By Dana Mattioli and Ryan Dezember
Energy producer Penn Virginia Corp. is exploring a sale as its
stock price has declined, its reserves have lost value and
billionaire George Soros has urged the company to find a buyer.
The oil-and-gas explorer has been working with Bank of America
Corp. to look for potential buyers, said people familiar with the
matter.
Shares of Penn Virginia, down 58% over the past year, rose 9% in
early trading Thursday to $6.77 after The Wall Street Journal's
report on the potential sale.
Before Wednesday, the Radnor, Pa. company, which drills for oil
and gas in Texas, Oklahoma and Pennsylvania, had seen its share
price fall more than 60% since June, battered by the swift decline
in oil prices since summer. It currently has a stock market value
of around $444 million, according to FactSet, after shares rose
14.5% in midday trading Thursday following The Wall Street
Journal's report of the sales effort.
The company after trading hours on Wednesday reported
fourth-quarter results that missed Wall Street's expectations. On a
call with analysts Thursday morning, Chief Executive H. Baird
Whitehead declined to discuss the sales efforts. "It's our policy
not to comment on these matters," he said.
Penn Virginia's history dates back to 1882, when the company was
founded as a coal concern in Virginia. It shifted to oil and gas in
the 1980s, and more recently has pared its natural gas holdings in
favor of oil fields. Before a collapse in natural gas prices in
2008, the company's shares traded at more than 10 times their
current price.
Penn Virginia reported a fourth-quarter loss of $417.7 million,
or $5.90 a share, compared with a loss of $4.1 million, or 6 cents
a share, the same period a year ago, as the company wrote down the
value of fields in East Texas and Oklahoma. In all, impairments
totaled $667.8 million during the fourth quarter, the company
said.
Revenue fell 13% from a year earlier to $102 million. At
year-end, Penn Virginia had about $1.1 billion of debt, the company
said in a securities filing Wednesday.
Penn Virginia said it would dedicate its 2015 budget to drilling
into south Texas shale, where its wells have the best returns. Mr.
Whitehead told analysts that the company may be willing to sell
some gas fields where it has curbed drilling amid a prolonged slump
in prices for the fuel in order to further focus on its south Texas
properties.
Mr. Soros's investment fund, Soros Fund Management LLC, has been
in and out of Penn Virginia's stock since at least 2009. The New
York firm said in a disclosure earlier this month it owned about 8%
of Penn Virginia's stock, making it one of the largest
shareholders.
In a June letter to the company, Scott Bessent, chief investment
officer at Soros, criticized Penn Virginia for selling convertible
preferred stock and rejecting the Soros firm's suggestion to offer
executives financial incentive to sell the company.
The letter urged the company to find a buyer that could tap Penn
Virginia's reserves more efficiently. "The time has come for the
Company to put itself up for sale as the surest path to maximize
shareholder value," Mr. Bessent wrote.
Write to Dana Mattioli at dana.mattioli@wsj.com and Ryan
Dezember at ryan.dezember@wsj.com
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