Penn Virginia announced that its bank group has completed a semi-annual re-determination of the borrowing base under its revolving credit facility. As a result, the borrowing base has been revised to $450 million, or approximately six percent less than its previous level of $479 million.
PVA currently has $390 million of borrowings outstanding under its revolving credit facility, is in compliance with all of the financial covenants under the facility and expects to remain in compliance through 2009. Total debt for PVA, including $230 million of convertible senior subordinated notes due 2012 and excluding non-recourse debt of Penn Virginia Resource Partners, L.P., is currently $620 million.
As previously announced, PVA expects oil and gas capital expenditures to range between $210 and $220 million during 2009. Approximately $90 million is expected to have been spent during the first quarter of 2009, leaving approximately $120 to 130 million to be spent during the remaining nine months of the year. Given the availability under the revolving credit facility and expected cash flows from operations, including distributions from Penn Virginia GP Holdings, L.P. and cash settlements of hedges, PVA believes it has sufficient capital resources to fund its remaining 2009 capital expenditures.
A. James Dearlove, President and Chief Executive Officer of PVA, said, "The re-determined borrowing base is in line with our expectations and we believe it provides us with sufficient liquidity to fund near-term oil and gas capital spending plans. We currently have hedged over 75 percent of expected natural gas production during the final three quarters of 2009 at an average floor of $6.42 and an average ceiling of $7.69 per million Btu (British thermal unit). Given the uncertainty and potential near-term weakness with respect to natural gas prices, we will remain flexible with our capital spending plans."
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