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, jumped 19%
in premarket trading Thursday to $7.38.
The Radnor, Pa. company, which drills for oil and gas in Texas,
Oklahoma and Pennsylvania, has 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 $432
million, according to FactSet, after shares closed up 2.7%, or 16
cents, at $6.20 on Wednesday before the company reported
fourth-quarter results that missed Wall Street's expectations.
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 on Wednesday 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.
"Our fourth quarter product revenues were impacted by lower
commodity prices," Chief Executive H. Baird Whitehead said in the
company's earnings release. Penn Virginia said it would dedicate
its 2015 budget to drilling into south Texas shale, where its wells
have the best returns.
An analyst call is scheduled for Thursday morning.
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 Virgina 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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