Penn Virginia Corp. (NYSE: PVA) announced July 30 that it sold the right to construct and operate a crude oil gathering and intermediate transportation system covering a portion of its Eagle Ford Shale acreage to Republic Midstream LLC for $150 million.

The oil gathering system and an associated central delivery and blending station will be located in Gonzales and Lavaca counties, Texas and are expected to be constructed and operational by mid-2015. Penn Virginia, based in Radnor, Penn., will have a minimum committed volume of 15,000 barrels per day (bbl/d) of oil for 10 years from the dedicated portion of its acreage.

Republic is a joint venture funded by ArcLight Capital Partners LLC that is managed by American Midstream Partners LP (NYSE: AMID) and JP Energy Partners LP. American Midstream Partners and JP are both affiliates of ArcLight.

Penn Virgnia thinks the ability to gather crude oil volumes to a central delivery point, as well as to blend varying qualities of crude oil together, will ultimately benefit its price realizations, offsetting the costs of gathering. Moreover, it will substantially reduce any future capital expenditures related to oil gathering assets. The company will retain its flexibility to market oil volumes both within and outside the dedicated area.

"We are very pleased with the results of this sale, which is another step forward in our efforts to improve our liquidity and fund additional investment and further growth in the Eagle Ford. This transaction, along with the pending sale of our Mississippi assets and the gas gathering sale to AMID in January, brings the total proceeds from 2014 asset sales to $319 million, exceeding our original goal of up to $300 million," said H. Baird Whitehead, Penn Virginia president and CEO, in a statement.

Part of the net proceeds from the sale will be used to repay the outstanding balance on Penn Virgnia's revolving credit facility, and the remainder will be used to help fund its Eagle Ford capital program.

Acquest Advisors LLC was Penn Virginia's financial advisor in connection with the transaction.