses related to the transaction with Juniper Capital Advisors, L.P. (“Juniper”) and its affiliates.
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