Penn Virginia Announces Acquisition in Eagle Ford

HOUSTON – Penn Virginia Corporation announced that it has entered into a definitive agreement to acquire assets in the Eagle Ford Shale, primarily in Gonzales and Lavaca Counties, from Hunt Oil Company (“Hunt”) for $86 million in cash, subject to customary post-closing adjustments. The company anticipates the acquisition will close on or before March 1, 2018, with an effective date of October 1, 2017. The acquisition is expected to be funded with borrowings under the company’s credit facility. Transaction Highlights:

• Expands the company’s core net leasehold position by approximately 13 percent, or 9,700 net acres (substantially all acreage is held by production) in Area 1, of which 5,700 net acres are currently operated by Penn Virginia. The company’s operated net Eagle Ford acreage will increase from 93 percent to more than 99 percent as a result of the transaction;
• Includes production of approximately 1,870 barrels of oil equivalent per day (“BOEPD”), of which approximately 89 percent is oil and 75 de-risked net lower Eagle Ford locations;
• Adds PDP reserves of approximately 3.8 million barrels of oil equivalent (“MMBOE”), of which approximately 86 percent is oil; total resource potential is estimated at more than 29 MMBOE;
• Provides economies of scale which will increase the company’s cash operating margin since no additional G&A or drilling rigs are required to capture value; and
• Accretive to Penn Virginia under all measures, including earnings, cash flow and net asset value per share. Acquiring acreage at an estimated price of approximately $2,100 per net acre, including net production value of approximately $65.5 million ($35,000 per flowing BOEPD).