Penn Virginia Corporation Announces Record 2006 Results and 2007 Guidance.Reports Record Annual Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , Net Income and Cash Flow RADNOR, Pa. -- Penn Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). Corporation (NYSE NYSE See: New York Stock Exchange :PVA PVA polyvinyl alcohol. ) today reported record operating income of $170.5 million and net income of $75.9 million, or $4.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, in 2006 compared with operating income of $162.0 million and net income of $62.1 million, or $3.31 per diluted share, reported in 2005. Net cash provided by operating activities was a record $275.8 million for 2006, a 19 percent increase over the $231.4 million reported for 2005. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , a non-GAAP measure, was also a record $262.0 million for 2006, and 11 percent above the $236.2 million reported for 2005. The increases in operating income and cash flows were primarily due to 14 percent higher oil and gas production volumes, higher production, prices and royalties in the coal segment and an increase in plant inlet inlet /in·let/ (-let) a means or route of entrance. pelvic inlet the upper limit of the pelvic cavity. thoracic inlet the elliptical opening at the summit of the thorax. volumes and stronger margins in the natural gas midstream mid·stream n. 1. The middle part of a stream. 2. The part of a course that is neither at the beginning nor at the end: the midstream of life. Noun 1. segment. The increase in operating income and cash flows was partially offset by lower realized natural gas prices and by higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. due to the increased production levels. Reported net income further benefited from a gain on derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. in 2006 as compared to a loss in 2005, offset in part by increased interest expense and higher general and administrative expenses. A reconciliation of operating cash flow and other non-GAAP financial measures appears in the financial tables later in this release. For the fourth quarter of 2006, operating income was $27.3 million and net income was $10.7 million, or $0.57 per diluted share, compared with fourth quarter 2005 operating income of $61.1 million and net income of $27.4 million, or $1.46 per diluted share. Net cash provided by operating activities was $78.8 million, a five percent decrease from the $82.9 million reported for the fourth quarter of 2005. Operating cash flow, a non-GAAP measure, was $64.0 million, an 11 percent decrease from the $72.3 million reported for the fourth quarter of 2005. The decreases in fourth quarter 2006 operating income and net income were due primarily to lower realized natural gas prices and higher operating expenses. Fourth quarter 2006 net income benefited from derivatives gains and increased other income, partially offset by increased interest expense. Management Comment A. James Dearlove, Penn Virginia President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "We are pleased with the record financial and operating results in 2006 which reflect the success of our growth strategy in all of our businesses, and look forward to 2007 with confidence that we will continue to grow. "Our increased operating income and cash flow were the direct result of strong performance in our coal and midstream businesses, and our oil and gas operations grew production by 14 percent to record levels during 2006. While natural gas prices decline from 2005's weather and storage-induced record levels, oil and natural gas prices remain at attractive levels which we believe are sufficient to generate rates of return superior to our cost of capital, and we have an active hedging program to help supplement our cash flows should prices weaken during 2007. "We previously announced an ambitious $334 million oil and gas capital expenditures budget for 2007, with 84 percent of the budget targeting development and production projects. We intend to continue to exploit our expertise in unconventional plays in our core development and production areas, including the Cotton Valley play in east Texas, the Selma Chalk in Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and horizontal coalbed methane Coalbed methane is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, and other countries. (HCBM) in both the Appalachian Basin and the Mid-Continent region. Our exploration spending will be spread among projects in south Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and other
opportunities involving shale shale, sedimentary rock formed by the consolidation of mud or clay, having the property of splitting into thin layers parallel to its bedding planes. Shale tends to be fissile, i.e., it tends to split along planar surfaces between the layers of stratified rock. , CBM CBM Commodore Business MachinesCBM Coalbed Methane CBM Christoffel Blindenmission CBM Condition Based Maintenance CBM Confidence-Building Measures CBM Curriculum Based Measurement (education) CBM Cubic Meter and tight sands. A primary goal of our exploration program is to identify meaningful resource plays to supplement our core development and production areas. "In December 2006, we sold approximately 18 percent of Penn Virginia GP Holdings, L.P. (NYSE: PVG PVG Shanghai Pudong International Airport PVG Packet Voice Gateway PVG Piano, Vocal, and Guitar (musical score) PVG Perspective View Generator PVG Pole Vault Girl (Allison Stokke) PVG Product Validation Group ), the owner of PVR's general partner, to investors in its initial public offering (IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ). PVG reinvested the proceeds of the IPO into PVR See DVR. , thereby increasing its ownership stake in PVR while at the same time allowing PVR to de-leverage its balance sheet. By having PVG traded in the public market, we believe the value to PVA of the general partner, inclusive of inclusive of prep. Taking into consideration or account; including. the incentive distribution rights (IDRs) and ownership of limited partner units, is now more easily recognized by the investment community. "During 2006, the Company benefited not only from the strong financial and operating results of the coal and midstream businesses in its consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge , but also benefited from the $28.3 million in cash distributions from PVR, a 33 percent increase over the $21.2 million received in 2005. During 2006, we realized an increased benefit from the IDRs we owned as the general partner of PVR, which are now owned by PVG. The IDRs provide increasing cash flows to the Company as distributions to PVR unitholders increase. "As we head into 2007, we look forward to solid growth from all three of our business segments, both organic and from acquisitions, and believe we have strategies in place at each business segment and the financial strength to achieve that growth." Oil and Gas Segment Review Proved natural gas and oil reserves Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints. Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally increased by 29 percent in 2006, from 377 billion cubic feet of natural gas equivalent (Bcfe) at December 31, 2005 to 487 Bcfe at December 31, 2006. This increase was primarily due to increases from the Cotton Valley play in east Texas and Selma Chalk play in Mississippi, as well as a contribution from the Mid-Continent region, which was established following the Mid-Continent acquisition in June 2006. Oil and gas production grew 14 percent from 27.4 Bcfe in 2005 to a record 31.3 Bcfe in 2006. Fourth quarter 2006 oil and gas production also grew 19 percent to 8.6 Bcfe from 7.2 Bcfe in the fourth quarter of 2005, which also was the fifth straight quarterly record for oil and gas production by the Company. See the Company's February 7, 2007 news release for a more detailed discussion of fourth quarter 2006 drilling and production operations and proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. for the oil and gas business segment. Oil and gas operating income for 2006 was $84.8 million compared to $95.5 million reported for 2005. Total oil and gas revenues increased by three percent from $226.2 million in 2005 to $234.2 million in 2006. The increased production volumes and higher realized prices for oil and condensate condensate, matter in the form of a gas of atoms, molecules, or elementary particles that have been so chilled that their motion is virtually halted and as a consequence they lose their separate identities and merge into a single entity. were partially offset by a lower average realized sales price for natural gas. The average realized sales price in 2006 was $7.35 per thousand cubic feet (Mcf), a decrease of 12 percent from the $8.31 per Mcf realized in 2005. A 13 percent increase in natural gas production, from 25.6 billion cubic feet (Bcf) in 2005 to 29.0 Bcf in 2006, essentially offset the natural gas price decrease and resulted in flat natural gas revenues from 2005 to 2006. Natural gas production represented approximately 93 percent of the Company's equivalent production for the year. Total oil and gas segment expenses increased 15 percent to $151.1 million, or $4.83 per thousand cubic feet of natural gas equivalent (Mcfe) produced, in 2006, from $131.3 million, or $4.80 per Mcfe produced, in 2005, primarily due to the following: * Operating expenses increased to $27.4 million, or $0.88 per Mcfe produced, in 2006 from $17.3 million, or $0.63 per Mcfe produced, in 2005. The increase was primarily due to the 14 percent production increase, including the acquisition of producing properties in the Mid-Continent region, additional compressor compressor, machine that decreases the volume of air or other gas by the application of pressure. Compressor types range from the simple hand pump and the piston-equipped compressor used to inflate tires to machines that use a rotating, bladed element to achieve rentals at fields with this increased production, downhole maintenance charges associated with HCBM wells in Appalachia and Selma Chalk wells in Mississippi, increased surface repair costs and increased gathering fees related to HCBM and Cotton Valley wells. * Taxes other than income decreased to $11.8 million, or $0.38 per Mcfe produced, in 2006 from $13.2 million, or $0.48 per Mcfe produced, in 2005. The decrease was primarily due to a severance tax severance tax n. A tax imposed by a state on the extraction of natural resources, such as oil, coal, or gas, that will be used in other states. refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies related to production in the Cotton Valley play and property tax adjustments in West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. . * Exploration expense decreased to $34.3 million in 2006 from $40.9 million in 2005. The decrease was primarily due to unproved leasehold An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use land for a period of time. leasehold n. and dry hole costs related to an exploratory well in south Texas that was determined to be unsuccessful in the second quarter of 2005, partially offset in 2006 by increases in dry hole costs due to the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of exploratory wells and in unproved leasehold amortization. * Impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges increased to $8.5 million in 2006 from $4.8 million in 2005 related to changes in estimates of reserves of certain fields in Louisiana, Texas and West Virginia in 2006 and changes in estimates of reserves of certain fields in Texas in 2005. * Depreciation, depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able and amortization (DD&A) expense increased to $56.2 million, or $1.80 per Mcfe produced, in 2006 from $45.9 million, or $1.68 per Mcfe produced, in 2005. The increase was the result of the 14 percent production increase and higher average depletion rates. Oil and gas operating income for the fourth quarter of 2006 was $8.7 million, compared to $43.9 million reported for the fourth quarter of 2005. Total oil and gas revenues decreased by 27 percent from $79.1 million in the fourth quarter of 2005 to $57.4 million in the fourth quarter of 2006. A lower average realized sales price for natural gas of $6.60 per Mcf in the fourth quarter of 2006, a decrease of 41 percent from the $11.22 per Mcf in the prior year, more than offset record natural gas production volumes of 8.0 Bcf, an increase of 19 percent over the fourth quarter of 2005. Total oil and gas segment expenses increased 39 percent to $49.0 million, or $5.73 per Mcfe produced, in the fourth quarter of 2006 from $35.2 million, or $4.91 per Mcfe produced, in the fourth quarter of 2005, primarily due to the following: * Operating expenses increased to $7.9 million, or $0.93 per Mcfe produced, in the fourth quarter of 2006 from $5.7 million, or $0.79 per Mcfe produced, in the fourth quarter of 2005. The increase was primarily due to the 20 percent production increase, including the acquisition of producing properties in the Mid-Continent region, additional compressor rentals at fields with this increased production, downhole maintenance charges associated with HCBM wells in Appalachia and Selma Chalk wells in Mississippi, increased surface repair costs and increased gathering fees related to HCBM and Cotton Valley wells. * Taxes other than income decreased to $2.6 million, or $0.31 per Mcfe produced, in the fourth quarter of 2006 from $3.7 million, or $0.52 per Mcfe produced, in the prior year. The decrease resulted from lower severance taxes primarily due to the lower average realized sales price for natural gas in the fourth quarter of 2006 as compared to the previous year. * Impairment charges increased to $8.5 million, or $1.00 per Mcfe produced, in the fourth quarter of 2006 from $1.3 million in the prior year related to changes in estimates of reserves of certain fields in Louisiana, Texas and West Virginia in 2006 and changes in estimates of reserves of certain fields in Texas in 2005. * DD&A expense increased to $17.5 million, or $2.04 per Mcfe produced, in the fourth quarter of 2006 from $12.1 million, or $1.69 per Mcfe produced, in the fourth quarter of 2005. The increase was the result of the 20 percent production increase and higher average depletion rates. Coal Segment Review (Penn Virginia Resource Partners, L.P. - NYSE:PVR) As of December 31, 2006, PVR owned or controlled approximately 765 million tons of proven and probable coal reserves located in Central Appalachia, Northern Appalachia, the San Juan Basin The San Juan Basin is a drainage basin and geologic structural basin in the Four Corners region of the Southwestern United States; its main portion covers around 4,600 square miles, encompassing much of northwestern New Mexico, northeastern Arizona, and parts of Colorado and Utah. and the Illinois Basin. Coal production by PVR's lessees increased nine percent to 32.8 million tons in 2006 from 30.2 million tons in 2005, primarily due to acquisitions by PVR, with 1.2 million tons of the increase attributable to Central Appalachia and 1.1 million tons of the increase attributable to the Illinois Basin. Full-year 2006 operating income in PVR's coal segment was a record $73.4 million, or 19 percent higher than the $61.7 million reported in 2005. Revenues increased to $113.0 million in 2006 from $95.8 million in 2005, mainly as the result of acquisitions, increased coal production by PVR's lessees and higher coal prices. Coal royalty revenues increased to $98.2 million in 2006, a 19 percent increase from the $82.7 million in 2005, due to higher coal production by PVR's lessees and an increase in average coal royalties due to higher coal prices. The average coal royalty increased by nine percent from $2.74 per ton in 2005 to $2.99 per ton in 2006, primarily as the result of a greater percentage of coal being produced under certain price-sensitive leases and stronger market conditions for coal resulting in higher prices. Coal services revenues increased by 13 percent to $5.9 million in 2006 from $5.2 million in 2005. Other revenues increased to $9.0 million in 2006 from $7.8 million in 2005 due to increased revenues for the management of certain coal properties which began in July 2005 and due to increases in forfeiture The involuntary relinquishment of money or property without compensation as a consequence of a breach or nonperformance of some legal obligation or the commission of a crime. The loss of a corporate charter or franchise as a result of illegality, malfeasance, or Nonfeasance. income, railcar rental income Noun 1. rental income - income received from rental properties income - the financial gain (earned or unearned) accruing over a given period of time and wheelage fees, partially offset by a decrease in royalty income from oil and natural gas and $1.5 million received in a legal settlement in 2005. Expenses increased from $34.0 million in 2005 to $39.5 million in 2006, primarily due to a $2.5 million increase in depreciation, depletion and amortization expense and smaller increases in operating and general and administrative expenses, as a result of acquisitions and increased lessee One who rents real property or Personal Property from another. A lessee of land is a tenant. Cross-references Landlord and Tenant. lessee n. the person renting property under a written lease from the owner (lessor). production. Coal production by PVR's lessees increased eight percent to 8.3 million tons in the fourth quarter of 2006 from 7.7 million tons in the prior year, primarily due to acquisitions, with 0.3 million tons of the increase attributable to Central Appalachia and 0.3 million tons of the increase attributable to Northern Appalachia. Fourth quarter 2006 operating income in PVR's coal segment was $18.3 million, or 11 percent higher than the $16.5 million reported for the prior year. Revenues increased to $29.9 million in the fourth quarter of 2006 from $26.3 million in the prior year, mainly as the result of acquisitions, increased coal production by PVR's lessees and higher coal prices. Coal royalty revenues increased to $24.9 million in the fourth quarter of 2006, a 14 percent increase from the $21.8 million in the prior year due to higher coal production by PVR's lessees and an increase in average coal royalties due to higher coal prices. In addition, the average coal royalty increased by six percent from $2.82 per ton in the fourth quarter of 2005 to $2.99 per ton in the fourth quarter of 2006, primarily as the result of a greater percentage of coal being produced under certain price-sensitive leases and stronger market conditions for coal resulting in higher prices. Expenses increased from $9.8 million in the fourth quarter of 2005 to $11.6 million in 2006, primarily due to a $1.4 million increase in operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. and a $0.9 million increase in depreciation, depletion and amortization expense, partially offset by a $0.5 million decrease in general and administrative expense. Natural Gas Midstream Segment Review (Penn Virginia Resource Partners, L.P. - NYSE: PVR) Inlet volumes at PVR's gas processing plants and gathering systems increased 44 percent to 56.0 Bcf, or approximately 163 million cubic feet (MMcf) per day, for the year ended December 31, 2006, from the 38.9 Bcf, or approximately 127 MMcf per day, for ten months reported for the prior year. The increase was primarily due to a full year of results in 2006 as compared to the ten-month period in 2005, and to higher average daily inlet volumes resulting from the pipeline acquisition completed in the second quarter of 2006 and successful drilling results of local producers. Full-year 2006 operating income in PVR's natural gas midstream segment was $29.4 million, or 80 percent higher than the $16.3 million for the ten month results reported in 2005. The gross midstream processing margin, represented by natural gas midstream revenues less cost of cash purchased, increased 52 percent to $68.1 million, or $1.22 per thousand cubic feet of natural gas (Mcf), in 2006 from $44.7 million, or $1.15 per Mcf, for the ten months ended December 31, 2005, mainly as a result of a full year of results in 2006 as compared to ten months of results in 2005, increased average daily inlet volumes and an improved spread between natural gas liquids (NGLs) and natural gas prices. Expenses, other than cost of gas purchased, increased from $30.3 million in the ten months of 2005 to $40.9 million in 2006, primarily due to a full year of results in 2006 as compared to ten months of results in 2005 and increased inlet volumes. Inlet volumes at PVR's gas processing plants and gathering systems increased 39 percent to 16.6 Bcf, or approximately 180 MMcf per day, for the fourth quarter of 2006, from the 11.9 Bcf, or approximately 129 MMcf per day, in the prior year. The increase was primarily due to higher average daily inlet volumes resulting from the pipeline acquisition completed in the second quarter of 2006 and successful drilling results of local producers. Fourth quarter 2006 operating income in PVR's natural gas midstream segment was $7.1 million, or 65 percent higher than the $4.3 million in the prior year. The gross midstream processing margin increased to $17.4 million, or $1.05 per Mcf, in the fourth quarter of 2006, from $13.7 million, or $1.15 per Mcf, in the prior year period, mainly as a result of increased inlet volumes, partially offset by declining gross midstream processing margins per Mcf. The gross midstream processing margin per Mcf declined by $0.10 per Mcf, or nine percent, in the fourth quarter of 2006 as compared to the prior year, primarily due to lower prices in the crude oil markets at the end of 2006. Expenses, other than cost of gas purchased, increased from $9.9 million in the fourth quarter of 2005 to $10.8 million in 2006, primarily due to increased inlet volumes. Partnership Distributions and Consolidated Financial Statements As previously announced, PVG today paid to unitholders of record as of February 5, 2007 a quarterly cash distribution, covering the period December 5 through December 31, 2006, in the amount of $0.07 per unit, or an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of $0.96 per unit. This distribution represents a $0.02 per unit increase over the $0.94 per unit annualized distribution contemplated in connection with PVG's initial public offering. PVG, whose common units began trading on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. on December 5, 2006, owns PVR's general partner, including the incentive distribution rights, and is PVR's largest unitholder and reports its financial results on a consolidated basis with the financial results of PVR. PVG currently has no separate operating activities apart from those conducted by PVR, and its cash flow is derived solely from cash distributions received from PVR. Similarly, PVA is the largest unitholder of PVG and reports its financial results on a consolidated basis with the financial results of PVG. Capital Resources and Impact of Derivatives As of December 31, 2006, the Company had borrowed $221 million under its revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility compared to $79 million at the end of 2005. The increases in borrowings were used to fund the $72 million acquisition of Mid-Continent reserves in June 2006 and to execute the Company's expanded capital expenditures program. In November 2006, the Company amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. its credit facility to increase the commitment from $200 million to $300 million and to increase the borrowing base from $300 million to $400 million. PVR's outstanding borrowings as of December 31, 2006 were $218.0 million, including $10.8 million of senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. notes classified as current portion of long-term debt Current Portion Of Long-Term Debt A portion of the balance sheet that represents the total amount of long-term debt that must be paid within the next year. The balance sheet has a liability section, which is broken down into long-term and current debt. , a decrease from $255.0 million as of December 31, 2005. The decrease in outstanding borrowings was primarily due to $114.6 million of debt repayment using proceeds received from the sale of additional limited partner units to PVG following its initial public offering in December 2006, partially offset by borrowings during the year to fund acquisitions. Due to the higher weighted average of outstanding borrowings during 2006 as compared to 2005 and an increase in the underlying base interest rate, consolidated interest expense increased from $15.3 million in 2005 to $24.8 million in 2006 and from $4.2 million in the fourth quarter of 2005 to $7.5 million for the fourth quarter of 2006. During the full-year and the fourth quarter of 2006, gains (losses) on derivatives changed from a loss of $14.9 million in 2005 to a gain of $19.5 million in 2006 and from a loss of $3.7 million in the fourth quarter of 2005 to a gain of $8.1 million in the fourth quarter of 2006. Oil and gas hedges provided significant non-cash unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on derivatives in the fourth quarter and full-year 2006, as compared to the prior year period, and natural gas midstream hedges provided reduced non-cash unrealized losses Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on derivatives in the fourth quarter and full-year 2006, as compared to the prior year. See the Guidance Table included in this release for detail of our derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. positions as of December 31, 2006. Guidance for 2007 See the Guidance Table included in this release for guidance estimates for 2007. These estimates, including capital expenditure plans, are meant to provide guidance only and are subject to revision as PVA's operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. changes. 2006 Fourth Quarter and Full Year Operational Update and Financial Results Conference Call The Company will release its consolidated 2006 fourth quarter and full year results, including the results of Penn Virginia Resource Partners, L.P. (NYSE: PVR) and Penn Virginia GP Holdings, L.P. (NYSE: PVG), after the close of trading on the NYSE on Wednesday, February 14, 2007, followed by a conference call on Thursday, February 15, 2007 at 3:00 p.m. ET. A joint conference call for PVR and PVG will be at 1:00 p.m. ET. Prepared remarks by A. James Dearlove, President and Chief Executive Officer, will be followed by a question and answer period. Investors and analysts may participate via phone by dialing 1-877-407-9205 five to ten minutes before the scheduled start of the conference call, or via webcast by logging on to the Company's website at www.pennvirginia.com at least 20 minutes prior to the scheduled start of the call to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. A telephone replay of the call will be available until March 1 at 11:59 p.m. ET by dialing 1- 877-660-6853 and using replay passcodes: conference ID #228281, password #286. An on-demand replay of the conference call will be available at the Company's website for 14 days beginning shortly after the call. Headquartered in Radnor, PA and a member of the S&P SmallCap 600 Index, Penn Virginia Corporation (NYSE: PVA) is an independent natural gas and oil company focused on the exploration, acquisition, development and production of natural gas reserves. PVA also owns approximately 82 percent of Penn Virginia GP Holdings, L.P. (NYSE: PVG), the owner of the general partner and the largest unitholder of Penn Virginia Resource Partners, L.P. (NYSE: PVR), a manager of coal properties and related assets and the operator of a midstream natural gas gathering and processing business. For more information about PVA, please visit the Company's website at www.pennvirginia.com. Certain statements contained herein that are not descriptions of historical facts are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because such statements include risks, uncertainties and contingencies Contingencies (ISSN 1048-9851) is the bimonthly magazine of the American Academy of Actuaries, providing a large and diverse readership with general interest and technical articles on a wide range of issues related to the actuarial profession. , actual results may differ materially from those expressed or implied by such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . These risks, uncertainties and contingencies include, but are not limited to, the following: the cost of finding and successfully developing oil and gas reserves; PVA's ability to acquire new oil and gas reserves and the price for which such reserves can be acquired; energy prices generally and specifically, the price of crude oil, natural gas, NGLs and coal; the relationship between natural gas and NGL NGL - A dialect of IGL. prices; the price of coal and its comparison to the price of natural gas and oil; the volatility of commodity prices for crude oil, natural gas, NGLs and coal; the projected demand for crude oil, natural gas, NGLs and coal; the projected supply of crude oil, natural gas, NGLs and coal; PVA's ability to obtain adequate pipeline transportation capacity for its oil and gas production; non-performance by third party operators in wells in which PVA owns an interest; competition among producers in the oil and natural gas and coal industries generally and among natural gas midstream companies; the extent to which the amount and quality of actual production of PVA's oil and natural gas or PVR's coal differs from estimated recoverable proved oil and gas reserves and coal reserves; PVR's ability to generate sufficient cash from its midstream and coal businesses to pay the minimum quarterly distribution to its general partner and its unitholders; hazards or operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. incidental Contingent upon or pertaining to something that is more important; that which is necessary, appertaining to, or depending upon another known as the principal. Under Workers' Compensation statutes, a risk is deemed incidental to employment when it is related to whatever a to PVA's business and to PVR's coal or midstream business; PVR's ability to successfully manage its relatively new natural gas midstream business; PVR's ability to acquire new coal reserves or midstream assets on satisfactory terms and to integrate effectively these new operations; the price for which coal reserves can be acquired; PVR's ability to continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. find and contract for new sources of natural gas supply for its midstream business; PVR's ability to retain existing or acquire new midstream customers; PVR's ability to lease new and existing coal reserves; the ability of PVR's lessees to produce sufficient quantities of coal on an economic basis from PVR's reserves; the ability of PVR's lessees to obtain favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. contracts for coal produced from its reserves; PVR's exposure to the credit risk of its coal lessees and midstream customers; hazards or operating risks incidental to midstream operations; unanticipated geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. problems; the dependence of PVR's midstream business on having connections to third party pipelines; the availability of required drilling rigs, materials and equipment; the occurrence of unusual weather or operating conditions including force majeure [French, A superior or irresistible power.] An event that is a result of the elements of nature, as opposed to one caused by human behavior. The term force majeure events; the failure of equipment or processes to operate in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with specifications or expectations; the failure of PVR's infrastructure and its lessees' mining equipment or processes to operate in accordance with specifications or expectations; delays in anticipated start-up dates of PVA's oil and natural gas production and PVR's lessees' mining operations and related coal infrastructure projects; environmental risks affecting the drilling and producing of oil and gas wells, the mining of coal reserves or the production, gathering and processing of natural gas; the timing of receipt of necessary governmental permits by PVA and by PVR or PVR's lessees; the risks associated with having or not having price risk management programs; labor relations and costs; accidents; changes in governmental regulation or enforcement practices, especially with respect to environmental, health and safety matters, including with respect to emissions levels applicable to coal-burning power generators; uncertainties relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the outcome of current and future litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. regarding mine permitting; risks and uncertainties relating to general domestic and international economic (including inflation and interest rates) and political conditions (including the impact of potential terrorist attacks); the experience and financial condition of PVR's coal lessees and midstream customers, including the lessees' ability to satisfy their royalty, environmental, reclamation Reclamation A claim for the right to return or the right to demand the return of a security that has been previously accepted as a result of bad delivery or other irregularities in the delivery and settlement process. and other obligations to PVR and others; PVR's ability to expand its midstream business by constructing new gathering systems, pipelines and processing facilities on an economic basis and in a timely manner; coal handling joint venture operations; and changes in financial market conditions. Additional information concerning these and other factors can be found in PVA's press releases and public periodic filings with the Securities and Exchange Commission, including PVA's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005. Many of the factors that will determine PVA's future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . PVA undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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