Core Oil & Gas Plays
Penn Virginia Corporation (NYSE: PVA) is an independent oil and gas company engaged in the exploration, development and production of oil, NGLs and natural gas in various domestic onshore regions of the United States, with a primary focus in Texas, and other properties in the Mid-Continent, Mississippi and the Marcellus Shale in Appalachia.
PVA was incorporated in the Commonwealth of Virginia in 1882. Our headquarters and corporate office is located in Radnor, Pennsylvania, and our operations are primarily conducted from our office in Houston, Texas. We also have district operations facilities at various locations in Texas, Oklahoma and Mississippi.
In mid-2010, we made the decision to shift our investment and production focus away from natural gas and toward higher margin oil and NGLs. Over the course of three years, we have succeeded in transforming ourselves from a predominantly natural gas producer to a predominantly oil and NGL producer. Since 2010, we have increased our acreage position in the Eagle Ford Shale from approximately 7,500 net acres to approximately 80,000 net acres as of February 2014 and, in 2013, crude oil and NGLs accounted for approximately 65 percent of total production and 88 percent of product revenues as compared to 15 percent of production and 26 percent of product revenues in 2009. Also in 2013, we spent $494 million, or 97 percent, of our capital program total on Eagle Ford Shale operations. Our Eagle Ford Shale properties are located principally in the “volatile oil window” of the play, and we believe they provide us with an approximate ten-year drilling inventory based on our current pace of drilling and results.
To accomplish our natural gas-to-oil transformation, we made several significant oil and NGL acquisitions in the Eagle Ford Shale, and disposed of a significant portion of our natural gas and other non-core assets. We completed our initial acquisition in 2010 when we acquired 6,800 net undeveloped Eagle Ford Shale acres in Gonzales County, Texas. In April 2013, we made a significant acquisition of 40,600 gross (17,700 net) acres in Gonzales County and Lavaca County, Texas, including producing properties, primarily contiguous to our initial acreage. In addition, since 2010, we have acquired through a combination of leasing and earning through drilling approximately 70,000 gross (55,000 net) Eagle Ford Shale acres in Gonzales and Lavaca Counties contiguous to or near our previously acquired Eagle Ford Shale acreage.
Since 2010, we have disposed of an aggregate of approximately $161 million of natural gas assets located in Appalachia, the Arkoma Basin and the Gulf Coast regions of South Texas and Louisiana. In addition, in January 2014, we sold our South Texas natural gas gathering assets for $100 million, or approximately $94 million net to our working interest, and we recently initiated a process to sell our Granite Wash and Selma Chalk assets, which include proved reserves of approximately 26 MMBOE and production of approximately 4,200 BOEPD.