-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OtSmhj9kezyyPw4PVPky3ckKa4o/UtDum1JEyB2hDw0RNxq0YwS/KTqRHF0iWQg2 m62IPsC8krlVCDg1NX2NaA== 0000077159-98-000047.txt : 19980518 0000077159-98-000047.hdr.sgml : 19980518 ACCESSION NUMBER: 0000077159-98-000047 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PENN VIRGINIA CORP CENTRAL INDEX KEY: 0000077159 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 231184320 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13283 FILM NUMBER: 98622263 BUSINESS ADDRESS: STREET 1: 100 MATSONFORD ROAD SUITE 200 STREET 2: ONE RADNOR CORPORATE CENTER CITY: RADNOR STATE: PA ZIP: 19087 BUSINESS PHONE: 6106878900 MAIL ADDRESS: STREET 1: 800 BELLEVUE 200 S BROAD ST CITY: PHILADELPHIA STATE: PA ZIP: 19102 FORMER COMPANY: FORMER CONFORMED NAME: VIRGINIA COAL & IRON CO DATE OF NAME CHANGE: 19670501 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1998 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 0-753 PENN VIRGINIA CORPORATION (Exact name of registrant as specified in its charter) Virginia 23-1184320 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 100 MATSONFORD ROAD SUITE 200 RADNOR, PA 19807___ (Address of principal executive offices) (Zip Code) (610) 687-8900 (Registrant's telephone number, including area code) _________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Number of shares of common stock of registrant outstanding at May 8, 1998: 8,921,866 PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts)
Three Months Ended March 31, ------------------ 1998 1997 ------- -------- (Unaudited) Revenues: Oil and condensate $ 117 $ 227 Natural gas 4,991 5,620 Natural gas royalties 363 520 Coal royalties 2,569 2,645 Timber 209 206 Dividends 662 662 Gain on the sale of property 0 9 Other income 153 361 ------- ------- Total revenues $ 9,064 $10,250 Expenses: Operating expenses $ 967 $ 832 Exploration expenses 49 138 Taxes other than income 681 691 General and administrative 1,781 1,614 Loss on the sale of property 4 2 Depreciation, depletion, amortization 1,822 1,503 ------- ------- Total expenses $ 5,304 $ 4,780 Operating Income $ 3,760 $ 5,470 Other (Income) Expense: Interest expense $ 489 $ 473 Other income (816) (992) ------- -------- Income before income tax $ 4,087 $ 5,989 Income tax expense 935 1,263 ------- ------- Net Income $ 3,152 $ 4,726 ======= ======= Net Income per share, basic 0.38 0.55 ======= ======= Net Income per share, diluted 0.37 0.55 ====== ====== Weighted average shares outstanding 8,278 8,620 The accompanying notes are an integral part of these condensed consolidated financial statements.
-1- PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 1998 1997 --------- ------------ (Unaudited) ASSETS Current assets Cash and cash equivalents $ 2,821 $ 831 Accounts receivable 4,559 7,404 Current portion of long-term notes receivable 1,383 2,414 Current deferred income taxes 696 696 Inventories 243 233 Prepaid expenses 243 311 -------- ------- Total current assets 9,945 11,889 -------- ------- Investments 123,633 100,885 Long-term notes receivable 4,310 4,195 Oil and gas properties; wells and equipment, using the successful efforts method of accounting 149,284 148,487 Other property, plant and equipment 42,625 42,626 Less: Accumulated depreciation, depletion and amortization (63,473) (61,677) --------- -------- Total property, plant and equipment 128,436 129,436 -------- --------- Intangible assets, net of amortization 581 537 Other assets 264 288 -------- -------- Total assets $267,169 $247,230 ======== ======== The accompanying notes are an integral part of these condensed consolidated financial statements.
-2- PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 1998 1997 --------- ------------ (Unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current installments on long-term debt $ 2,025 $ 2,025 Accounts payable 1,195 1,828 Accrued expenses 4,326 5,885 Deferred liabilities 279 279 Taxes on income 796 144 ------- ------- Total current liabilities 8,621 10,161 ------- ------- Other liabilities 4,838 4,659 Deferred income taxes 44,602 36,640 Long-term debt 29,095 31,903 Minority interest 160 163 ------- ------- Total liabilities 87,316 83,526 ------- ------- Commitments and contingencies - - Shareholders' equity Preferred stock of $100 par value- authorized 100,000 shares; none issued Common stock of $6.25 par value- authorized 16,000,000 shares, issued 8,906,866 shares and 8,901,438 shares in 1998 and 1997, respectively 55,793 55,634 Other paid in capital 8,294 8,431 Retained earnings 53,104 51,813 ------- --------- 117,191 115,878 Less: 627,108 shares in 1998 and 1997 of common stock held in treasury, at cost 14,024 14,024 Pension liability 228 228 Unearned compensation - ESOP 1,600 1,650 Add: Net unrealized investment holding gain 78,514 63,728 -------- -------- Total shareholders' equity 179,853 163,704 ------- -------- Total liabilities and shareholders' equity $267,169 $247,230 ======== ======== The accompanying notes are an integral part of these condensed consolidated financial statements.
-3- PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (Dollars in thousands)
Three Months Ended March 31, -------------------- 1998 1997 --------- --------- (Unaudited) Cash flow from operating activities: Net Income $ 3,152 $ 4,726 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, depletion, and amortization 1,822 1,503 (Gain), loss on sale of property 4 (7) Deferred income taxes 0 457 Other (562) (706) Decrease in current assets 2,904 420 Decrease in current liabilities (1,539) (1,152) Increase in other assets (44) (15) Increase (decrease) in other liabilities 178 (30) ------- ------- Net Cash provided by operating activities $5,915 $ 5,196 Cash flows from investing activities: Proceeds from the sale of securities $ 0 $ 350 Proceeds from notes 1,489 1,230 Proceeds from sale of fixed assets 21 26 Capital expenditures (820) (9,855) ------ -------- Net Cash provided (used) by investing activities $ 690 $(8,249) Cash flows from financing activities: Dividends paid $(1,862) $(1,859) Proceeds from long-term debt borrowings 0 16,013 Repayment of long-term debt principal (2,825) (2,542) Purchase of treasury stock 50 (8,662) Issuance of stock 22 16 -------- -------- Net Cash provided (used) by financing activities $(4,615) $ 2,966 -------- ------- Net increase (decrease) in cash and cash equivalents $ 1,990 $ (87) Cash and cash equivalents-beginning balance 831 1,893 ------- -------- Cash and cash equivalents-ending balance $ 2,821 $ 1,806 ======= ======== Supplemental disclosures of cash flow information: Cash paid to date for: Interest $ 463 $ 412 Income taxes - 833 The accompanying notes are an integral part of these condensed consolidated financial statements.
-4- PENN VIRGINIA CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 1998 - ----------------------------------------------------------------- (1) ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements of Penn Virginia Corporation and its subsidiaries (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial reporting and SEC regulations. These statements involve the use of estimates and judgments where appropriate. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the Company's consolidated financial statements and footnotes included in the Company's December 31, 1997 Annual Report on Form 10-K. Operating results for the three months ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ended December 31, 1998. (2) SECURITIES The cost, gross unrealized holding gains or losses and market value for available-for-sale securities at March 31, 1998 were as follows:
Gross Unrealized Market Cost Holding Gain (Loss) Value ------ ------------------- ------ Available-for-sale: Norfolk Southern Corporation $2,839 $120,768 $123,607 Other 3 23 26 ------- -------- -------- - - $2,842 $120,791 $123,633
(3) LEGAL The Company is involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these cannot be predicted with certainty, Company management believes these claims will not have a material effect on the Company's financial position, liquidity or operations. (4) EARNINGS PER SHARE In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" which establishes new standards for computing and presenting earnings per share. The provisions of the statement are effective for fiscal years ending after December 15, 1997. The following is a reconciliation of the numerators and denominators used in the calculation of basic and diluted earnings per share ("EPS") for income from continuing operations for the quarters ended March 31, 1998 and 1997. -5-
March 31, 1998 ----------------------------------- Income Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- --------- (In thousands except per share amounts) Basic EPS: Income from continuing operations $ 3,152 8,278 $ 0.38 Dilutive Securities: Stock options - 234 -------- ----- Diluted EPS: Income from continuing operations $ 3,152 8,512 $ 0.37 March 31, 1997 --------------------------------- Income Shares Per Share (Numerator) (Denominator) Amount ----------- ------------- --------- (In thousands except per share amounts) Basic EPS: Income from continuing operations $ 4,726 8,620 $ 0.55 Dilutive Securities: Stock options - - -------- ----- Diluted EPS: Income from continuing operations $ 4,726 8,620 $ 0.55
COMPREHENSIVE INCOME In the first quarter of 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income," which requires the display of comprehensive income and its components in the financial statements. Comprehensive income represents all changes in equity during the reporting period, including net income and charges directly to equity, which are excluded from net income. For the three month periods ended March 31, 1998 and 1997, the components of comprehensive income are as follows:
Three Months Ended March 31, -------------------- 1998 1997 --------- ------- Net income $ 3,152 $ 4,726 Unrealized holding gains (losses) on available for sale securities 14,786 (1,971) --------- -------- Comprehensive income $ 17,938 $ 2,755
START-UP ACTIVITIES In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up Activities," which requires costs of start-up activities to be expensed as incurred. This statement is effective for financial statements beginning after December 15, 1998 and requires entities to expense currently capitalized costs related to start-up activities as a cumulative effect of a change in accounting principle upon adoption of this statement. The impact of this new standard is not expected to have a material impact on the Company's financial position or results of operations. -6- ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Penn Virginia reported 1998 first quarter earnings of $3.2 million or $0.37 per share (diluted) compared with $4.7 million or $0.55 per share (diluted) for the first quarter of 1997. On a consolidated basis, revenues decreased $1.2 million, primarily as a result of price decreases in the oil and gas segment. Operating expenses for the first quarter of 1998 increased $0.1 million due to additional gathering and compression expenses in the oil and gas segment. Interest expense for the first quarter of 1998 remained flat compared with the first quarter of 1997. Income tax expense decreased from $1.3 million in the first quarter of 1997 to $0.9 million in the first quarter of 1998 due to a decrease in income before taxes of $1.9 million. The Company operates in two business segments: oil and gas and coal land management. The oil and gas segment explores for, develops and produces crude oil and natural gas in western Virginia, southern West Virginia and eastern Kentucky. The Company also owns mineral rights to oil and gas reserves. The coal land management segment includes Penn Virginia's mineral rights to coal reserves, its timber assets and land assets. Selected operating and financial data by segment is presented below. -7- Oil and Gas Operating income for the oil and gas segment was $1.8 million for the first quarter of 1998 compared with $3.0 million for the first quarter of 1998. Operational and financial data for the Company's oil and gas segment for the 1998 and 1997 first quarter is summarized in the following tables: Operations Summary
Three Months Ended March 31, -------------------- 1998 1997 ------- ----- Production Natural gas (MMcf)-Working Interest 1,913 1,735 Natural gas (MMcf)-Royalty Interest 140 146 Oil and condensate (MBbls) 9 11 Production, MMcfe 2,107 1,947 Average Realized Prices Natural gas ($/Mcf)- Working Interest $ 2.61 $ 3.24 Natural gas ($/Mcf)- Royalty Interest 2.59 3.56 Oil and condensate ($/Bbl) 13.00 20.64 Average Costs (per MMcfe) Lease operating $ 0.45 $ 0.40 Exploration expenses 0.02 0.04 Taxes other than on income 0.26 0.33 General and administrative 0.29 0.33 Depreciation, depletion and amortization 0.78 0.70
Approximately 50 percent of the Company's 1998 working interest natural gas production was sold at market prices, with the remaining 50 percent sold under fixed-price term contracts. The Company will, when circumstances warrant, hedge the price received for market-sensitive production through the use of swaps with purchased options. Gains and losses from hedging activities are included in natural gas revenues when the hedged production occurs. In the first quarter of 1998, the Company recognized a $200,550 loss on hedging activities. The company had no comparable hedging activities for the first quarter of 1997. The following table shows the effect of hedging activities on the Company's working interest natural gas prices: Hedging Summary
Three Months Ended March 31, -------------------- 1998 1997 -------- -------- Natural gas prices ($/Mcf): Actual price received for production $ 2.71 $ 3.24 Effect of hedging activities (0.10) - -------- ------- Average price $ 2.61 $ 3.24
-8- Financial Summary
Three Months Ended March 31, ------------------- 1998 1997 -------- ------- (Dollars in thousands) (Unaudited) Revenues: Oil and condensate 117 227 Natural gas $ 4,991 $ 5,620 Natural gas royalties 363 520 Other income 72 76 -------- -------- Total revenues $ 5,543 $ 6,443 -------- -------- Expenses: Operating expenses $ 939 $ 787 Exploration expenses 37 84 Taxes other than income 556 636 General and administrative 606 636 Loss on the sale of property 4 1 Depreciation and depletion 1,651 1,360 -------- ------- Total expenses 3,793 3,504 -------- ------- Operating Income $ 1,750 $ 2,939 ======== =======
OIL AND CONDENSATE SALES. Oil sales decreased $110,000 (48 percent) in the first quarter of 1998 compared with the same period of 1997. Prices per barrel were lower, averaging $13.00 per barrel (Bbl) for 1998 compared with $20.64 per Bbl for 1997. Also oil volume was down 2 MBbls for first quarter of 1998 compared with 1997. NATURAL GAS. Natural gas sales decreased $0.6 million (11 percent) in the first quarter of 1998 compared with the same period of 1997. Natural gas prices were down approximately 20 percent in the first quarter of 1998 compared with the first quarter of 1997. The average price received by the Company for its working interest gas was $2.61 per thousand cubic feet (Mcf) compared with $3.24 per Mcf for the same period of 1997. Volumes (MMcfe) were up approximately eight percent for the first quarter of 1998 compared with the first quarter of 1997. NATURAL GAS ROYALTIES. Oil and gas royalties decreased $157,000 (30 percent) in the first quarter of 1998 compared with the same period of 1997. This variance resulted from a decrease in pricing from $3.56 in the first quarter of 1997 to $2.59 in the first quarter of 1998. OTHER INCOME. Other income remained flat for the first quarter of 1998 compared with the first quarter for 1997. OPERATING EXPENSES. Operating expenses for the first quarter of 1998 were $939,000, which is an increase of $152,000 (19 percent) compared with the first quarter of 1997. On a MMcfe basis, operating expenses increased from $0.40 cents in 1997 to $0.45 cents in 1998. This increase is largely a result of increased gathering and compression expenses. EXPLORATION EXPENSES. Exploration expenses for the first quarter of 1998 were $37,000 compared with $84,000 in the first quarter of 1996. This 56 percent decrease is a result of lower costs incurred at this time on geological evaluations on various properties. TAXES OTHER THAN ON INCOME. Taxes other than on income decreased $80,000 (13 percent) in the first quarter of 1998 compared to the same period in 1997. This decrease is a result of lower severance and ad valorem taxes related to lower revenues resulting from price decreases. -9- GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased $30,000 (5 percent) in the first quarter of 1998 compared with the same period in 1997. This decrease is a result of a reduction in salary and related employee benefit expenses. DEPRECIATION AND DEPLETION. Depreciation and depletion expense increased $291,000 (21 percent) from $1,360,000 in the first quarter of 1997 to $1,651,000 in the first quarter 1998. Decreases in reserve estimates at December 31, 1997 in various fields have resulted in depletion rate increases. The rate increased from $0.70 per Mcfe in the first quarter of 1997 to $0.78 per Mcfe in the first quarter of 1998. -10- Coal Land Management Operating income for the coal segment was $2.1 million for the first quarter of 1998 compared with $2.6 million for the first quarter of 1997. Operational and financial data for the Company's coal segment for the 1998 and 1997 first quarter is summarized in the following tables: Operations Summary
Three Months Ended March 31, ------------------ 1998 1997 -------- ------- Production Timber (Mbf) 984 829 Coal tons (000's) 1,221 1,173 Average Realized Prices Timber ($/Mbf) $ 191 $ 220 Coal royalties ($/ton) 2.10 2.25 Average Costs (per ton) Lease operating $ 0.03 $0.04 Exploration expenses 0.01 0.05 Taxes other than on income 0.07 0.01 General and administrative 0.41 0.29 Depreciation, depletion and amortization 0.12 0.10
Financial Summary
Three Months Ended March 31, ------------------ 1998 1997 -------- ------- (Dollars in thousands) (Unaudited) Revenues: Coal royalties $ 2,569 $ 2,645 Timber sales 209 206 Gain on the sale of property - 9 Other income 81 285 ------- ------- Total revenues 2,859 3,145 ------- ------- Expenses: Operating expenses 28 44 Exploration expenses 11 54 Taxes other than income 86 11 General and administrative 498 345 Loss on the sale of property 1 1 Depreciation and depletion 142 118 ------ ------ Total expenses 766 573 ------ ------ Operating Income $2,093 $2,572 ====== ======
-11- COAL ROYALTIES. Coal royalties decreased $76,000 (3 percent) in the first quarter of 1998 compared with the same period in 1997. This decrease resulted from a decline in the average realization per ton from $2.25 in the first quarter of 1997 to $2.10 in the first quarter of 1998. The loss of a sales contract by one lessee and financial difficulties experienced by another lessee reduced first quarter production. Additionally, power outages and coal transportation delays due to a severe snowstorm adversely affected the production of several of the Company's lessees. TIMBER SALES. Timber sales were virtually unchanged in the first quarter of 1998 compared with the same period of 1997. Volume sold was 984 Mbf in the first quarter of 1998 compared with 829 Mbf in the first quarter of 1997. The average realized prices also decreased from $220 per Mbf in the first quarter of 1997 to $191 per Mbf in the first quarter of 1998. OTHER INCOME. Other income decreased $204,000 (716 percent) for the first quarter of 1998 compared with the first quarter of 1997. In the first quarter of 1997, the Company recognized income from signing bonuses paid by new lessees to secure leases on the Company's Wise coal properties. The majority of these reserves were leased in 1997. OPERATING EXPENSES. Operating expenses decreased $16,000 (36 percent) from $44,000 in the first quarter of 1997 to $28,000 in the first quarter of 1998. This decrease is a result of lower costs associated with the sale of timber on the Company's properties. EXPLORATION EXPENSES. Exploration expenses decreased $42,000 (80 percent) from $54,000 in the first quarter of 1997 to $11,000 in the first quarter of 1998. This decrease is a result of the timing of the startup of the Company's coal core drilling program. TAXES OTHER THAN INCOME. Taxes other than on income increased $75,000 (682 percent) from $11,000 in the first quarter of 1997 to $86,000 in the first quarter of 1998. The numbers reported in the first quarter of 1997 reflected an adjustment to property taxes. GENERAL AND ADMINISTRATIVE. General and administrative expenses increased $153,000 (44 percent) in the first quarter of 1998 compared with the same period of 1997. These increases are related to the opening of a satellite office in Charleston, West Virginia as well as increases in salary and related employee benefits. DEPRECIATION AND DEPLETION. Depreciation and depletion increased $24,000 (20 percent) from $118,000 in the first quarter of 1997 to $142,000 in the first quarter of 1998. The depletion rate increased from $0.10 per ton to $0.12 per ton. Capital Expenditures, Capital Resources and Liquidity CAPITAL EXPENDITURES. In the first quarter of 1998, capital expenditures totaled $820,000 compared with $9,855,000 in the first quarter of 1997. These expenditures were related to the drilling and development of wells in the oil and gas segment in the first quarter of 1997. Of the 60 to 65 net wells scheduled for drilling in 1998, as of the end of the first quarter 6.5 net wells had been drilled. The Company successfully completed two coal reserve acquisitions during the first quarter of 1997. In January, a transaction was completed for a property in Virginia. The Company acquired 10.5 million tons of high quality metallurgical coal reserves. The purchase price was approximately $7.0 million. In February, the Company acquired 7.5 million tons of coal contiguous to its existing Wise reserves for approximately $1.9 million. The reserves have been leased to an operator. -12- CAPITAL RESOURCES AND LIQUIDITY. Net cash provided by operating activities was $5.9 million in the first quarter of 1998 compared with $5.2 million in the first quarter of 1997. The Company's borrowings decreased from $31.9 million at the end of 1997 to $29.0 million at March 31, 1998. The Company has entered into four fixed-price term contracts with respect to a portion of its natural gas production to limit exposure to price fluctuations. The Company has sold approximately 9,000 net Mcf per day at a weighted average price in excess of $2.75 per Mcf. These physical sales cover various periods from April 1998 to December 1998. Additionally, the Company has entered into two natural gas derivative transactions. The financial instruments executed provide a price floor to limit downside price risk and a market participation price that allows the Company to receive the benefit of a price upturn. The two financial transactions are for 5,000 MMBtu per day each with a floor of approximately $2.10 per MMBtu and market re-opener at $2.48 per MMBtu and $2.35 per MMBtu, respectively with terms ending October 1999. FORWARD-LOOKING STATEMENTS. Statements included in this report which are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto) are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. In addition, Penn Virginia and its representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding development activities, capital expenditures, acquisitions and dispositions, drilling and exploration programs, expected commencement dates of coal mining or oil and gas production, projected quantities of future oil and gas production by Penn Virginia, projected quantities of future coal production by the Company's lessees producing coal from reserves leased from Penn Virginia, costs and expenditures as well as projected demand or supply for coal and oil and gas, which will affect sales levels, prices and royalties realized by Penn Virginia. These forward-looking statements are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning future events impacting Penn Virginia and therefore involve a number of risks and uncertainties. Penn Virginia cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause the actual results of operations or financial condition of Penn Virginia to differ include, but are not necessarily limited to: the cost of finding and successfully developing oil and gas reserves; the cost of finding new coal reserves; the ability to acquire new oil and gas and coal reserves on satisfactory terms; the price for which such reserves can be sold; the volatility of commodity prices for oil and gas and coal; the risks associated with having or not having price risk management programs; Penn Virginia's ability to lease new and existing coal reserves; the ability of Penn Virginia's lessees to produce sufficient quantities of coal on an economic basis from Penn Virginia's reserves; the ability of lessees to obtain favorable contracts for coal produced from Penn Virginia reserves; Penn Virginia's ability to obtain adequate pipeline transportation capacity for its oil and gas production; competition among producers in the coal and oil and gas industries generally and in the Appalachian Basin in particular; the extent to which the amount and quality of actual production differs from estimated recoverable coal reserves and proved oil and gas reserves; unanticipated geological problems; availability of required materials and equipment; the occurrence of unusual weather or operating conditions including force majeure or events; the failure of equipment or processes to operate in accordance with specifications or expectations; delays in anticipated start-up dates; environmental risks affecting the drilling and producing of oil and gas wells or the mining of coal reserves; the timing of receipt of necessary governmental permits; 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; risks and uncertainties relating to general domestic and international economic (including inflation and interest rates) and political conditions; the experience and financial condition of lessees of coal reserves, joint venture partners and purchasers of reserves in transactions financed by Penn Virginia, including their ability to satisfy their royalty, environmental, reclamation and other obligations to Penn Virginia and others; changes in financial market conditions; changes in the market prices or value of the marketable securities owned by Penn Virginia, including the price of Norfolk Southern common stock and other risk factors detailed in Penn Virginia's -13- Securities and Exchange commission filings. Many of such factors are beyond Penn Virginia's ability to control or predict. Readers are cautioned not to put undue reliance on forward- looking statements. While Penn Virginia periodically reassesses material trends and uncertainties affecting Penn Virginia's results of operations and financial condition in connection with the preparation of Management's Discussion and Analysis of Results of Operations and Financial Condition and certain other sections contained in Penn Virginia's quarterly, annual or other reports filed with the Securities and Exchange Commission, Penn Virginia does not intend to publicly review or update any particular forward-looking statement, whether as a result of new information, future events or otherwise. -14- PART II Other information Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (27) Financial Data Schedule (b) Reports on Form 8-K No reports on Form 8-K were filed for the quarter ended March 31, 1998 -15- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PENN VIRGINIA CORPORATION Date: May 15, 1998 By: /S/ STEVEN W. THOLEN -------------------------- Steven W. Tholen Vice President and Chief Financial Officer Date: May 15, 1998 By: /S/ ANN N. HORTON --------------------------- Ann N.Horton, Controller and Principal Accounting Officer -16- PENN VIRGINIA CORPORATION INDEX PAGE PART I Financial Information: Item 1. Financial Statements Condensed Consolidated Statements of Income for the three months ended March 31, 1998 and 1997 1 Condensed Consolidated Balance Sheets as of March 31, 1998 and December 31, 1997 2 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and 1997 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II Other Information Item 6. Exhibits and Reports on Form 8-K 15 EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 1ST QTR 10-Q
5 1000 3-MOS DEC-31-1998 MAR-31-1998 2,821 0 4,559 0 243 9,945 191,909 63,473 267,169 8,621 0 0 0 55,793 124,060 267,169 8,249 9,064 967 967 2,566 0 489 4,087 935 3,152 0 0 0 3,152 0.38 0.37
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