Penn Virginia Corp., Radnor, Pa., (NYSE: PVA) reports its completed two Granite Wash well during the fourth quarter with a combined initial rate of 32 million cubic feet of gas per day.

The Sawawtsky 1-12H (45% working interest) had initial production of 16.5 million cubic feet of gas equivalent per day. The Janzen 1-27H (19%) had an initial rate of 15.5 million cubic feet equivalent per day. In total, Penn Virginia participated in four (1.3 net) Granite Wash horizontal wells in Texas, of which two (0.6 net) were completed and successful and two (0.6 net) are waiting on completion.

Penn Virginia is currently operating one drilling rig in the Granite Wash play and expect to add a second operated rig by the second quarter, with a third rig to be added to test recently acquired acreage during the second half of 2010. During 2010, the company expects to drill up to 38 (17.4 net) horizontal development wells on its joint venture acreage in Washita County, Oklahoma and up to six (3.2 net) exploratory wells in new areas.

The company has expanded its Granite Wash play position with additional projects, increasing the acreage position to approximately 24,000 net acres. Penn Virginia expects to spend up to $15 million in 2010 to add leasehold acreage.

The company commenced drilling in January its first Marcellus well, a vertical test, in Tioga County, Pennsylvania.

A full core of the Marcellus section will be obtained during drilling, with the completion procedure dependent on the analyses of the core. During 2010, the company expects to drill up to six (4.8 net) exploratory wells, with up to four of the wells being horizontal tests.

The company recently acquired approximately 3,700 net acres of Pennsylvania acreage in Potter County. Penn Virginia may spend up to $48 million in 2010 adding to this leasehold position.

In East Texas, Penn Virginia participated in one Lower Bossier (Haynesville) shale horizontal well during the fourth quarter, which is waiting on completion. The company has three operated rigs drilling wells targeting the Lower Bossier and plans to reduce its rig count to two in the near future, drilling horizontal Lower Bossier wells and horizontal Cotton Valley wells. During 2010, the company expects to drill up to seven (7.0 net) horizontal Lower Bossier wells and up to eight (6.5 net) horizontal Cotton Valley wells. The company will defer testing of the Upper Bossier and the Smackover Lime to 2011.

In Mississippi, the company recommenced drilling in the Selma Chalk in January with one operated rig. The company made a $6-million acquisition in the Selma Chalk in January, which added proved reserves of 3.4 billion cubic feet equivalent and production of approximately 1 million cubic feet equivalent per day. The acquired 1,300 (925 net) acres are adjacent to its Gwinville Field assets and have an estimated 10 gross horizontal drilling locations. Penn Virginia plans to operate one rig in Mississippi drilling up to 18 (18.0 net) horizontal Selma Chalk wells.

Penn Virginia president and chief executive A. James Dearlove says, “As the natural gas price environment appears to have stabilized in late 2009 and early 2010, we began to increase our drilling activity in two core areas, the Granite Wash and the Lower Bossier (Haynesville) shale, which deliver solid returns. As the result of this resumed drilling, and assuming gas prices do not decrease significantly again, we expect to reverse recent quarterly production declines and deliver sequential production growth during 2010, setting the stage for more meaningful growth in 2011.”

He adds the company has a multi-year inventory of high-quality drilling projects in some various domestic unconventional and resource plays and ample capital resources to develop these projects.

Dearlove says, “Our horizontal drilling success and increased production in these plays over the past two years has positioned us for relatively low-risk, high-return growth in both production and reserves in coming years.”

Penn Virginia has assets in East Texas, Mississippi, the Midcontinent, the Appalachian Basin and the Gulf Coast of Louisiana and Texas.