Moody's lowers Penn Virginia

Moody's Investors Service said it downgraded Penn Virginia Corp.'s corporate family rating to B2 and senior unsecured notes rating to B3.

At the same time, Moody's lowered Penn Virginia's speculative grade liquidity rating to SGL-3 from SGL-2, reflecting adequate liquidity.

The outlook remains negative.

"The downgrade reflects Penn Virginia's diminishing liquidity and significant anticipated negative free cash flow in 2012 arising from its aggressive drilling campaign in the Eagle Ford shale and stubbornly weak North American natural gas prices," Moody's analyst Sajjad Alam said in a news release.

"While the planned asset sales in the second quarter of 2012 should ease near term liquidity pressures, solid execution on the drilling front and some recovery in natural gas prices will be necessary to prevent further deterioration in credit metrics," Alam added in the release.

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