Penn Virginia: Company unlikely to tap credit facility through 2011

By Jennifer Lanning Drey

Savannah, Ga., Oct. 13 - Penn Virginia Corp. has enough cash on its balance sheet to get through 2010 and probably 2011 without needing to use its credit facility, H. Baird Whitehead, Penn Virginia's chief operating officer, said during a Wednesday presentation at the IPAA Oil & Gas Symposium in San Francisco.

The company has changed its investment strategy going forward so that it is now spending nearly all of its money on either oily or liquid-rich plays. Gas drilling has been discontinued in the short term due to product pricing.

"We've got a strong balance sheet, and we're in good shape to execute the plan we have ahead of us in transitioning to a more oily situation. We have plenty of liquidity to go ahead and fund our operations," Whitehead said.

The company had $750 million of liquidity at the end of the second quarter, which included an undrawn credit facility and more than $300 million of cash on the balance sheet.

Penn Virginia had net debt of $175 million at the end of the second quarter.

Although currently transitioning to become an oilier company, Whitehead said Penn Virginia is also prepared for a turnaround in the gas markets.

"We've got these gas plays that are not going anyplace, that we've made improvements on, and that are keyed up to move forward once we decide to and once the gas market dictates that it makes sense to do that," he said.

Penn Virginia is a Radnor, Pa.-based natural gas and oil company.

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