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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Virginia
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23-1184320
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨ (Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item
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Page
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Part I - Financial Information
|
||
1.
|
Financial Statements
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1 |
Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2011 and 2010
|
1
|
|
Condensed Consolidated Balance Sheets as of June 30, 2011 and December 31, 2010
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2
|
|
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010
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3
|
|
Notes to Condensed Consolidated Financial Statements:
|
||
1. Organization
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4
|
|
2. Basis of Presentation
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4
|
|
3. Acquisitions and Divestitures
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4
|
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4. Accounts Receivable
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5
|
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5. Derivative Instruments
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5
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6. Property and Equipment
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8
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7. Long-Term Debt
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8
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8. Additional Balance Sheet Detail
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11
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9. Fair Value Measurements
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11
|
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10. Commitments and Contingencies
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13
|
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11. Shareholders’ Equity and Comprehensive Income
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14
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12. Share-Based Compensation
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14
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13. Restructuring Activities
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14
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14. Impairments
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15
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15. Interest Expense
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15
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16. Earnings per Share
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16
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17. Discontinued Operations
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16
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Forward-Looking Statements
|
17
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2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
18 |
Overview of Business
|
18
|
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Key Developments
|
19
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Results of Operations
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21
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Liquidity and Capital Resources
|
33
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Environmental Matters
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38
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Critical Accounting Estimates
|
38
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New Accounting Standards
|
38
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3.
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Quantitative and Qualitative Disclosures About Market Risk
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39
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4.
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Controls and Procedures
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40
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Part II - Other Information
|
||
6.
|
Exhibits
|
41
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Signatures
|
42
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Three Months Ended June 30,
|
Six Months Ended June 30,
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|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues
|
||||||||||||||||
Natural gas
|
$ | 38,300 | $ | 38,819 | $ | 79,489 | $ | 86,807 | ||||||||
Crude oil
|
21,548 | 10,875 | 38,131 | 24,721 | ||||||||||||
Natural gas liquids (NGLs)
|
13,161 | 2,662 | 23,082 | 7,528 | ||||||||||||
Gain (loss) on sale of property and equipment
|
(28 | ) | 125 | 452 | 336 | |||||||||||
Other
|
637 | 807 | 1,047 | 1,774 | ||||||||||||
Total revenues
|
73,618 | 53,288 | 142,201 | 121,166 | ||||||||||||
Operating expenses
|
||||||||||||||||
Lease operating
|
10,787 | 9,155 | 21,064 | 17,892 | ||||||||||||
Gathering, processing and transportation
|
4,281 | 3,309 | 8,309 | 6,540 | ||||||||||||
Production and ad valorem taxes
|
2,834 | 3,105 | 7,898 | 7,375 | ||||||||||||
General and administrative
|
12,954 | 15,827 | 26,306 | 30,852 | ||||||||||||
Exploration
|
19,368 | 9,541 | 48,916 | 15,570 | ||||||||||||
Depreciation, depletion and amortization
|
33,036 | 32,105 | 67,879 | 62,134 | ||||||||||||
Impairments
|
71,071 | 1,124 | 71,071 | 1,124 | ||||||||||||
Other
|
- | - | - | 465 | ||||||||||||
Total operating expenses
|
154,331 | 74,166 | 251,443 | 141,952 | ||||||||||||
Operating loss
|
(80,713 | ) | (20,878 | ) | (109,242 | ) | (20,786 | ) | ||||||||
Other income (expense)
|
||||||||||||||||
Interest expense
|
(14,143 | ) | (13,321 | ) | (27,627 | ) | (26,992 | ) | ||||||||
Loss on extinguishment of debt
|
(24,238 | ) | - | (24,238 | ) | - | ||||||||||
Derivatives
|
7,001 | (580 | ) | 8,329 | 29,297 | |||||||||||
Other
|
129 | 517 | 273 | 1,763 | ||||||||||||
Loss from continuing operations before income taxes
|
(111,964 | ) | (34,262 | ) | (152,505 | ) | (16,718 | ) | ||||||||
Income tax benefit
|
40,046 | 13,165 | 54,247 | 6,387 | ||||||||||||
Loss from continuing operations
|
(71,918 | ) | (21,097 | ) | (98,258 | ) | (10,331 | ) | ||||||||
Income from discontinued operations, net of tax
|
- | 21,308 | - | 33,482 | ||||||||||||
Gain on sale of discontinued operations, net of tax
|
- | 49,612 | - | 49,612 | ||||||||||||
Net income (loss)
|
(71,918 | ) | 49,823 | (98,258 | ) | 72,763 | ||||||||||
Less net income attributable to noncontrolling interests in discontinued operations
|
- | (18,744 | ) | - | (28,090 | ) | ||||||||||
Income (loss) attributable to Penn Virginia Corporation
|
$ | (71,918 | ) | $ | 31,079 | $ | (98,258 | ) | $ | 44,673 | ||||||
Earnings (loss) per share attributable to Penn Virginia Corporation - Basic:
|
||||||||||||||||
Continuing operations
|
$ | (1.57 | ) | $ | (0.46 | ) | $ | (2.15 | ) | $ | (0.23 | ) | ||||
Discontinued operations
|
- | 0.06 | - | 0.12 | ||||||||||||
Gain on sale of discontinued operations
|
- | 1.08 | - | 1.09 | ||||||||||||
Net income (loss)
|
$ | (1.57 | ) | $ | 0.68 | $ | (2.15 | ) | $ | 0.98 | ||||||
Earnings (loss) per share attributable to Penn Virginia Corporation - Diluted:
|
||||||||||||||||
Continuing operations
|
$ | (1.57 | ) | $ | (0.46 | ) | $ | (2.15 | ) | $ | (0.23 | ) | ||||
Discontinued operations
|
- | 0.06 | - | 0.12 | ||||||||||||
Gain on sale of discontinued operations
|
- | 1.08 | - | 1.09 | ||||||||||||
Net income (loss)
|
$ | (1.57 | ) | $ | 0.68 | $ | (2.15 | ) | $ | 0.98 | ||||||
Weighted average shares outstanding, basic
|
45,768 | 45,539 | 45,724 | 45,508 | ||||||||||||
Weighted average shares outstanding, diluted
|
45,768 | 45,790 | 45,724 | 45,767 |
As of
|
||||||||
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 30,681 | $ | 120,911 | ||||
Accounts receivable, net of allowance for doubtful accounts
|
67,779 | 72,378 | ||||||
Derivative assets
|
14,440 | 16,818 | ||||||
Other current assets
|
3,904 | 4,233 | ||||||
Total current assets
|
116,804 | 214,340 | ||||||
Property and equipment, net (successful efforts method)
|
1,728,121 | 1,705,584 | ||||||
Derivative assets
|
2,547 | 3,889 | ||||||
Other assets
|
22,158 | 20,787 | ||||||
Total assets
|
$ | 1,869,630 | $ | 1,944,600 | ||||
Liabilities and Shareholders’ Equity
|
||||||||
Current liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$ | 89,324 | $ | 99,661 | ||||
Derivative liabilities
|
115 | 388 | ||||||
Deferred income taxes
|
3,113 | 4,318 | ||||||
Income taxes payable
|
2,820 | 2,627 | ||||||
Total current liabilities
|
95,372 | 106,994 | ||||||
Other liabilities
|
18,578 | 19,958 | ||||||
Deferred income taxes
|
276,405 | 330,836 | ||||||
Long-term debt
|
597,668 | 506,536 | ||||||
Commitments and contingencies (Note 10)
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock of $100 par value – 100,000 shares authorized; none issued
|
- | - | ||||||
Common stock of $0.01 par value – 128,000,000 shares authorized; shares issued of 45,688,179 and 45,556,854 as of June 30, 2011 and December 31, 2010, respectively
|
269 | 267 | ||||||
Paid-in capital
|
685,559 | 680,981 | ||||||
Retained earnings
|
197,059 | 300,473 | ||||||
Deferred compensation obligation
|
3,235 | 2,743 | ||||||
Accumulated other comprehensive loss
|
(870 | ) | (938 | ) | ||||
Treasury stock – 162,209 and 125,357 shares of common stock, at cost, as of June 30, 2011 and December 31, 2010, respectively
|
(3,645 | ) | (3,250 | ) | ||||
Total shareholders’ equity
|
881,607 | 980,276 | ||||||
Total liabilities and shareholders’ equity
|
$ | 1,869,630 | $ | 1,944,600 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities
|
||||||||
Net income (loss)
|
$ | (98,258 | ) | $ | 72,763 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities from continuing operations:
|
||||||||
Income from discontinued operations before income taxes
|
- | (36,832 | ) | |||||
Gain on sale of dicontinued operations before income taxes
|
- | (84,740 | ) | |||||
Non-cash portion of loss on extinguishment of debt
|
21,822 | - | ||||||
Depreciation, depletion and amortization
|
67,879 | 62,134 | ||||||
Impairments
|
71,071 | 1,124 | ||||||
Derivative contracts:
|
||||||||
Net gains
|
(8,329 | ) | (29,297 | ) | ||||
Cash settlements
|
11,775 | 17,484 | ||||||
Deferred income tax benefit
|
(54,247 | ) | (7,733 | ) | ||||
Loss (gain) on the sale of property and equipment, net
|
(452 | ) | 129 | |||||
Dry hole and unproved leasehold expense
|
41,081 | 9,518 | ||||||
Non-cash interest expense
|
4,750 | 6,220 | ||||||
Share-based compensation
|
3,809 | 4,689 | ||||||
Other, net
|
265 | (462 | ) | |||||
Changes in operating assets and liabilities, net
|
2,593 | 30,672 | ||||||
Net cash provided by operating activities from continuing operations
|
63,759 | 45,669 | ||||||
Cash flows from investing activities
|
||||||||
Capital expenditures - property and equipment
|
(211,081 | ) | (168,081 | ) | ||||
Proceeds from the sale of PVG units, net
|
- | 139,120 | ||||||
Proceeds from the sale of property and equipment, net
|
696 | 23,277 | ||||||
Other, net
|
100 | 1,192 | ||||||
Net cash used in investing activities for continuing operations
|
(210,285 | ) | (4,492 | ) | ||||
Cash flows from financing activities
|
||||||||
Dividends paid
|
(5,156 | ) | (5,131 | ) | ||||
Proceeds from the issuance of Senior Notes due 2019
|
300,000 | - | ||||||
Repurchase of Convertible Notes
|
(232,963 | ) | - | |||||
Debt issuance costs paid
|
(6,559 | ) | - | |||||
Proceeds from the sale of PVG units, net
|
- | 199,125 | ||||||
Distributions received from discontinued operations
|
- | 11,218 | ||||||
Other, net
|
974 | 1,844 | ||||||
Net cash provided by financing activities from continuing operations
|
56,296 | 207,056 | ||||||
Cash flows from discontinued operations
|
||||||||
Net cash provided by operating activities
|
- | 77,759 | ||||||
Net cash used in investing activities
|
- | (18,112 | ) | |||||
Net cash used in financing activities
|
- | (59,647 | ) | |||||
Net cash provided by discontinued operations
|
- | - | ||||||
Net increase (decrease) in cash and cash equivalents
|
(90,230 | ) | 248,233 | |||||
Cash and cash equivalents - beginning of period
|
120,911 | 79,017 | ||||||
Cash and cash equivalents - end of period
|
$ | 30,681 | $ | 327,250 | ||||
Supplemental disclosures:
|
||||||||
Cash paid for:
|
||||||||
Interest (net of amounts capitalized)
|
$ | 19,705 | $ | 20,975 | ||||
Income taxes (net of refunds received)
|
$ | (96 | ) | $ | 3,150 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Revenue customers
|
$ | 51,050 | $ | 44,783 | ||||
Joint interest partners
|
16,707 | 23,526 | ||||||
Other
|
314 | 4,442 | ||||||
68,071 | 72,751 | |||||||
Less: Allowance for doubtful accounts
|
(292 | ) | (373 | ) | ||||
$ | 67,779 | $ | 72,378 |
Average
|
|||||||||||||||||||||
Volume Per
|
Weighted Average Price
|
Fair Value
|
|||||||||||||||||||
Instrument
|
Day
|
Floor/Swap
|
Ceiling
|
Asset
|
Liability
|
||||||||||||||||
(in MMBtu)
|
|||||||||||||||||||||
Natural Gas:
|
|||||||||||||||||||||
Third quarter 2011
|
Costless collars
|
30,000 | $ | 4.83 | $ | 6.00 | $ | 1,615 | $ | - | |||||||||||
Fourth quarter 2011
|
Costless collars
|
20,000 | $ | 6.00 | $ | 8.50 | 2,703 | - | |||||||||||||
First quarter 2012
|
Costless collars
|
20,000 | $ | 6.00 | $ | 8.50 | 2,349 | - | |||||||||||||
Third quarter 2011
|
Swaps
|
40,000 | $ | 5.06 | 2,532 | - | |||||||||||||||
Fourth quarter 2011
|
Swaps
|
10,000 | $ | 5.01 | 399 | - | |||||||||||||||
First quarter 2012
|
Swaps
|
10,000 | $ | 5.10 | 250 | - | |||||||||||||||
Second quarter 2012
|
Swaps
|
20,000 | $ | 5.31 | 1,098 | - | |||||||||||||||
Third quarter 2012
|
Swaps
|
20,000 | $ | 5.31 | 935 | - | |||||||||||||||
Fourth quarter 2012
|
Swaps
|
10,000 | $ | 5.10 | 76 | - | |||||||||||||||
Crude Oil:
|
(barrels)
|
||||||||||||||||||||
Third quarter 2011
|
Costless collars
|
360 | $ | 80.00 | $ | 103.30 | - | 24 | |||||||||||||
Fourth quarter 2011
|
Costless collars
|
360 | $ | 80.00 | $ | 103.30 | - | 91 | |||||||||||||
First quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 317 | - | |||||||||||||
Second quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 300 | - | |||||||||||||
Third quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 292 | - | |||||||||||||
Fourth quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 295 | - | |||||||||||||
Third quarter 2011
|
Swaps
|
500 | $ | 109.00 | 591 | - | |||||||||||||||
Fourth quarter 2011
|
Swaps
|
500 | $ | 109.00 | 520 | - | |||||||||||||||
$ | 14,272 | $ | 115 |
Notional
|
Swap Interest Rates 1
|
June 30,
|
December 31,
|
||||||||||||||
Term
|
Amount
|
Pay
|
Receive
|
2011
|
2010
|
||||||||||||
Through June 2013
|
$ | 100,000 |
LIBOR + 8.175%
|
10.375 | % | $ | 2,715 | $ | 2,590 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Impact by contract type:
|
||||||||||||||||
Commodity contracts
|
$ | 5,997 | $ | (2,860 | ) | $ | 7,305 | $ | 25,352 | |||||||
Interest rate contracts
|
1,004 | 2,280 | 1,024 | 3,945 | ||||||||||||
$ | 7,001 | $ | (580 | ) | $ | 8,329 | $ | 29,297 | ||||||||
Realized and unrealized impact:
|
||||||||||||||||
Cash received (paid) for:
|
||||||||||||||||
Commodity contract settlements
|
$ | 4,133 | $ | 8,789 | $ | 10,877 | $ | 17,824 | ||||||||
Interest rate contract settlements
|
898 | 262 | 898 | (340 | ) | |||||||||||
5,031 | 9,051 | 11,775 | 17,484 | |||||||||||||
Unrealized gains (losses) attributable to:
|
||||||||||||||||
Commodity contracts
|
1,864 | (11,649 | ) | (3,572 | ) | 7,528 | ||||||||||
Interest rate contracts
|
106 | 2,018 | 126 | 4,285 | ||||||||||||
1,970 | (9,631 | ) | (3,446 | ) | 11,813 | |||||||||||
$ | 7,001 | $ | (580 | ) | $ | 8,329 | $ | 29,297 |
Fair Values as of
|
||||||||||||||||||
June 30, 2011
|
December 31, 2010
|
|||||||||||||||||
Derivative
|
Derivative
|
Derivative
|
Derivative
|
Derivative
|
||||||||||||||
Instrument
|
Balance Sheet Location
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
|||||||||||||
Interest rate contracts
|
Derivative assets/liabilities - current
|
$ | 1,765 | $ | - | $ | 1,743 | $ | - | |||||||||
Commodity contracts
|
Derivative assets/liabilities - current
|
12,675 | 115 | 15,075 | 388 | |||||||||||||
14,440 | 115 | 16,818 | 388 | |||||||||||||||
Interest rate contracts
|
Derivative assets/liabilities - noncurrent
|
950 | - | 847 | - | |||||||||||||
Commodity contracts
|
Derivative assets/liabilities - noncurrent
|
1,597 | - | 3,042 | - | |||||||||||||
2,547 | - | 3,889 | - | |||||||||||||||
$ | 16,987 | $ | 115 | $ | 20,707 | $ | 388 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Oil and gas properties:
|
||||||||
Proved
|
$ | 2,220,939 | $ | 2,139,894 | ||||
Unproved, net of amortization
|
170,721 | 171,303 | ||||||
Total oil and gas properties
|
2,391,660 | 2,311,197 | ||||||
Other property and equipment
|
16,217 | 15,589 | ||||||
Total property and equipment
|
2,407,877 | 2,326,786 | ||||||
Accumulated depreciation, depletion and amortization
|
(679,756 | ) | (621,202 | ) | ||||
$ | 1,728,121 | $ | 1,705,584 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Revolving credit facility
|
$ | - | $ | - | ||||
Senior notes due 2016, net of discount (principal amount of $300,000)
|
293,009 | 292,487 | ||||||
Senior notes due 2019
|
300,000 | - | ||||||
Convertible notes due 2012, net of discount (principal amount of $4,915 and $230,000)
|
4,659 | 214,049 | ||||||
$ | 597,668 | $ | 506,536 |
Cash paid to repurchase principal:
|
||||
Allocated to liability component
|
$ | 231,331 | ||
Allocated to equity component
|
1,632 | |||
$ | 232,963 | |||
Carrying value of liability component tendered:
|
||||
Principal amount of Convertible Notes tendered
|
$ | 225,085 | ||
Pro rata share of original issue discount
|
(13,429 | ) | ||
$ | 211,656 | |||
Loss on extinguishment of debt:
|
||||
Excess of liability component over carrying value
|
$ | 19,675 | ||
Write-off of pro rata share of debt issuance costs
|
2,147 | |||
Non-cash portion of loss on extinguishment
|
21,822 | |||
Transaction costs and fees paid
|
2,416 | |||
Pre-tax loss on extinguishment
|
$ | 24,238 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Principal
|
$ | 4,915 | $ | 230,000 | ||||
Unamortized discount
|
(256 | ) | (15,951 | ) | ||||
Net carrying amount of liability component
|
$ | 4,659 | $ | 214,049 | ||||
Carrying amount of equity component
|
$ | 35,201 | $ | 36,850 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Contractual interest expense
|
$ | 421 | $ | 2,587 | $ | 3,009 | $ | 5,175 | ||||||||
Accretion of original issue discount
|
318 | 1,817 | 2,265 | 3,609 | ||||||||||||
Amortization of debt issuance costs
|
55 | 310 | 389 | 641 | ||||||||||||
$ | 794 | $ | 4,714 | $ | 5,663 | $ | 9,425 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Other current assets:
|
||||||||
Tubular inventory and well materials
|
$ | 2,256 | $ | 3,600 | ||||
Prepaid expenses
|
1,648 | 633 | ||||||
$ | 3,904 | $ | 4,233 | |||||
Other assets:
|
||||||||
Debt issuance costs
|
$ | 16,749 | $ | 14,300 | ||||
Long-term investments - SERP
|
5,363 | 6,440 | ||||||
Other
|
46 | 47 | ||||||
$ | 22,158 | $ | 20,787 | |||||
Accounts payable and accrued liabilities:
|
||||||||
Trade accounts payable
|
$ | 34,493 | $ | 33,831 | ||||
Drilling costs
|
24,052 | 31,770 | ||||||
Royalties
|
10,413 | 9,308 | ||||||
Production and franchise taxes
|
4,593 | 6,012 | ||||||
Compensation
|
5,100 | 9,631 | ||||||
Interest
|
6,241 | 2,977 | ||||||
Other
|
4,432 | 6,132 | ||||||
$ | 89,324 | $ | 99,661 | |||||
Other liabilities:
|
||||||||
Asset retirement obligation
|
$ | 7,312 | $ | 7,364 | ||||
Pension
|
1,700 | 1,766 | ||||||
Postretirement health care
|
2,978 | 2,976 | ||||||
Deferred compensation
|
5,688 | 6,952 | ||||||
Other
|
900 | 900 | ||||||
$ | 18,578 | $ | 19,958 |
June 30, 2011
|
December 31, 2010
|
|||||||||||||||
Fair
|
Carrying
|
Fair
|
Carrying
|
|||||||||||||
Value
|
Value
|
Value
|
Value
|
|||||||||||||
10.375% Senior Notes due 2016
|
$ | 330,000 | $ | 293,009 | $ | 335,712 | $ | 292,487 | ||||||||
7.25% Senior Notes due 2019
|
289,500 | 300,000 | - | - | ||||||||||||
4.50% Convertible Notes due 2012
|
5,047 | 4,659 | 225,975 | 214,049 | ||||||||||||
$ | 624,547 | $ | 597,668 | $ | 561,687 | $ | 506,536 |
June 30, 2011
|
||||||||||||||||
Fair Value
|
Fair Value Measurement Classification
|
|||||||||||||||
Description
|
Measurement
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Publicly traded equity securities
|
$ | 5,363 | $ | 5,363 | $ | - | $ | - | ||||||||
Interest rate swap assets - current
|
1,765 | - | 1,765 | - | ||||||||||||
Interest rate swap assets - noncurrent
|
950 | - | 950 | - | ||||||||||||
Commodity derivative assets - current
|
12,675 | - | 12,675 | - | ||||||||||||
Commodity derivative assets - noncurrent
|
1,597 | - | 1,597 | - | ||||||||||||
Liabilities:
|
||||||||||||||||
Deferred compensation - noncurrent liability
|
(5,685 | ) | (5,685 | ) | - | - | ||||||||||
Commodity derivative liabilities - current
|
(115 | ) | - | (115 | ) | - | ||||||||||
Totals
|
$ | 16,550 | $ | (322 | ) | $ | 16,872 | $ | - |
December 31, 2010
|
||||||||||||||||
Fair Value
|
Fair Value Measurement Classification
|
|||||||||||||||
Description
|
Measurement
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets:
|
||||||||||||||||
Publicly traded equity securities
|
$ | 6,440 | $ | 6,440 | $ | - | $ | - | ||||||||
Interest rate swap assets - current
|
1,743 | - | 1,743 | - | ||||||||||||
Interest rate swap assets - noncurrent
|
847 | - | 847 | - | ||||||||||||
Commodity derivative assets - current
|
15,075 | - | 15,075 | - | ||||||||||||
Commodity derivative assets - noncurrent
|
3,042 | - | 3,042 | - | ||||||||||||
Liabilities:
|
||||||||||||||||
Deferred compensation - noncurrent liability
|
(6,948 | ) | (6,948 | ) | - | - | ||||||||||
Commodity derivative liabilities - current
|
(388 | ) | - | (388 | ) | - | ||||||||||
Totals
|
$ | 19,811 | $ | (508 | ) | $ | 20,319 | $ | - |
|
•
|
Publicly traded equity securities: We hold various publicly traded equity securities as assets for funding certain deferred compensation obligations. The fair values are based on quoted market prices, which are level 1 inputs.
|
|
•
|
Commodity derivatives: We determine the fair values of our oil and gas derivative instruments based on discounted cash flows derived from third-party quoted forward prices for NYMEX Henry Hub natural gas and West Texas Intermediate crude oil closing prices as of the end of the reporting periods. We generally use the income approach, using valuation techniques that convert future cash flows to a single discounted value. Each of these is a level 2 input.
|
|
•
|
Interest rate swaps: We determine the fair values of our interest rate swaps using an income approach valuation technique that connects future cash flows to a single discounted value. We estimate the fair value of the swaps based on published interest rate yield curves as of the date of the estimate. Each of these is a level 2 input.
|
|
•
|
Deferred compensation: Certain of our deferred compensation obligations are ultimately to be settled in cash based on the underlying fair value of certain publicly traded equity securities. The fair values of these obligations are based on quoted market prices, which are level 1 inputs.
|
Penn Virginia
|
Noncontrolling
|
|||||||||||||||
Corporation
|
Interests in
|
Total
|
||||||||||||||
Shareholders'
|
Discontinued
|
Shareholders'
|
Comprehensive
|
|||||||||||||
Equity
|
Operations
|
Equity
|
Income (Loss)
|
|||||||||||||
Balance as of December 31, 2010
|
$ | 980,276 | $ | - | $ | 980,276 | ||||||||||
Dividends paid ($0.1125 per share)
|
(5,156 | ) | - | (5,156 | ) | |||||||||||
Other changes to shareholders' equity
|
4,677 | - | 4,677 | |||||||||||||
Comprehensive income:
|
||||||||||||||||
Net loss
|
(98,258 | ) | - | (98,258 | ) | $ | (98,258 | ) | ||||||||
Other, net of tax
|
68 | - | 68 | 68 | ||||||||||||
Balance as of June 30, 2011
|
$ | 881,607 | $ | - | $ | 881,607 | $ | (98,190 | ) | |||||||
Balance as of December 31, 2009
|
$ | 908,088 | $ | 329,911 | $ | 1,237,999 | ||||||||||
Dividends paid ($0.1125 per share)
|
(5,131 | ) | - | (5,131 | ) | |||||||||||
Distributions to noncontrolling interest holders
|
- | (49,566 | ) | (49,566 | ) | |||||||||||
Sale of PVG units, net of tax
|
82,102 | 70,188 | 152,290 | |||||||||||||
Deconsolidation of PVG
|
- | (382,324 | ) | (382,324 | ) | |||||||||||
Other changes to shareholders' equity
|
5,286 | 3,119 | 8,405 | |||||||||||||
Comprehensive income:
|
||||||||||||||||
Net income
|
44,673 | 28,090 | 72,763 | $ | 72,763 | |||||||||||
Hedging reclassification adjustment
|
- | 582 | 582 | 582 | ||||||||||||
Other, net of tax
|
(204 | ) | - | (204 | ) | (204 | ) | |||||||||
Balance as of June 30, 2010
|
$ | 1,034,814 | $ | - | $ | 1,034,814 | $ | 73,141 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Stock option plans
|
$ | 1,379 | $ | 1,276 | $ | 2,787 | $ | 3,385 | ||||||||
Common, deferred and restricted stock and restricted stock unit plans
|
634 | 392 | 1,022 | 1,304 | ||||||||||||
$ | 2,013 | $ | 1,668 | $ | 3,809 | $ | 4,689 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Termination benefits
|
$ | - | $ | 5 | $ | - | $ | 867 | ||||||||
Employee and office relocation costs
|
52 | 515 | 70 | 675 | ||||||||||||
Other incremental costs
|
- | 150 | - | 605 | ||||||||||||
Lease assignment charge
|
- | 3,500 | - | 3,500 | ||||||||||||
$ | 52 | $ | 4,170 | $ | 70 | $ | 5,647 |
2011
|
2010
|
|||||||
Balance at beginning of period
|
$ | 64 | $ | 529 | ||||
Termination benefits accrued
|
- | 867 | ||||||
Cash payments
|
(64 | ) | (1,396 | ) | ||||
Balance at end of period
|
$ | - | $ | - |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Oil and gas properties
|
$ | 71,071 | $ | - | $ | 71,071 | $ | - | ||||||||
Other
|
- | 1,124 | - | 1,124 | ||||||||||||
$ | 71,071 | $ | 1,124 | $ | 71,071 | $ | 1,124 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest on borrowings and related fees
|
$ | 13,120 | $ | 10,709 | $ | 23,867 | $ | 21,487 | ||||||||
Accretion on original issue discount
|
583 | 2,001 | 2,788 | 4,111 | ||||||||||||
Amortization of debt issuance costs
|
895 | 964 | 1,962 | 2,109 | ||||||||||||
Capitalized interest
|
(455 | ) | (355 | ) | (990 | ) | (717 | ) | ||||||||
Other, net
|
- | 2 | - | 2 | ||||||||||||
$ | 14,143 | $ | 13,321 | $ | 27,627 | $ | 26,992 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Loss from continuing operations
|
$ | (71,918 | ) | $ | (21,097 | ) | $ | (98,258 | ) | $ | (10,331 | ) | ||||
Income from discontinued operations, net of tax 1
|
- | 21,308 | - | 33,482 | ||||||||||||
Gain on sale of dicontinued operations
|
- | 49,612 | - | 49,612 | ||||||||||||
Less: Net income attributable to noncontrolling interests
|
- | (18,744 | ) | - | (28,090 | ) | ||||||||||
Net income (loss) attributable to common shareholders
|
$ | (71,918 | ) | $ | 31,079 | $ | (98,258 | ) | $ | 44,673 | ||||||
Less: Portion of subsidiary net income allocated to undistributed share-basd compensation awards, net of tax
|
- | - | - | (28 | ) | |||||||||||
$ | (71,918 | ) | $ | 31,079 | $ | (98,258 | ) | $ | 44,645 | |||||||
Weighted-average shares, basic
|
45,768 | 45,539 | 45,724 | 45,508 | ||||||||||||
Effect of dilutive securities 2
|
- | 251 | - | 259 | ||||||||||||
Weighted-average shares, diluted
|
45,768 | 45,790 | 45,724 | 45,767 |
1
|
For purposes of determining earnings per share, net income attributable to noncontrolling interests, which is fully attributable to PVG's operations, is applied against income from discontinued operations.
|
2
|
For both the three and six months ended June 30, 2011, approximately 0.1 million potentially dilutive securities, including the Convertible Notes, stock options, restricted stock and restricted stock units, had the effect of being anti-dilutive and were excluded from the calculation of diluted earnings per common share.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenues
|
$ | - | $ | 115,573 | $ | - | $ | 303,206 | ||||||||
Income from discontinued operations before taxes
|
$ | - | $ | 22,877 | $ | - | $ | 36,832 | ||||||||
Income tax expense 1
|
- | (1,569 | ) | - | (3,350 | ) | ||||||||||
Income from discontinued operations, net of taxes
|
$ | - | $ | 21,308 | $ | - | $ | 33,482 |
|
•
|
the volatility of commodity prices for natural gas, natural gas liquids and oil;
|
|
•
|
our ability to develop, explore for, acquire and replace oil and gas reserves and sustain production;
|
|
•
|
any impairments, write-downs or write-offs of our reserves or assets;
|
|
•
|
the projected demand for and supply of natural gas, natural gas liquids and oil;
|
|
•
|
reductions in the borrowing base under our revolving credit facility;
|
|
•
|
our ability to contract for drilling rigs, supplies and services at reasonable costs;
|
|
•
|
our ability to obtain adequate pipeline transportation capacity for our oil and gas production at reasonable costs and to sell the production at, or at reasonable discounts to, market prices;
|
|
•
|
the uncertainties inherent in projecting future rates of production for our wells and the extent to which actual production differs from estimated proved oil and gas reserves;
|
|
•
|
drilling and operating risks;
|
|
•
|
our ability to compete effectively against other independent and major oil and natural gas companies;
|
|
•
|
uncertainties related to expected benefits from acquisitions of oil and natural gas properties;
|
|
•
|
environmental liabilities that are not covered by an effective indemnity or insurance;
|
|
•
|
the timing of receipt of necessary regulatory permits;
|
|
•
|
the effect of commodity and financial derivative arrangements;
|
|
•
|
our ability to maintain adequate financial liquidity and to access adequate levels of capital on reasonable terms;
|
|
•
|
the occurrence of unusual weather or operating conditions, including force majeure events;
|
|
•
|
our ability to retain or attract senior management and key technical employees;
|
|
•
|
counterparty risk related to their ability to meet their future obligations;
|
|
•
|
changes in governmental regulations or enforcement practices, especially with respect to environmental, health and safety matters;
|
|
•
|
uncertainties relating to general domestic and international economic and political conditions; and
|
|
•
|
other risks set forth in our Annual Report on Form 10-K for the year ended December 31, 2010.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Total production (MMcfe)
|
11,699 | 10,475 | 23,870 | 20,813 | ||||||||||||
Daily production (MMcfe per day)
|
128.6 | 115.1 | 131.9 | 115.0 | ||||||||||||
Realized prices per Mcfe, as reported
|
$ | 6.24 | $ | 5.00 | $ | 5.89 | $ | 5.72 | ||||||||
Realized prices per Mcfe, adjusted for derivatives
|
$ | 6.59 | $ | 5.84 | $ | 6.35 | $ | 6.58 | ||||||||
Product revenues, as reported
|
$ | 73,009 | $ | 52,356 | $ | 140,702 | $ | 119,056 | ||||||||
Product revenues, as adjusted for derivatives
|
$ | 77,142 | $ | 61,145 | $ | 151,579 | $ | 136,881 | ||||||||
Operating loss
|
$ | (80,713 | ) | $ | (20,878 | ) | $ | (109,242 | ) | $ | (20,786 | ) | ||||
Interest expense
|
$ | 14,143 | $ | 13,321 | $ | 27,627 | $ | 26,992 | ||||||||
Cash provided by operating activities
|
$ | 34,323 | $ | 14,924 | $ | 63,759 | $ | 45,669 | ||||||||
Cash paid for capital expenditures
|
$ | 110,352 | $ | 103,589 | $ | 211,081 | $ | 168,081 | ||||||||
Cash and cash equivalents at end of period
|
$ | 30,681 | $ | 327,250 | ||||||||||||
Debt outstanding, net of discounts, at end of period
|
$ | 597,668 | $ | 500,537 | ||||||||||||
Credit available under revolving credit facility at end of period 1
|
$ | 160,730 | $ | 299,268 | ||||||||||||
Net development wells drilled
|
12.0 | 13.1 | 14.4 | 20.8 | ||||||||||||
Net exploratory wells drilled
|
1.1 | - | 6.4 | 1.0 |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Total Production:
|
||||||||||||||||
Natural gas (MMcf)
|
8,869 | 9,132 | (264 | ) | (3 | )% | ||||||||||
Crude oil (MBbl)
|
219 | 148 | 71 | 48 | % | |||||||||||
NGL (MBbl)
|
253 | 76 | 177 | 232 | % | |||||||||||
Total production (MMcfe)
|
11,699 | 10,475 | 1,224 | 12 | % | |||||||||||
Realized prices, before derivatives:
|
||||||||||||||||
Natural gas ($/Mcf)
|
$ | 4.32 | $ | 4.25 | $ | 0.07 | 2 | % | ||||||||
Crude oil ($/Bbl)
|
98.45 | 73.64 | 24.81 | 34 | % | |||||||||||
NGL ($/Bbl)
|
52.04 | 34.97 | 17.08 | 49 | % | |||||||||||
Total ($/Mcfe)
|
$ | 6.24 | $ | 5.00 | $ | 1.24 | 25 | % | ||||||||
Revenues
|
||||||||||||||||
Natural gas
|
$ | 38,300 | $ | 38,819 | $ | (519 | ) | (1 | )% | |||||||
Crude oil
|
21,548 | 10,875 | 10,673 | 98 | % | |||||||||||
NGL
|
13,161 | 2,662 | 10,499 | 394 | % | |||||||||||
Total product revenues
|
73,009 | 52,356 | 20,653 | 39 | % | |||||||||||
Gain (loss) on sale of property and equipment
|
(28 | ) | 125 | (153 | ) | (122 | )% | |||||||||
Other income
|
637 | 807 | (170 | ) | (21 | )% | ||||||||||
Total revenues
|
73,618 | 53,288 | 20,330 | 38 | % | |||||||||||
Operating Expenses
|
||||||||||||||||
Lease operating
|
10,787 | 9,155 | (1,632 | ) | (18 | )% | ||||||||||
Gathering, processing and transportation
|
4,281 | 3,309 | (972 | ) | (29 | )% | ||||||||||
Production and ad valorem taxes
|
2,834 | 3,105 | 271 | 9 | % | |||||||||||
General and administrative
|
12,954 | 15,827 | 2,873 | 18 | % | |||||||||||
Exploration
|
19,368 | 9,541 | (9,827 | ) | (103 | )% | ||||||||||
Depreciation, depletion and amortization
|
33,036 | 32,105 | (931 | ) | (3 | )% | ||||||||||
Impairments
|
71,071 | 1,124 | (69,947 | ) |
NM
|
|||||||||||
Total operating expenses
|
154,331 | 74,166 | (80,165 | ) | (108 | )% | ||||||||||
Operating loss
|
(80,713 | ) | (20,878 | ) | (59,835 | ) | (287 | )% | ||||||||
Other income (expense)
|
||||||||||||||||
Interest expense
|
(14,143 | ) | (13,321 | ) | (822 | ) | (6 | )% | ||||||||
Loss on extinguishment of debt
|
(24,238 | ) | - | (24,238 | ) |
NM
|
||||||||||
Derivatives
|
7,001 | (580 | ) | 7,581 |
NM
|
|||||||||||
Other
|
129 | 517 | (388 | ) | (75 | )% | ||||||||||
Loss from continuing operations before income taxes
|
(111,964 | ) | (34,262 | ) | (77,702 | ) | (227 | )% | ||||||||
Income tax benefit
|
40,046 | 13,165 | 26,881 | 204 | % | |||||||||||
Loss from continuing operations
|
(71,918 | ) | (21,097 | ) | (50,821 | ) | (241 | )% | ||||||||
Income from discontinued operations, net of tax
|
- | 21,308 | (21,308 | ) |
NM
|
|||||||||||
Gain on sale of discontinued operations
|
- | 49,612 | (49,612 | ) |
NM
|
|||||||||||
Net income (loss)
|
(71,918 | ) | 49,823 | (121,741 | ) | (244 | )% | |||||||||
Less net income attributable to noncontrolling interests
|
- | (18,744 | ) | 18,744 |
NM
|
|||||||||||
Income (loss) attributable to Penn Virginia Corporation
|
$ | (71,918 | ) | $ | 31,079 | $ | (102,997 | ) | (331 | )% |
Three Months Ended June 30,
|
Favorable
|
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||||||||||||
2011
|
2010
|
(Unfavorable)
|
2011
|
2010
|
(Unfavorable)
|
% Change
|
||||||||||||||||||||||
(MMcfe)
|
(MMcfe per day)
|
|||||||||||||||||||||||||||
Texas
|
4,224 | 2,618 | 1,606 | 46.4 | 28.8 | 17.7 | 61 | % | ||||||||||||||||||||
Appalachia
|
2,251 | 2,591 | (340 | ) | 24.7 | 28.5 | (3.7 | ) | (13 | )% | ||||||||||||||||||
Mid-Continent
|
3,527 | 3,502 | 25 | 38.8 | 38.5 | 0.3 | 1 | % | ||||||||||||||||||||
Mississippi
|
1,697 | 1,764 | (67 | ) | 18.6 | 19.4 | (0.7 | ) | (4 | )% | ||||||||||||||||||
Total production
|
11,699 | 10,475 | 1,224 | 128.6 | 115.1 | 13.5 | 12 | % |
Three Months Ended June 30,
|
Favorable
|
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||||||||
2011
|
2010
|
(Unfavorable)
|
2011
|
2010
|
(Unfavorable)
|
|||||||||||||||||||
($ per Mcfe)
|
||||||||||||||||||||||||
Texas
|
$ | 30,860 | $ | 12,390 | $ | 18,470 | $ | 7.31 | $ | 4.73 | $ | 2.57 | ||||||||||||
Appalachia
|
9,769 | 10,583 | (814 | ) | 4.34 | 4.08 | 0.25 | |||||||||||||||||
Mid-Continent
|
24,292 | 21,763 | 2,529 | 6.89 | 6.21 | 0.67 | ||||||||||||||||||
Mississippi
|
8,088 | 7,620 | 468 | 4.77 | 4.32 | 0.45 | ||||||||||||||||||
Total revenues
|
$ | 73,009 | $ | 52,356 | $ | 20,653 | $ | 6.24 | $ | 5.00 | $ | 1.24 |
Revenue Variance Due to
|
||||||||||||
Volume
|
Price
|
Total
|
||||||||||
Natural gas
|
$ | (1,120 | ) | $ | 601 | $ | (519 | ) | ||||
Crude oil
|
5,243 | 5,430 | 10,673 | |||||||||
NGL
|
6,181 | 4,318 | 10,499 | |||||||||
$ | 10,304 | $ | 10,350 | $ | 20,653 |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Natural gas revenues as reported
|
$ | 38,300 | $ | 38,819 | $ | (519 | ) | (1 | )% | |||||||
Cash settlements on natural gas derivatives, net
|
4,261 | 9,038 | (4,777 | ) | (53 | )% | ||||||||||
Natural gas revenues adjusted for derivatives
|
$ | 42,561 | $ | 47,857 | $ | (5,296 | ) | (11 | )% | |||||||
Natural gas prices per Mcf, as reported
|
$ | 4.32 | $ | 4.25 | $ | 0.07 | 2 | % | ||||||||
Cash settlements on natural gas derivatives per Mcf
|
0.48 | 0.99 | (0.51 | ) | (51 | )% | ||||||||||
Natural gas prices per Mcf adjusted for derivatives
|
$ | 4.80 | $ | 5.24 | $ | (0.44 | ) | (8 | )% | |||||||
Crude oil revenues as reported
|
$ | 21,548 | $ | 10,875 | $ | 10,673 | 98 | % | ||||||||
Cash settlements on crude oil derivatives, net
|
(128 | ) | (249 | ) | 121 | 49 | % | |||||||||
Crude oil revenues adjusted for derivatives
|
$ | 21,420 | $ | 10,626 | $ | 10,794 | 102 | % | ||||||||
Crude oil prices per Bbl, as reported
|
$ | 98.45 | $ | 73.64 | $ | 24.81 | 34 | % | ||||||||
Cash settlements on crude oil derivatives per Bbl
|
(0.58 | ) | (1.68 | ) | 1.10 | 65 | % | |||||||||
Crude oil prices per Bbl adjusted for derivatives
|
$ | 97.87 | $ | 71.96 | $ | 25.91 | 36 | % |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Lease operating
|
$ | 0.92 | $ | 0.87 | $ | (0.05 | ) | (5 | )% | |||||||
Gathering, processing and transportation
|
0.37 | 0.32 | (0.05 | ) | (16 | )% | ||||||||||
Production and ad valorem taxes
|
0.24 | 0.30 | 0.06 | 19 | % | |||||||||||
General and administrative
|
1.11 | 1.51 | 0.40 | 27 | % | |||||||||||
General and administrative excluding share-based
|
||||||||||||||||
compensation and restructuring charges
|
0.93 | 0.95 | 0.02 | 2 | % | |||||||||||
Depreciation, depletion and amortization
|
2.82 | 3.06 | 0.24 | 8 | % |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Recurring general and administrative expenses
|
$ | 10,889 | $ | 9,989 | $ | (900 | ) | (9 | )% | |||||||
Share-based compensation
|
2,013 | 1,668 | (345 | ) | (21 | )% | ||||||||||
Restructuring expenses
|
52 | 4,170 | 4,118 | 99 | % | |||||||||||
$ | 12,954 | $ | 15,827 | $ | 2,873 | 18 | % |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Dry hole costs
|
$ | 2,116 | $ | - | $ | (2,116 | ) |
NM
|
||||||||
Geological and geophysical
|
4,302 | 4,065 | (237 | ) | (6 | )% | ||||||||||
Unproved leasehold
|
11,966 | 4,435 | (7,531 | ) | (170 | )% | ||||||||||
Other, primarily delay rentals
|
984 | 1,041 | 57 | 5 | % | |||||||||||
$ | 19,368 | $ | 9,541 | $ | (9,827 | ) | (103 | )% |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Depletion
|
$ | 31,606 | $ | 30,279 | $ | (1,327 | ) | (4 | )% | |||||||
Depreciation - Oil and gas operations
|
619 | 645 | 26 | 4 | % | |||||||||||
Depreciation - Corporate
|
679 | 1,070 | 391 | 37 | % | |||||||||||
Amortization
|
132 | 111 | (21 | ) | (19 | )% | ||||||||||
$ | 33,036 | $ | 32,105 | $ | (931 | ) | (3 | )% |
DD&A Variance Due to
|
||||||||||||
Production
|
Rates
|
Total
|
||||||||||
Three months ended June 30, 2011 compared to 2010
|
$ | (3,752 | ) | $ | 2,821 | $ | (931 | ) |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Oil and gas properties
|
$ | 71,071 | $ | - | $ | (71,071 | ) |
NM
|
||||||||
Other
|
- | 1,124 | 1,124 |
NM
|
||||||||||||
$ | 71,071 | $ | 1,124 | $ | (69,947 | ) |
NM
|
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Interest on borrowings and related fees
|
$ | 13,120 | $ | 10,709 | $ | (2,411 | ) | (23 | )% | |||||||
Accretion of original issue discount
|
583 | 2,001 | 1,506 | 75 | % | |||||||||||
Amortization of debt issuance costs
|
895 | 964 | (19 | ) | (2 | )% | ||||||||||
Capitalized interest
|
(455 | ) | (355 | ) | 100 | 28 | % | |||||||||
Other, net
|
- | 2 | 2 |
NM
|
||||||||||||
$ | 14,143 | $ | 13,321 | $ | (822 | ) | (6 | )% |
Three Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Oil and gas derivative unrealized derivative gain (loss)
|
$ | 1,864 | $ | (11,649 | ) | $ | 13,513 | 116 | % | |||||||
Oil and gas derivative realized gain
|
4,133 | 8,789 | (4,656 | ) | (53 | )% | ||||||||||
Interest rate swap unrealized gain
|
106 | 2,018 | (1,912 | ) | (95 | )% | ||||||||||
Interest rate swap realized gain
|
898 | 262 | 636 | 243 | % | |||||||||||
$ | 7,001 | $ | (580 | ) | $ | 7,581 |
(1307
|
)% |
Three Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Revenues
|
$ | - | $ | 115,573 | ||||
Income from discontinued operations before taxes
|
$ | - | $ | 22,877 | ||||
Income tax expense 1
|
- | (1,569 | ) | |||||
$ | - | $ | 21,308 |
1
|
Determined by applying the effective tax rate attributable to discontinued operations to the income from discontinued operations less noncontrolling interests that are fully attributable to PVG's operations.
|
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Total Production:
|
||||||||||||||||
Natural gas (MMcf)
|
18,594 | 17,700 | 894 | 5 | % | |||||||||||
Crude oil (MBbl)
|
407 | 334 | 73 | 22 | % | |||||||||||
NGL (MBbl)
|
473 | 185 | 288 | 155 | % | |||||||||||
Total production (MMcfe)
|
23,870 | 20,813 | 3,058 | 15 | % | |||||||||||
Realized prices, before derivatives:
|
||||||||||||||||
Natural gas ($/Mcf)
|
$ | 4.27 | $ | 4.90 | $ | (0.63 | ) | (13 | )% | |||||||
Crude oil ($/Bbl)
|
93.80 | 74.09 | 19.71 | 27 | % | |||||||||||
NGL ($/Bbl)
|
48.82 | 40.66 | 8.16 | 20 | % | |||||||||||
Total ($/Mcfe)
|
$ | 5.89 | $ | 5.72 | $ | 0.17 | 3 | % | ||||||||
Revenues
|
||||||||||||||||
Natural gas
|
$ | 79,489 | $ | 86,807 | $ | (7,318 | ) | (8 | )% | |||||||
Crude oil
|
38,131 | 24,721 | 13,410 | 54 | % | |||||||||||
NGL
|
23,082 | 7,528 | 15,554 | 207 | % | |||||||||||
Total product revenues
|
140,702 | 119,056 | 21,646 | 18 | % | |||||||||||
Gain on sale of property and equipment
|
452 | 336 | 116 | 35 | % | |||||||||||
Other income
|
1,047 | 1,774 | (727 | ) | (41 | )% | ||||||||||
Total revenues
|
142,201 | 121,166 | 21,035 | 17 | % | |||||||||||
Operating Expenses
|
||||||||||||||||
Lease operating
|
21,064 | 17,892 | (3,172 | ) | (18 | )% | ||||||||||
Gathering, processing and transportation
|
8,309 | 6,540 | (1,769 | ) | (27 | )% | ||||||||||
Production and ad valorem taxes
|
7,898 | 7,375 | (523 | ) | (7 | )% | ||||||||||
General and administrative
|
26,306 | 30,852 | 4,546 | 15 | % | |||||||||||
Exploration
|
48,916 | 15,570 | (33,346 | ) | (214 | )% | ||||||||||
Depreciation, depletion and amortization
|
67,879 | 62,134 | (5,745 | ) | (9 | )% | ||||||||||
Impairments
|
71,071 | 1,124 | (69,947 | ) |
NM
|
|||||||||||
Other
|
- | 465 | 465 | 100 | % | |||||||||||
Total operating expenses
|
251,443 | 141,952 | (109,491 | ) | (77 | )% | ||||||||||
Operating loss
|
(109,242 | ) | (20,786 | ) | (88,456 | ) | (426 | )% | ||||||||
Other income (expense)
|
||||||||||||||||
Interest expense
|
(27,627 | ) | (26,992 | ) | (635 | ) | (2 | )% | ||||||||
Loss on extinguishment of debt
|
(24,238 | ) | - | (24,238 | ) |
NM
|
||||||||||
Derivatives
|
8,329 | 29,297 | (20,968 | ) | (72 | )% | ||||||||||
Other
|
273 | 1,763 | (1,490 | ) | (85 | )% | ||||||||||
Loss from continuing operations before income taxes
|
(152,505 | ) | (16,718 | ) | (135,787 | ) | (812 | )% | ||||||||
Income tax benefit
|
54,247 | 6,387 | 47,860 | 749 | % | |||||||||||
Loss from continuing operations
|
(98,258 | ) | (10,331 | ) | (87,927 | ) | (851 | )% | ||||||||
Income from discontinued operations, net of tax
|
- | 33,482 | (33,482 | ) |
NM
|
|||||||||||
Gain on sale of discontinued operations
|
- | 49,612 | (49,612 | ) |
NM
|
|||||||||||
Net income (loss)
|
(98,258 | ) | 72,763 | (171,021 | ) | (235 | )% | |||||||||
Less net income attributable to noncontrolling interests
|
- | (28,090 | ) | 28,090 |
NM
|
|||||||||||
Income (loss) attributable to Penn Virginia Corporation
|
$ | (98,258 | ) | $ | 44,673 | $ | (142,931 | ) | (320 | )% |
Six Months Ended June 30,
|
Favorable
|
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||||||||||||
2011
|
2010
|
(Unfavorable)
|
2011
|
2010
|
(Unfavorable)
|
% Change
|
||||||||||||||||||||||
(MMcfe)
|
(MMcfe per day)
|
|||||||||||||||||||||||||||
Texas
|
8,050 | 5,201 | 2,849 | 44.5 | 28.7 | 15.7 | 55 | % | ||||||||||||||||||||
Appalachia
|
4,615 | 5,187 | (572 | ) | 25.5 | 28.7 | (3.2 | ) | (11 | )% | ||||||||||||||||||
Mid-Continent
|
7,648 | 6,714 | 934 | 42.3 | 37.1 | 5.2 | 14 | % | ||||||||||||||||||||
Mississippi
|
3,557 | 3,416 | 141 | 19.7 | 18.9 | 0.8 | 4 | % | ||||||||||||||||||||
Gulf Coast (Divested)
|
- | 295 | (295 | ) | - | 1.6 | (1.6 | ) | (100 | )% | ||||||||||||||||||
Total production
|
23,870 | 20,813 | 3,057 | 131.9 | 115.0 | 16.9 | 15 | % |
Six Months Ended June 30,
|
Favorable
|
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||||||||
2011
|
2010
|
(Unfavorable)
|
2011
|
2010
|
(Unfavorable)
|
|||||||||||||||||||
($ per Mcfe)
|
||||||||||||||||||||||||
Texas
|
$ | 51,926 | $ | 28,407 | $ | 23,519 | $ | 6.45 | $ | 5.46 | $ | 0.99 | ||||||||||||
Appalachia
|
19,589 | 24,608 | (5,019 | ) | 4.24 | 4.74 | (0.50 | ) | ||||||||||||||||
Mid-Continent
|
52,899 | 47,082 | 5,817 | 6.92 | 7.01 | (0.09 | ) | |||||||||||||||||
Mississippi
|
16,288 | 16,783 | (495 | ) | 4.58 | 4.91 | (0.33 | ) | ||||||||||||||||
Gulf Coast (Divested)
|
- | 2,176 | (2,176 | ) | - | 7.38 | (7.38 | ) | ||||||||||||||||
Total revenues
|
$ | 140,702 | $ | 119,056 | $ | 21,646 | $ | 5.89 | $ | 5.72 | $ | 0.17 |
Revenue Variance Due to
|
||||||||||||
Volume
|
Price
|
Total
|
||||||||||
Natural gas
|
$ | 4,386 | $ | (11,704 | ) | $ | (7,318 | ) | ||||
Crude oil
|
5,397 | 8,013 | 13,410 | |||||||||
NGL
|
11,698 | 3,856 | 15,554 | |||||||||
$ | 21,481 | $ | 165 | $ | 21,646 |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Natural gas revenues as reported
|
$ | 79,489 | $ | 86,807 | $ | (7,318 | ) | (8 | )% | |||||||
Cash settlements on natural gas derivatives, net
|
11,230 | 17,927 | (6,697 | ) | (37 | )% | ||||||||||
Natural gas revenues adjusted for derivatives
|
$ | 90,719 | $ | 104,734 | $ | (14,015 | ) | (13 | )% | |||||||
Natural gas prices per Mcf, as reported
|
$ | 4.27 | $ | 4.90 | $ | (0.63 | ) | (13 | )% | |||||||
Cash settlements on natural gas derivatives per Mcf
|
0.61 | 1.02 | (0.41 | ) | (40 | )% | ||||||||||
Natural gas prices per Mcf adjusted for derivatives
|
$ | 4.88 | $ | 5.92 | $ | (1.04 | ) | (18 | )% | |||||||
Crude oil revenues as reported
|
$ | 38,131 | $ | 24,721 | $ | 13,410 | 54 | % | ||||||||
Cash settlements on crude oil derivatives, net
|
(353 | ) | (102 | ) | (251 | ) | (246 | )% | ||||||||
Crude oil revenues adjusted for derivatives
|
$ | 37,778 | $ | 24,619 | $ | 13,159 | 53 | % | ||||||||
Crude oil prices per Bbl, as reported
|
$ | 93.80 | $ | 74.09 | $ | 19.71 | 27 | % | ||||||||
Cash settlements on crude oil derivatives per Bbl
|
(0.87 | ) | (0.31 | ) | (0.56 | ) | (184 | )% | ||||||||
Crude oil prices per Bbl adjusted for derivatives
|
$ | 92.93 | $ | 73.78 | $ | 19.15 | 26 | % |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Lease operating
|
$ | 0.88 | $ | 0.86 | $ | (0.02 | ) | (3 | )% | |||||||
Gathering, processing and transportation
|
0.35 | 0.31 | (0.04 | ) | (11 | )% | ||||||||||
Production and ad valorem taxes
|
0.33 | 0.35 | 0.02 | 7 | % | |||||||||||
General and administrative
|
1.10 | 1.48 | 0.38 | 26 | % | |||||||||||
General and administrative excluding share-based
|
||||||||||||||||
compensation and restructuring charges
|
0.94 | 0.99 | 0.05 | 5 | % | |||||||||||
Depreciation, depletion and amortization
|
2.84 | 2.99 | 0.15 | 5 | % |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Recurring general and administrative expenses
|
$ | 22,427 | $ | 20,516 | $ | (1,911 | ) | (9 | )% | |||||||
Share-based compensation
|
3,809 | 4,689 | 880 | 19 | % | |||||||||||
Restructuring expenses
|
70 | 5,647 | 5,577 | 99 | % | |||||||||||
$ | 26,306 | $ | 30,852 | $ | 4,546 | 15 | % |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Dry hole costs
|
$ | 18,524 | $ | 27 | $ | (18,497 | ) |
NM
|
||||||||
Geological and geophysical
|
6,137 | 4,485 | (1,652 | ) | (37 | )% | ||||||||||
Unproved leasehold
|
22,557 | 9,491 | (13,066 | ) | (138 | )% | ||||||||||
Other, primarily delay rentals
|
1,698 | 1,567 | (131 | ) | (8 | )% | ||||||||||
$ | 48,916 | $ | 15,570 | $ | (33,346 | ) | (214 | )% |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Depletion
|
$ | 65,049 | $ | 58,544 | $ | (6,505 | ) | (11 | )% | |||||||
Depreciation - Oil and gas operations
|
1,237 | 1,292 | 55 | 4 | % | |||||||||||
Depreciation - Corporate
|
1,331 | 2,077 | 746 | 36 | % | |||||||||||
Amortization
|
262 | 221 | (41 | ) | (19 | )% | ||||||||||
$ | 67,879 | $ | 62,134 | $ | (5,745 | ) | (9 | )% |
DD&A Variance Due to
|
||||||||||||
Production
|
Rates
|
Total
|
||||||||||
Six months ended June 30, 2011 compared to 2010
|
$ | (9,128 | ) | $ | 3,383 | $ | (5,745 | ) |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Oil and gas properties
|
$ | 71,071 | $ | - | $ | (71,071 | ) |
NM
|
||||||||
Other
|
- | 1,124 | 1,124 |
NM
|
||||||||||||
$ | 71,071 | $ | 1,124 | $ | (69,947 | ) |
NM
|
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Interest on borrowings and related fees
|
$ | 23,867 | $ | 21,487 | $ | (2,380 | ) | (11 | )% | |||||||
Accretion of original issue discount
|
2,788 | 4,111 | 1,411 | 34 | % | |||||||||||
Amortization of debt issuance costs
|
1,962 | 2,109 | 59 | 3 | % | |||||||||||
Capitalized interest
|
(990 | ) | (717 | ) | 273 | 38 | % | |||||||||
Other, net
|
- | 2 | 2 | (100 | )% | |||||||||||
$ | 27,627 | $ | 26,992 | $ | (635 | ) | (2 | )% |
Six Months Ended June 30,
|
Favorable
|
|||||||||||||||
2011
|
2010
|
(Unfavorable)
|
% Change
|
|||||||||||||
Oil and gas derivative unrealized derivative gain (loss)
|
$ | (3,572 | ) | $ | 7,527 | $ | (11,099 | ) | (147 | )% | ||||||
Oil and gas derivative realized gain
|
10,877 | 17,825 | (6,948 | ) | (39 | )% | ||||||||||
Interest rate swap unrealized gain
|
126 | 4,285 | (4,159 | ) | (97 | )% | ||||||||||
Interest rate swap realized gain (loss)
|
898 | (340 | ) | 1,238 | 364 | % | ||||||||||
$ | 8,329 | $ | 29,297 | $ | (20,968 | ) | (72 | )% |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Revenues
|
$ | - | $ | 303,206 | ||||
Income from discontinued operations before taxes
|
$ | - | $ | 36,832 | ||||
Income tax expense 1
|
- | (3,350 | ) | |||||
$ | - | $ | 33,482 |
1
|
Determined by applying the effective tax rate attributable to discontinued operations to the income from discontinued operations less noncontrolling interests that are fully attributable to PVG's operations.
|
Six Months Ended June 30,
|
||||||||||||
2011
|
2010
|
Variance
|
||||||||||
Cash flows from operating activities
|
$ | 63,759 | $ | 45,669 | $ | 18,090 | ||||||
Cash flows from investing activities
|
||||||||||||
Capital expenditures - property and equipment
|
(211,081 | ) | (168,081 | ) | (43,000 | ) | ||||||
Proceeds from the sale of PVG units, net
|
- | 139,120 | (139,120 | ) | ||||||||
Proceeds from the sale of property and equipment and other, net
|
796 | 24,469 | (23,673 | ) | ||||||||
Net cash used in investing activities
|
(210,285 | ) | (4,492 | ) | (205,793 | ) | ||||||
Cash flows from financing activities
|
||||||||||||
Dividends paid
|
(5,156 | ) | (5,131 | ) | (25 | ) | ||||||
Proceeds from issuance of Senior Notes due 2019
|
300,000 | - | 300,000 | |||||||||
Repurchase of Convertible Notes
|
(232,963 | ) | - | (232,963 | ) | |||||||
Debt issuance costs paid
|
(6,559 | ) | - | (6,559 | ) | |||||||
Proceeds from sale of PVG units, net
|
- | 199,125 | (199,125 | ) | ||||||||
Distributions received from discontinued operations
|
- | 11,218 | (11,218 | ) | ||||||||
Other, net
|
974 | 1,844 | (870 | ) | ||||||||
Net cash provided by financing activities
|
56,296 | 207,056 | (150,760 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents
|
$ | (90,230 | ) | $ | 248,233 | $ | (338,463 | ) |
Cash flows from operating activities for the six months ended June 30, 2010
|
$ | 45,669 | ||
Variances due to:
|
||||
Lower settlements from commodity derivatives portfolio
|
(6,948 | ) | ||
Lower interest payments, net of amounts capitalized
|
1,270 | |||
Lower restructuring costs paid
|
2,606 | |||
Lower tax payments
|
3,246 | |||
Transaction costs paid in connection with extinguishment of debt
|
(2,433 | ) | ||
Higher operating performance
|
20,349 | |||
Cash flows from operating activities for the six months ended June 30, 2011
|
$ | 63,759 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Oil and gas:
|
||||||||
Development drilling
|
$ | 119,711 | $ | 109,457 | ||||
Exploration drilling
|
39,765 | 8,147 | ||||||
Seismic
|
6,137 | 4,485 | ||||||
Lease acquisitions, field projects and other
|
39,901 | 71,639 | ||||||
Pipeline and gathering facilities
|
3,571 | 738 | ||||||
209,085 | 194,466 | |||||||
Other - Corporate
|
629 | 961 | ||||||
Total capital program costs
|
$ | 209,714 | $ | 195,427 |
Six Months Ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Total capital program costs
|
$ | 209,714 | $ | 195,427 | ||||
Less:
|
||||||||
Exploration expenses
|
||||||||
Seismic
|
(6,137 | ) | (4,485 | ) | ||||
Other, primarily delay rentals
|
(1,702 | ) | (1,264 | ) | ||||
Other
|
(1,576 | ) | - | |||||
Changes in accrued capitalized costs
|
9,692 | (14,110 | ) | |||||
Property received as consideration in sale transaction 1
|
- | (8,204 | ) | |||||
Add:
|
||||||||
Capitalized interest
|
990 | 717 | ||||||
Other
|
100 | - | ||||||
Total cash paid for capital expenditures
|
$ | 211,081 | $ | 168,081 |
1
|
Represents property received in Mississippi in connection with the sale of our Gulf Coast properties.
|
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Revolving credit facility
|
$ | - | $ | - | ||||
Senior Notes due 2016, net of discount (principal amount of $300,000)
|
293,009 | 292,487 | ||||||
Senior Notes due 2019
|
300,000 | - | ||||||
Convertible Notes due 2012, net of discount (principal amount of $4,915 and $230,000)
|
4,659 | 214,049 | ||||||
$ | 597,668 | $ | 506,536 |
Notional
|
Swap Interest Rates
|
||||||||
Term
|
Amounts
|
Pay
|
Receive
|
||||||
Through June 2013
|
$ | 100,000 |
3-month LIBOR + 8.175%
|
10.375 | % |
|
·
|
Total debt to EBITDAX, each as defined in the previous credit facility, for any four consecutive quarters may not exceed 4.0 to 1.0 reducing to 3.5 to 1.0 for periods ending on or after September 30, 2011. EBITDAX, which is a non-GAAP measure, generally means net income plus interest expense, taxes, depreciation, depletion and amortization expenses, exploration expenses, impairments, other non-cash charges or losses and the amount of cash distributions received from PVG and Penn Virginia Resource Partners, L.P.
|
|
·
|
The current ratio, as of the last day of any quarter, may not be less than 1.0 to 1.0. The current ratio is generally defined as current assets to current liabilities. Current assets and current liabilities attributable to derivative instruments are excluded. In addition, current assets include the amount of any unused commitment under the previous credit facility.
|
Required
|
Actual
|
|||
Description of Covenant
|
Covenant
|
Results
|
||
Total debt to EBITDAX
|
< 4.0 to 1
|
3.1 to 1
|
||
Current ratio
|
> 1.0 to 1
|
4.2 to 1
|
Average
|
|||||||||||||||||||||
Volume Per
|
Weighted Average Price
|
Fair Value
|
|||||||||||||||||||
Instrument
|
Day
|
Floor/Swap
|
Ceiling
|
Asset
|
Liability
|
||||||||||||||||
|
(in MMBtu)
|
||||||||||||||||||||
Natural Gas:
|
|||||||||||||||||||||
Third quarter 2011
|
Costless collars
|
30,000 | $ | 4.83 | $ | 6.00 | $ | 1,615 | $ | - | |||||||||||
Fourth quarter 2011
|
Costless collars
|
20,000 | $ | 6.00 | $ | 8.50 | 2,703 | - | |||||||||||||
First quarter 2012
|
Costless collars
|
20,000 | $ | 6.00 | $ | 8.50 | 2,349 | - | |||||||||||||
Third quarter 2011
|
Swaps
|
40,000 | $ | 5.06 | 2,532 | - | |||||||||||||||
Fourth quarter 2011
|
Swaps
|
10,000 | $ | 5.01 | 399 | - | |||||||||||||||
First quarter 2012
|
Swaps
|
10,000 | $ | 5.10 | 250 | - | |||||||||||||||
Second quarter 2012
|
Swaps
|
20,000 | $ | 5.31 | 1,098 | - | |||||||||||||||
Third quarter 2012
|
Swaps
|
20,000 | $ | 5.31 | 935 | - | |||||||||||||||
Fourth quarter 2012
|
Swaps
|
10,000 | $ | 5.10 | 76 | - | |||||||||||||||
Crude Oil:
|
(barrels)
|
||||||||||||||||||||
Third quarter 2011
|
Costless collars
|
360 | $ | 80.00 | $ | 103.30 | - | 24 | |||||||||||||
Fourth quarter 2011
|
Costless collars
|
360 | $ | 80.00 | $ | 103.30 | - | 91 | |||||||||||||
First quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 317 | - | |||||||||||||
Second quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 300 | - | |||||||||||||
Third quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 292 | - | |||||||||||||
Fourth quarter 2012
|
Costless collars
|
500 | $ | 100.00 | $ | 120.00 | 295 | - | |||||||||||||
Third quarter 2011
|
Swaps
|
500 | $ | 109.00 | 591 | - | |||||||||||||||
Fourth quarter 2011
|
Swaps
|
500 | $ | 109.00 | 520 | - | |||||||||||||||
$ | 14,272 | $ | 115 |
Change of $1.00 per MMBtu of Natural Gas
|
||||||||
or $10.00 per Barrel of Crude Oil
|
||||||||
Increase
|
Decrease
|
|||||||
Effect on the fair value of natural gas derivatives
|
$ | (13.1 | ) | $ | 13.8 | |||
Effect on the fair value of crude oil derivatives
|
$ | (3.1 | ) | $ | 2.5 | |||
Effect on 2011 operating income, excluding natural gas derivatives
|
$ | (15.8 | ) | $ | 15.8 | |||
Effect on 2011 operating income, excluding crude oil derivatives
|
$ | (13.2 | ) | $ | 13.2 |
10.1
|
Amendment One to the Penn Virginia Corporation Amended and Restated Non-Employee Directors Deferred Compensation Plan (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on May 6, 2011).
|
10.2
|
Amendment No. 1 to the Penn Virginia Corporation Seventh Amended and Restated 1999 Employee Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to Registrant’s Current Report on Form 8-K filed on May 6, 2011).
|
10.3
|
First Amendment and Waiver of Credit Agreement dated as of April 5, 2011 among Penn Virginia Holding Corp., as borrower, Penn Virginia Corporation, as parent, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed on April 5, 2011).
|
12.1
|
Statement of Computation of Ratio of Earnings to Fixed Charges Calculation.
|
31.1
|
Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
PENN VIRGINIA CORPORATION
|
||
Date: August 4, 2011
|
By:
|
/s/ Steven A. Hartman
|
|
Steven A. Hartman
|
|
|
Senior Vice President and Chief Financial Officer
|
|
Date: August 4, 2011
|
By:
|
/s/ Joan C. Sonnen
|
|
Joan C. Sonnen
|
|
|
Vice President and Controller
|
*_F;*^'+'X]\7DM9QSG^[1%[A;ZK3+RE(Z/=6>HM';+1CS5\OT'=9-L\N+5 M\J1TM'E9*))G^#<4"`!0`ZJH^*[(*/PE*>.>O;9TLVYIE*?8,X_ARMPSEQ=X M_-;6:6&RY_&WA7*!ET*Y+IS;A(PF^Q\BW/\`2@X22#X>@#^S.CK9O1Z[2%;I M<-`)6HQE$-+/?5:ZYM3UC'M$&;0)9Y5ZY58Q\Y310#Y+BS*LJ81,H8YA]_0` M_P"7\38IA^O]7;AC+69S&^]DOL_L&Q.:N>"_A*EYSZ-L\4WT&NP,Q`RT-&VV MS-;0<\RHL@Y;2#M`CHZ(.5'*JX`O=DM&L:TJO-Z#69*3QYRK3;?(&F5P,ZC@0*7_`%8E(4R*)DP#!Y`Y6I?% MN#4GG'-+?HELS?.&)HBCIZ9*5N FZGTK0:LWH%0E*->Z-!4Z*SE%:P+KY\[ MIZV8R$?9:M)*VE^9RG+F?N53K%/]P'0;F1`\M#SX 0KKWCZW[SUOV&B\;2SQCT.H_EOQ90\3YP MR/5@"/1>@%Z`K/[\RWW"O:[%MO\`W-5M@ID'^T`45KLFM[?H'R("K0YQ_P#* M@7U3S]T6RL5:[\LH M_3:!7?/5I?$JD5\4DNF M3+ROV:/+ NMF4_IFU;ZTBX>>G^> MN7::WL+NR3E`B9]K(P`ZI?4Z?+L(5Y(-73:,6;%.*!E7""S<`OE_&GG$'4)% M/*=Z[`S3:U(@Z,9T8YZFVW4KW_,J:1S-;);J;K%VN&/Z`U/(""SJ(DJ\>*6) M[II(MP^!DP*Q>H>X.O>`N$/''R*WD6=I\HG8UUIG(51O^AD);H:%MT9/1=-T M?I>QQZRHEM3-F6:C9)@S<#]:JLPBJY(HBW7;*@60%\76<.,_183'1_:\GOA8 M($%>K4NLMMBM4_F\4BG4M[&G1MR0PZ.8A(%^Q.N$JHUDC?V:BQ,C[@(`L^*# MM>_]N5KLKAKLA^#SK/@G97^"[5> BS$',467N(4Y MX,@UBW:*"2R1%4OI2>`U1`KW\+>$Z/VWQ3U'>=@[U\@T1K%0Z[Z1Q"B;%&=C M[(FXH%0S$M6+3I`:=+VEWFL^:)7?JN'H2T8Z3?%$Q%1!/X_``W_V[/<70_D- MX#O,YU5)DO-SR;=-&YS0VV$:?RF&XU"M5RIR+&]$/6PB6[6?3+:E6"[^,_'! 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MOO/:4LTR?9\CTV]9#HU=BYI4%WT&YLE!FX1U/U\RQUQ(PD/RFA"O79`3^MXZ M(J!SZ9P)C](Z;>]>LKMOTUNDK1(K+IJP6K;+I88&8S:#D7$U$T=U2'SLU.;0 M#"?>+R!"-63=3\YPLN)Q465$X#T['XUQ?N_%IKGGH5.[2V/VAU&N+?3Z?>[' M04+@G#2L?/1$?8Y&JO(Z8?1.Q+9X1N5PFF9=`@G`P![>@&1"^/_%Z_R6IQ M+%6_>D9.ZX>IJYC'Z,_D7-Y8T9.OJ"U1:)/RJ-D/9) M%5-,I2``[>-N+,7X/R**P7GI708S(*X=Z-0HUTT.RZ%&TQ.3F)6?E6M7>6UY M)S,:PDYJ:<.56_Y)T"JJ"*92![@($.Z[XO>:]NZFSOL^]36[*=$X\A*, 7!S M7[+:L\K\'4*]J J.5,O[%QVPX'L;R^$R MFXL5(BZ5B@WF>SP;;!+"@96OSL7?9%(M51")M-TJM?&L-;9_!RB#&/ 6GY6(*F6270*09!=('"P&<&554`__V3\_ ` end
|
Six Months
|
|||||||||||||||||||||||
|
Ended
|
|||||||||||||||||||||||
|
2006
|
2007
|
2008
|
2009
|
2010
|
June 30, 2011
|
||||||||||||||||||
Earnings
|
||||||||||||||||||||||||
Pre-tax income *
|
$ | 91,397 | $ | 52,655 | $ | 146,238 | $ | (219,068 | ) | $ | (109,562 | ) | $ | (153,494 | ) | |||||||||
Fixed charges
|
11,525 | 28,162 | 33,772 | 53,535 | 60,003 | 30,892 | ||||||||||||||||||
Total Earnings
|
$ | 102,922 | $ | 80,817 | $ | 180,010 | $ | (165,533 | ) | $ | (49,559 | ) | $ | (122,602 | ) | |||||||||
|
||||||||||||||||||||||||
Fixed Charges
|
||||||||||||||||||||||||
Interest expense
|
$ | 8,828 | $ | 23,717 | $ | 27,614 | $ | 47,545 | $ | 55,063 | $ | 28,617 | ||||||||||||
Rental Interest Factor
|
2,697 | 4,445 | 6,158 | 5,990 | 4,940 | 2,275 | ||||||||||||||||||
Total Fixed Charges
|
$ | 11,525 | $ | 28,162 | $ | 33,772 | $ | 53,535 | $ | 60,003 | $ | 30,892 | ||||||||||||
|
||||||||||||||||||||||||
Ratio of Earnings to Fixed Charges
|
8.9 | x | 2.9 | x | 5.3 | x | ** | ** | ** |
*
|
Includes cash distributions from equity affiliates and excludes equity earnings from affiliates and capitalized interest.
|
**
|
During 2009, 2010 and the six months ended June 30, 2011, earnings were deficient by $165,533, $49,559 and $122,602, respectively, regarding the coverage of fixed charges.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of the Registrant (this “Report”);
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and we have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: August 4, 2011 | ||
/s/ H. Baird Whitehead
|
||
H. Baird Whitehead
|
||
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of the Registrant (this “Report”);
|
2.
|
Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and we have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and
|
|
(d)
|
Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors:
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: August 4, 2011
|
||
/s/ Steven A. Hartman
|
||
Steven A. Hartman
|
||
Senior Vice President and Chief Financial Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 4, 2011
|
||
/s/ H. Baird Whitehead
|
||
H. Baird Whitehead
|
||
President and Chief Executive Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: August 4, 2011
|
||
/s/ Steven A. Hartman
|
||
Steven A. Hartman
|
||
Senior Vice President and Chief Financial Officer
|
Convertible Notes Tender Offer (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2011
|
|
Loss on extinguishment of debt: | ||
Non-cash portion of loss on extinguishment | $ 21,822 | |
Pre-tax loss on extinguishment | 24,238 | 24,238 |
4.5% Convertible Notes due 2012
|
||
Cash paid to repurchase principal: | ||
Allocated to liability component | 231,331 | |
Allocated to equity component | 1,632 | |
Cash paid to repurchase principal | 232,963 | |
Carrying value of liability component tendered: | ||
Principal amount of Convertible Notes tendered | 225,085 | |
Pro rata share of original issue discount | (13,429) | |
Debt Instrument, Convertible, Carrying Amount of The Liability Component | 211,656 | 211,656 |
Loss on extinguishment of debt: | ||
Excess of liability component over carrying value | 19,675 | |
Write-off of pro rata share of debt issuance costs | 2,147 | |
Non-cash portion of loss on extinguishment | 21,822 | |
Transaction costs and fees paid | 2,416 | |
Pre-tax loss on extinguishment | $ 24,238 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Preferred stock, par value | $ 100 | $ 100 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 128,000,000 | 128,000,000 |
Common stock, shares issued | 45,688,179 | 45,556,854 |
Treasury stock, shares | 162,209 | 125,357 |
Components of Selected Balance Sheet Accounts (Detail) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Other current assets: | ||
Tubular inventory and well materials | $ 2,256 | $ 3,600 |
Prepaid expenses | 1,648 | 633 |
Prepaid Expense and Other Assets, Current, Total | 3,904 | 4,233 |
Other assets: | ||
Debt issuance costs | 16,749 | 14,300 |
Long-term investments - SERP | 5,363 | 6,440 |
Other | 46 | 47 |
Other assets | 22,158 | 20,787 |
Accounts payable and accrued liabilities: | ||
Trade accounts payable | 34,493 | 33,831 |
Drilling costs | 24,052 | 31,770 |
Royalties | 10,413 | 9,308 |
Production and franchise taxes | 4,593 | 6,012 |
Compensation | 5,100 | 9,631 |
Interest | 6,241 | 2,977 |
Other | 4,432 | 6,132 |
Accounts payable and accrued liabilities | 89,324 | 99,661 |
Other liabilities: | ||
Asset retirement obligation | 7,312 | 7,364 |
Pension | 1,700 | 1,766 |
Postretirement health care | 2,978 | 2,976 |
Deferred compensation | 5,688 | 6,952 |
Other | 900 | 900 |
Other liabilities | $ 18,578 | $ 19,958 |
Fair Value Measurements (Policies)
|
6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||
Fair Value of Financial Instruments, Policy | We
apply the authoritative accounting provisions for measuring fair
value of both our financial and nonfinancial assets and
liabilities. Fair value is an exit price representing
the expected amount we would receive to sell an asset or pay to
transfer a liability in an orderly transaction with market
participants at the measurement date. We have followed
consistent methods and assumptions to estimate the fair values as
more fully described in our Annual Report on Form 10-K for the year
ended December 31, 2010.
Our
financial instruments that are subject to fair value disclosure
consist of cash and cash equivalents, accounts receivable, accounts
payable, derivatives and long-term debt. As of June 30, 2011, the
carrying values of all of these financial instruments, except the
portion of long-term debt with fixed interest rates, approximated
fair value.
|
||||||||||||
Fair Value, Measurements, Recurring
|
|||||||||||||
Fair Value of Financial Instruments, Policy | We
used the following methods and assumptions to estimate fair
values:
|
||||||||||||
Fair Value, Measurements, Nonrecurring
|
|||||||||||||
Fair Value of Financial Instruments, Policy | The
most significant non-recurring fair value measurements include the
fair value of proved properties and tubular inventory and well
materials for purposes of impairment testing and the initial
determination of asset retirement obligations (“AROs”).
The factors used to determine fair value for purposes of impairment
testing include, but are not limited to, estimates of proved and
probable reserves, future commodity prices, the timing of future
production and capital expenditures and a discount rate
commensurate with the risk reflective of the lives remaining for
the respective oil and gas properties. Because these significant
fair value inputs are typically not observable, we have categorized
the amounts as level 3 inputs.
The
determination of the fair value of AROs is based upon regional
market and facility specific information. The amount of an ARO and
the costs capitalized represent the estimated future cost to
satisfy the abandonment obligation using current prices that are
escalated by an assumed inflation factor after discounting the
future cost back to the date that the abandonment obligation was
incurred using a rate commensurate with the risk, which
approximates our cost of funds. Because these significant fair
value inputs are typically not observable, we have categorized the
initial fair value estimates as level 3 inputs.
|
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jul. 29, 2011
|
|
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | PVA | |
Entity Registrant Name | PENN VIRGINIA CORP | |
Entity Central Index Key | 0000077159 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 45,703,179 |
Summary of Long-Term Debt (Parenthetical) (Detail) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
10.375% Senior Unsecured Notes due 2016
|
||
Debt Instrument [Line Items] | ||
Principal amount | $ 300,000 | |
4.5% Convertible Notes due 2012
|
||
Debt Instrument [Line Items] | ||
Principal amount | $ 4,915 | $ 230,000 |
Property and Equipment (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Summary of Property and Equipment | The
following table summarizes our property and equipment as of the
periods presented:
|
Summary of Long-Term Debt (Detail) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Debt Instrument [Line Items] | ||
Long-term Debt, Excluding Current Maturities, Total | $ 597,668 | $ 506,536 |
Revolving credit facility
|
||
Debt Instrument [Line Items] | ||
Revolving credit facility | ||
10.375% Senior Unsecured Notes due 2016
|
||
Debt Instrument [Line Items] | ||
Senior notes | 293,009 | 292,487 |
7.25% Senior Unsecured Notes due 2019
|
||
Debt Instrument [Line Items] | ||
Senior notes | 300,000 | |
4.5% Convertible Notes due 2012
|
||
Debt Instrument [Line Items] | ||
Convertible notes due 2012, net of discount (principal amount of $4,915 and $230,000) | $ 4,659 | $ 214,049 |
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Long-Term Debt
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Long-Term Debt |
7. Long-Term
Debt
The
following table summarizes our long-term debt as of the periods
presented:
Revolving Credit Facility
We
replaced our previous revolving credit facility with the Revolver
in August 2011. The Revolver provides for a $300 million revolving
credit facility and matures in August 2016. The Revolver is
governed by a borrowing base calculation and the availability may
not exceed the lesser of the aggregate commitments or the borrowing
base. We have the option to increase the aggregate commitments
under the Revolver by up to an additional $300 million, not to
exceed the borrowing base, upon the receipt of additional
commitments from one or more lenders. The initial borrowing base is
set at $400 million, subject to redetermination on a semi-annual
basis.
Borrowings
under the Revolver bear interest, at our option, at either (i) a
rate derived from LIBOR, as adjusted for statutory reserve
requirements for Eurocurrency liabilities (the “Adjusted
LIBOR”), plus an applicable margin ranging from 1.500% to
2.500% or (ii) the greater of (a) the prime rate, (b) the federal
funds effective rate plus 0.5% or (c) the one-month Adjusted LIBOR
plus 1.0%, and, in each case, plus an applicable margin (ranging
from 0.500% to 1.500%). In each case, the applicable margin is
determined based on the ratio of our outstanding borrowings to the
available Revolver capacity. Commitment fees will be charged at
0.375% on the undrawn portion of the facility at current
utilization levels and increasing to 0.500% based upon utilization
levels in excess of 50% of the borrowing base.
The
Revolver includes both current ratio and leverage ratio financial
covenants. The current ratio, as defined in the Revolver to include
among other things, adjustments for undrawn availability, may not
be less than 1.0 to 1.0 and the ratio of total net debt to EBITDAX,
a non-GAAP financial measure defined in the Revolver, may not
exceed 4.5 to 1.0 reducing to 4.0 to 1.0 after June 30,
2013.
The
Revolver is guaranteed by Penn Virginia and all of our material
subsidiaries (“Guarantor Subsidiaries”). The
obligations under the Revolver are secured by a first priority lien
on substantially all of our proved oil and gas reserves and a
pledge of the equity interests in the Guarantor
Subsidiaries.
We
had no amounts outstanding under the previous revolving credit
facility at any time during the six months ended June 30, 2011
other than letters of credit of $1.4 million which are still
outstanding. As of June 30, 2011, our available borrowing capacity
under the previous revolving credit facility, as reduced by such
letters of credit and limited by our financial covenants, was
approximately $160 million. Our initial available borrowing
capacity under the Revolver, as reduced by our letters of credit
and limited by the financial covenants described above, is
approximately $264 million.
2016 Senior Notes
The
2016 Senior Notes were originally sold at 97% of par equating to an
effective yield to maturity of approximately 11%. The 2016 Senior
Notes bear interest at an annual rate of 10.375% payable
semi-annually in arrears on June 15 and December 15 of each year.
Beginning in June 2013, we may redeem all or part of the 2016
Senior Notes at a redemption price beginning at 105.188% of the
principal amount and reducing to 100.0% in June 2015 and
thereafter. The 2016 Senior Notes are senior to our existing and
future subordinated indebtedness and are effectively subordinated
to all of our secured indebtedness, including the Revolver, to the
extent of the collateral securing that indebtedness. The
obligations under the 2016 Senior Notes are fully and
unconditionally guaranteed by the Guarantor
Subsidiaries.
2019 Senior Notes
The
7.25% Senior Notes due 2019 (“2019 Senior Notes”),
which were issued at par in April 2011, bear interest at an annual
rate of 7.25% payable semi-annually in arrears on April 15 and
October 15 of each year. Beginning in April 2015, we may redeem all
or part of the 2019 Senior Notes at a redemption price beginning at
103.625% of the principal amount and reducing to 100.0% in June
2017 and thereafter. The 2019 Senior Notes are senior to our
existing and future subordinated indebtedness and are effectively
subordinated to all of our secured indebtedness, including the
Revolver, to the extent of the collateral securing that
indebtedness. The obligations under the 2019 Senior Notes are fully
and unconditionally guaranteed by the Guarantor
Subsidiaries.
Convertible Notes
The
4.50% Convertible Senior Subordinated Notes due 2012
(“Convertible Notes”) bear interest at an annual rate
of 4.50% which is payable semi-annually in arrears on May 15 and
November 15 of each year. The Convertible Notes are convertible
into cash up to the principal amount thereof and shares of our
common stock, if any, in respect of the excess conversion value,
based on an initial conversion rate of 17.3160 shares of common
stock per $1,000 principal amount of the Convertible Notes (which
is equal to an initial conversion price of approximately $57.75 per
share of common stock), subject to adjustment. The Convertible
Notes are unsecured senior subordinated obligations, ranking junior
in right of payment to any of our senior indebtedness and to any of
our secured indebtedness to the extent of the value of the assets
securing such indebtedness and equal in right of payment to any of
our future unsecured senior subordinated indebtedness. The
Convertible Notes rank senior in right of payment to any of our
future junior subordinated indebtedness and structurally rank
junior to all existing and future indebtedness of our Guarantor
Subsidiaries.
The
Convertible Notes are represented by a liability component which is
included in long-term debt, net of discount, and an equity
component representing the convertible feature which is included in
additional paid-in capital in shareholders’ equity. The
effective interest rate on the liability component of the
Convertible Notes for all periods presented was 8.5%.
In
connection with a tender offer completed in April 2011, the Company
repurchased $225.1 million aggregate principal amount of the
Convertible Notes for $233.0 million, representing a premium of $35
per $1,000 principal amount. The tender offer resulted in the
extinguishment of approximately 98% of the outstanding Convertible
Notes. The tender offer was funded from the net proceeds of the
2019 Senior Notes offering.
As
a result of the tender offer, we recognized a pre-tax loss on
extinguishment of debt of $25.9 million during the three months
ended June 30, 2011, of which $24.2 million was charged to earnings
and the remaining $1.7 million was charged directly to
shareholders’ equity. The loss charged to earnings was
determined as follows:
The
following table summarizes the carrying amount of the components of
the Convertible Notes as of the periods presented:
The
following table summarizes the amounts recognized as components of
interest expense attributable to the Convertible Notes for the
periods presented:
In
connection with the original sale of the Convertible Notes, we
entered into convertible note hedge transactions (“Note
Hedges”) with respect to shares of our common stock with
affiliates of certain of the underwriters of the Convertible Notes
(collectively, the “Option Counterparties”). The Note
Hedges cover, subject to anti-dilution adjustments, the net shares
of our common stock that would be deliverable to converting
noteholders in the event of a conversion of the Convertible
Notes.
We
also entered into separate warrant transactions
(“Warrants”), whereby we sold to the Option
Counterparties warrants to acquire, subject to anti-dilution
adjustments, approximately 3,982,680 shares of our common stock at
an exercise price of $74.25 per share. Upon exercise of the
Warrants, we will deliver shares of our common stock equal in value
to the excess of the then market price over the strike price of the
Warrants.
If
the market value per share of our common stock at the time of
conversion of the Convertible Notes exceeds the strike price of the
Note Hedges, the Note Hedges entitle us to receive from the Option
Counterparties net shares of our common stock (and cash for any
fractional share cash amount) based on the excess of the then
current market price of our common stock over the strike price of
the Note Hedges. Additionally, if the market price of our common
stock at the time of exercise of the Warrants exceeds the strike
price of the Warrants, we will owe the Option Counterparties net
shares of our common stock (and cash for any fractional share cash
amount), not offset by the Note Hedges, in an amount based on the
excess of the then current market price of our common stock over
the strike price of the Warrants.
|
Long-Term Debt (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Summary of Long-Term Debt | The
following table summarizes our long-term debt as of the periods
presented:
|
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4.5% Convertible Notes due 2012
|
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Summary of Long-Term Debt | The
following table summarizes the carrying amount of the components of
the Convertible Notes as of the periods presented:
|
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Convertible Notes Tender Offer | The
loss charged to earnings was determined as follows:
|
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Components of Interest Expense attributable to the Convertible Notes | The
following table summarizes the amounts recognized as components of
interest expense attributable to the Convertible Notes for the
periods presented:
|
Interest Rate Swap Terms and Positions (Parenthetical) (Detail) (Interest rate swaps)
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Interest rate swaps
|
|
Derivative [Line Items] | |
LIBOR rate used | References to LIBOR represent the 3-month rate. |
Summary of Accounts Receivable (Detail) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenue customers | $ 51,050 | $ 44,783 |
Joint interest partners | 16,707 | 23,526 |
Other | 314 | 4,442 |
Accounts Receivable, Gross, Current, Total | 68,071 | 72,751 |
Less: Allowance for doubtful accounts | (292) | (373) |
Accounts receivable, net of allowance for doubtful accounts | $ 67,779 | $ 72,378 |
Derivative Instruments (Tables)
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Jun. 30, 2011
|
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Commodity Derivative Positions | The
following table sets forth our commodity derivative positions as of
June 30, 2011:
|
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Interest Rate Swap Terms and Positions | The
following table sets forth the terms and positions of our interest
rate swap assets as of the periods presented:
|
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Impact of Derivative Activities on the Condensed Consolidated Statements of Income | The
following table summarizes the effects of our derivative activities
for the periods presented:
|
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Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets | The
following table summarizes the fair value of our derivative
instruments, as well as the locations of these instruments, on our
Condensed Consolidated Balance Sheets as of the periods
presented:
|
Share-Based Compensation
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Share-Based Compensation |
12. Share-Based
Compensation
Our stock compensation plans permit the grant
of incentive and nonqualified stock options, common stock, deferred
common stock units, restricted stock and restricted stock units to
our employees and directors. Generally, stock options
granted under our stock compensation plans vest over a three-year
period, with one-third vesting in each year. Common stock and
deferred common stock units granted under our stock compensation
plans are vested immediately, and we recognize compensation expense
related to those grants on the grant date. Restricted
stock and restricted stock units granted under our stock
compensation plans vest over a three-year period, with one-third
vesting in each year. We recognize compensation expense related to
our stock compensation plans in the General and administrative
expenses caption on our Condensed Consolidated Statements of
Income. The following table summarizes the share-based compensation
expense for the periods presented:
|
Acquisitions and Divestitures
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Acquisitions and Divestitures |
3.
Acquisitions
and Divestitures
Property Acquisitions
Eagle Ford Property Acquisitions
During
2011, we acquired approximately 6,500 net Eagle Ford Shale acres in
Gonzales County, Texas for approximately $24 million. The acreage
acquired in these transactions is in close proximity to the Eagle
Ford Shale acreage that we acquired during 2010. We are the
operator of the acquired acreage with an average working interest
of approximately 86%.
Divestitures
PVG Unit Offering
In
March and April 2010, we sold 11.25 million common units of Penn
Virginia GP Holdings, L.P. (“PVG”) for proceeds of
$199.1 million, net of offering costs. At the time, the transaction
reduced our limited partner interest in PVG to 22.6% and resulted
in a $70.2 million increase to noncontrolling interests and a $82.1
million increase to additional paid-in capital, net of income tax
effects. Because we maintained a controlling financial interest in
PVG, the proceeds received from these transactions were reported as
cash flows from financing activities on our Condensed Consolidated
Statements of Cash Flows.
In
June 2010, we completed the sale of our remaining PVG common units
for $139.1 million, net of offering costs. Immediately prior to the
closing of the June offering, we contributed 100% of the membership
interests in PVG’s general partner to PVG, thereby
relinquishing control of PVG. As a result of this divestiture, we
recognized a gain of $49.6 million, net of income tax effects of
$35.1 million, which is reported in the “Gain on sale of
discontinued operations, net of tax” caption on our Condensed
Consolidated Statements of Income. Because we no longer held any
interests in PVG, the proceeds received from this transaction were
reported as cash flows from investing activities on our Condensed
Consolidated Statements of Cash Flows, and we deconsolidated PVG
from our Consolidated Financial Statements. The results of
operations and cash flows attributable to PVG for the 2010 period
are presented in these Condensed Consolidated Financial Statements
and Notes as discontinued operations.
Oil and Gas Properties
In July 2011, we executed an agreement to sell
substantially all of our Arkoma Basin assets for approximately $30
million, excluding transaction costs and subject to customary
purchase and sale adjustments. The transaction will be effective
July 1, 2011 and we anticipate that it will close during the third
quarter of 2011. The properties to be sold include approximately
73,000 net acres and proved reserves of approximately 42.5 billion
cubic feet of natural gas equivalent. The carrying value of these
properties as of June 30, 2011 was approximately $101 million.
During the quarter ended June 30, 2011, we recognized an impairment
of approximately $71 million with respect to these
assets.
In
January 2010, we completed the sale of all of our oil and gas
properties in the Gulf Coast region (southern Texas and Louisiana)
for cash proceeds of $23.2 million, net of transaction costs and
certain purchase and sale adjustments, and the exchange of certain
oil and gas properties located in the Gwinville field in northern
Mississippi valued at $8.2 million.
|
Earnings per Share (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Components of the Calculation of Basic and Diluted Earnings Per Share | The
following table provides a reconciliation of the components used in
the calculation of basic and diluted earnings per share for the
periods presented:
|
Fair Value Measurements
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Fair Value Measurements |
9. Fair Value
Measurements
We
apply the authoritative accounting provisions for measuring fair
value of both our financial and nonfinancial assets and
liabilities. Fair value is an exit price representing
the expected amount we would receive to sell an asset or pay to
transfer a liability in an orderly transaction with market
participants at the measurement date. We have followed
consistent methods and assumptions to estimate the fair values as
more fully described in our Annual Report on Form 10-K for the year
ended December 31, 2010.
Our
financial instruments that are subject to fair value disclosure
consist of cash and cash equivalents, accounts receivable, accounts
payable, derivatives and long-term debt. As of June 30, 2011, the
carrying values of all of these financial instruments, except the
portion of long-term debt with fixed interest rates, approximated
fair value. The following tables summarize the fair value of our
long-term debt with fixed interest rates, which is estimated based
on the published market prices for the same or similar issues as of
the periods presented:
Recurring Fair Value Measurements
Certain
financial assets and liabilities are measured at fair value on a
recurring basis in our Condensed Consolidated Balance Sheets. The
following tables summarize the valuation of those assets and
liabilities as of the periods presented:
We
used the following methods and assumptions to estimate fair
values:
Non-Recurring Fair Value Measurements
The
most significant non-recurring fair value measurements include the
fair value of proved properties and tubular inventory and well
materials for purposes of impairment testing and the initial
determination of asset retirement obligations (“AROs”).
The factors used to determine fair value for purposes of impairment
testing include, but are not limited to, estimates of proved and
probable reserves, future commodity prices, the timing of future
production and capital expenditures and a discount rate
commensurate with the risk reflective of the lives remaining for
the respective oil and gas properties. Because these significant
fair value inputs are typically not observable, we have categorized
the amounts as level 3 inputs.
The
determination of the fair value of AROs is based upon regional
market and facility specific information. The amount of an ARO and
the costs capitalized represent the estimated future cost to
satisfy the abandonment obligation using current prices that are
escalated by an assumed inflation factor after discounting the
future cost back to the date that the abandonment obligation was
incurred using a rate commensurate with the risk, which
approximates our cost of funds. Because these significant fair
value inputs are typically not observable, we have categorized the
initial fair value estimates as level 3 inputs.
In
addition to these non-recurring fair value measurements, we
utilized fair value measurements in the determination of the loss
on the extinguishment of approximately 98% our Convertible Notes.
In connection with that determination, we were required to allocate
the cash paid to repurchase the Convertible Notes to its liability
and equity components. Furthermore, the allocation to the liability
component was based on the fair value of a comparable debt
instrument that has no conversion feature. The residual amount of
cash paid to repurchase the Convertible Notes was allocated to the
equity component.
|
Impairments
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Impairments |
14. Impairments
The
following table summarizes impairment charges recorded during the
periods presented:
During
the three months ended June 30, 2011, we recognized an impairment
of our Arkoma Basin assets which was triggered by the expected
disposition of these high-cost gas properties in the third quarter
of 2011. As disclosed in Note 3, we executed an agreement to sell
these properties in July 2011.
|
Commitments and Contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Commitments and Contingencies |
10. Commitments and
Contingencies
Commitments
Our
most significant commitments consist of operating lease rentals for
equipment and office space, the purchase of oil and gas well
drilling services and capacity utilization under firm
transportation service agreements, as more fully described in our
Annual Report on Form 10-K for the year ended December 31,
2010.
Contingencies - Legal and Regulatory
We
are involved, from time to time, in various legal proceedings
arising in the ordinary course of business. While the
ultimate results of these proceedings cannot be predicted with
certainty, our management believes that these claims will not have
a material effect on our financial position or results of
operations. During 2010, we established a $0.9 million reserve for
a litigation matter and a $0.5 million reserve for a sales and use
tax audit contingency. In addition, as of June 30, 2011, we have
recorded AROs of $7.3 million attributable to the plugging of
abandoned wells.
|
Restructuring Activities (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Summary of Restructuring Charges | These
restructuring charges are included in the General and
administrative expenses caption on our Condensed Consolidated
Statements of Income and are comprised of the following for the
periods presented:
|
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Summary of Termination Benefit Obligations | The
following table summarizes the termination benefit obligations as
of and for the six months ended June 30,:
|
Additional Balance Sheet Detail
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Additional Balance Sheet Detail |
8. Additional Balance Sheet Detail
The
following tables summarize components of selected balance sheet
accounts as of the periods presented:
|
Components of Interest Expense attributable to the Convertible Notes (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Debt Disclosure [Line Items] | ||||
Accretion of original issue discount | $ 583 | $ 2,001 | $ 2,788 | $ 4,111 |
Amortization of debt issuance costs | 895 | 964 | 1,962 | 2,109 |
4.5% Convertible Notes due 2012
|
||||
Debt Disclosure [Line Items] | ||||
Contractual interest expense | 421 | 2,587 | 3,009 | 5,175 |
Accretion of original issue discount | 318 | 1,817 | 2,265 | 3,609 |
Amortization of debt issuance costs | 55 | 310 | 389 | 641 |
Interest Expense, Debt, Total | $ 794 | $ 4,714 | $ 5,663 | $ 9,425 |
Organization
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Organization |
1. Organization
Penn
Virginia Corporation (“Penn Virginia,” the
“Company,” “we,” “us” or
“our”) is an independent oil and gas company engaged
primarily in the development, exploration and production of natural
gas and oil in various domestic onshore regions including Texas,
Appalachia, the Mid-Continent and Mississippi.
|
Accounts Receivable
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Accounts Receivable |
4. Accounts
Receivable
The
following table summarizes our accounts receivable by type as of
the periods presented:
For
the six months ended June 30, 2011 and 2010, four customers
accounted for $84.0 million and $60.4 million, or approximately 60%
and 51%, respectively, of our total consolidated product
revenues. As of June 30, 2011 and December 31, 2010,
$28.3 million and $31.1 million, or approximately 42% and 43%,
respectively, of our consolidated accounts receivable, including
joint interest billings, related to these customers. No significant
uncertainties exist related to the collectability of amounts owed
to us by these customers.
|
Derivative Instruments - Additional Information (Detail) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 1 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
|
Jun. 30, 2011
Credit Concentration Risk
Commodity contracts
Entity
|
Jun. 30, 2011
Commodity contracts
Entity
|
Jun. 30, 2011
Commodity contracts
Natural Gas
|
Jun. 30, 2011
Commodity contracts
Crude Oil
|
Dec. 31, 2009
10.375% Senior Unsecured Notes due 2016
|
|
Derivative Instruments and Hedging Activities Disclosure [Line Items] | |||||||
Third-party quoted forward prices | NYMEX Henry Hub natural gas | West Texas Intermediate crude oil | |||||
Entered interest rate swap | to establish variable rates on approximately one-third of the face amount of the outstanding obligation | ||||||
Derivative assets | $ 16,987 | $ 20,707 | $ 14,300 | ||||
Number of commodity derivative counterparties | 2 | 4 |
Share-Based Compensation (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Summary of Share-Based Compensation Expense | The
following table summarizes the share-based compensation expense for
the periods presented:
|
Reconciliation of the Carrying Amounts of Shareholders' Equity (Parenthetical) (Detail) (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Stockholders Equity Note [Line Items] | ||
Dividends paid, per share | $ 0.1125 | $ 0.1125 |
Summary of Share-Based Compensation Expense (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock option plans | $ 1,379 | $ 1,276 | $ 2,787 | $ 3,385 |
Common, deferred and restricted stock and restricted stock unit plans | 634 | 392 | 1,022 | 1,304 |
Share-based compensation | $ 2,013 | $ 1,668 | $ 3,809 | $ 4,689 |
Carrying Amount of the Components of the Convertible Notes (Detail) (4.5% Convertible Notes due 2012, USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
4.5% Convertible Notes due 2012
|
||
Debt Outstanding [Line Items] | ||
Principal | $ 4,915 | $ 230,000 |
Unamortized discount | (256) | (15,951) |
Net carrying amount of liability component | 4,659 | 214,049 |
Carrying amount of equity component | $ 35,201 | $ 36,850 |
Summary of Impairment Charges (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Oil and gas properties | $ 71,071 | $ 71,071 | ||
Other | 1,124 | 1,124 | ||
Asset Impairment Charges, Total | $ 71,071 | $ 1,124 | $ 71,071 | $ 1,124 |
Derivative Instruments
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Derivative Instruments |
5. Derivative
Instruments
We
utilize derivative instruments to mitigate our financial exposure
to natural gas and crude oil price volatility as well as interest
rates attributable to our debt instruments. We are not engaged in
the trading of derivative instruments for speculative purposes. The
derivative instruments, which are placed with financial
institutions that we believe are acceptable credit risks, generally
take the form of costless collars and swaps. Our derivative
instruments are not formally designated as hedges.
Commodity Derivatives
We
determine the fair values of our oil and gas derivative instruments
using third-party quoted forward prices for NYMEX Henry Hub natural
gas and West Texas Intermediate crude oil as of the end of the
reporting period and discount rates adjusted for the credit risk of
our counterparties if the derivative is in an asset position and
our own credit risk if the derivative is in a liability
position.
The
following table sets forth our commodity derivative positions as of
June 30, 2011:
Interest Rate Swaps
In
December 2009, we entered into an interest rate swap agreement to
establish variable rates on approximately one-third of the face
amount of the outstanding obligation under the 10.375% Senior Notes
due 2016 (“2016 Senior Notes”).
The
following table sets forth the terms and positions of our interest
rate swap assets as of the periods presented:
1 References to LIBOR represent the 3-month rate.
Financial Statement Impact of Derivatives
The
impact of our derivative activities on income is included in the
Derivatives caption on our Condensed Consolidated Statements of
Income. The following table summarizes the effects of our
derivative activities for the periods presented:
The
effects of derivative gains (losses) and cash settlements of our
commodity and interest rate derivatives are reported as adjustments
to reconcile net income to net cash provided by operating
activities from continuing operations. These items are recorded in
the “Derivative contracts: Net gains” and
“Derivative contracts: Cash settlements” captions on
our Condensed Consolidated Statements of Cash Flows.
The
following table summarizes the fair value of our derivative
instruments, as well as the locations of these instruments, on our
Condensed Consolidated Balance Sheets as of the periods
presented:
As
of June 30, 2011, we reported a commodity derivative asset of $14.3
million. The contracts associated with this position are
with four counterparties, all of which are investment grade
financial institutions, and are substantially concentrated with two
of those counterparties. This concentration may impact our overall
credit risk, either positively or negatively, in that these
counterparties may be similarly affected by changes in economic or
other conditions. We neither paid nor received
collateral with respect to our derivative positions. No
significant uncertainties exist related to the collectability of
amounts that may be owed to us by these
counterparties.
|
Interest Rate Swap Terms and Positions (Detail) (Interest rate swaps, USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2011
|
Dec. 31, 2010
|
|||
---|---|---|---|---|---|
Interest rate swaps
|
|||||
Derivative [Line Items] | |||||
Term | Through June 2013 | ||||
Amount | $ 100,000 | ||||
Swap Interest Rates - Pay | 8.175% | [1] | |||
Swap Interest Rates - Receive | 10.375% | [1] | |||
Position | $ 2,715 | $ 2,590 | |||
|
Additional Balance Sheet Detail (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Components of Selected Balance Sheet Accounts | The
following tables summarize components of selected balance sheet
accounts as of the periods presented:
|
Components of the Calculation of Basic and Diluted Earnings Per Share (Detail) (USD $)
In Thousands |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||||||
Loss from continuing operations | $ (71,918) | $ (21,097) | $ (98,258) | $ (10,331) | |||||||
Income from discontinued operations, net of tax | 21,308 | [1] | 33,482 | [1] | |||||||
Gain on sale of dicontinued operations | 49,612 | 49,612 | 49,612 | ||||||||
Less net income attributable to noncontrolling interests in discontinued operations | (18,744) | (28,090) | |||||||||
Income (loss) attributable to Penn Virginia Corporation | (71,918) | 31,079 | (98,258) | 44,673 | |||||||
Less: Portion of subsidiary net income allocated to undistributed share-basd compensation awards, net of tax | (28) | ||||||||||
Net Income (Loss) Available to Common Stockholders, Basic, Total | $ (71,918) | $ 31,079 | $ (98,258) | $ 44,645 | |||||||
Weighted-average shares, basic | 45,768 | 45,539 | 45,724 | 45,508 | |||||||
Effect of dilutive securities | 251 | [2] | 259 | [2] | |||||||
Weighted-average shares, diluted | 45,768 | 45,790 | 45,724 | 45,767 | |||||||
|
Summary of Restructuring Charges (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 52 | $ 4,170 | $ 70 | $ 5,647 |
Termination benefits
|
||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 5 | 867 | ||
Employee and office relocation costs
|
||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 52 | 515 | 70 | 675 |
Other incremental costs
|
||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 150 | 605 | ||
Lease assignment charge
|
||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 3,500 | $ 3,500 |
Impairments (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Impairment Charges | The
following table summarizes impairment charges recorded during the
periods presented:
|
Shareholders' Equity and Comprehensive Income (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Reconciliation of the Carrying Amounts of Shareholders' Equity | The
following table is a reconciliation of the carrying amounts of
total shareholders’ equity attributable to Penn Virginia and
shareholders’ equity attributable to the noncontrolling
interests in PVG for the periods presented:
|
Restructuring Activities
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Restructuring Activities |
13. Restructuring
Activities
During
2009 and 2010, we implemented an organization restructuring in
connection with our transformation to a pure play development,
exploration and production company. The restructuring resulted in
the termination of approximately 30 employees and the transfer of
certain corporate and division operations functions from our former
Kingsport, Tennessee location to our Houston, Texas and Pittsburgh
and Radnor, Pennsylvania locations. We incurred special
termination benefit costs, relocation costs and other incremental
costs associated with staffing and expanding our office
locations.
These
restructuring charges are included in the General and
administrative expenses caption on our Condensed Consolidated
Statements of Income and are comprised of the following for the
periods presented:
The
following table summarizes the termination benefit obligations as
of and for the six months ended June 30,:
|
Commitments and Contingencies - Additional Information (Detail) (USD $)
In Millions |
12 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
Dec. 31, 2010
Legal Reserve
|
Dec. 31, 2010
Sales and Use Tax Audit
|
|
Loss Contingencies [Line Items] | |||
Reserve established for contingency matters | $ 0.9 | $ 0.5 | |
Recorded AROs attributable to the plugging of abandoned wells | $ 7.3 |
Restructuring Activities - Additional Information (Detail)
|
24 Months Ended |
---|---|
Dec. 31, 2010
Person
|
|
Restructuring Cost and Reserve [Line Items] | |
Organization restructuring, termination of employees | 30 |
Property and Equipment
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment |
6.
Property and
Equipment
The
following table summarizes our property and equipment as of the
periods presented:
|
Earnings per Share
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share |
16. Earnings
per Share
The
following table provides a reconciliation of the components used in
the calculation of basic and diluted earnings per share for the
periods presented:
|
Components of Interest Expense (Detail) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Component of Other Expense, Nonoperating [Line Items] | ||||
Interest on borrowings and related fees | $ 13,120 | $ 10,709 | $ 23,867 | $ 21,487 |
Accretion on original issue discount | 583 | 2,001 | 2,788 | 4,111 |
Amortization of debt issuance costs | 895 | 964 | 1,962 | 2,109 |
Capitalized interest | (455) | (355) | (990) | (717) |
Other, net | 2 | 2 | ||
Interest expense | $ 14,143 | $ 13,321 | $ 27,627 | $ 26,992 |
Summary of Termination Benefit Obligations (Detail) (USD $)
In Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Restructuring Cost and Reserve [Line Items] | ||
Balance at beginning of period | $ 64 | $ 529 |
Termination benefits accrued | 867 | |
Cash payments | $ (64) | $ (1,396) |
Accounts Receivable - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2011
Customer Concentration Risk
Entity
|
Jun. 30, 2010
Customer Concentration Risk
Entity
|
Jun. 30, 2011
Credit Concentration Risk
|
Dec. 31, 2010
Credit Concentration Risk
|
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Number of major customers | 4 | 4 | ||
Revenues, major customers | $ 84.0 | $ 60.4 | ||
Percentage of revenue from major customers | 60.00% | 51.00% | ||
Accounts receivable, major customers | $ 28.3 | $ 31.1 | ||
Percentage of accounts receivable from major customers | 42.00% | 43.00% |
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