Penn Virginia Corporation today announced a 2011 capital expenditures budget of $290 million and also provided initial full-year 2011 guidance.
Penn Virginia intends to focus 2011 capital spending on higher-return play types that are oily or liquids rich and to defer drilling of the gassier, and largely held-by-production, Haynesville Shale and Cotton Valley in east Texas and Selma Chalk in Mississippi.
"We have adjusted our capital spending plans to reflect changing market conditions while continuing to provide production and reserve growth,” said A. James Dearlove, Penn Virginia’s president and chief executive officer. “We believe that our program for 2011 provides new growth opportunities, which will meaningfully increase our oil and liquids production and allow us to succeed in the current commodity price environment.”
The capital budget includes approximately $240 million of development and exploratory drilling and completion expenditures, mostly associated with horizontal drilling, approximately $25 million for leasehold acquisition and approximately $18 million for geological and geophysical expenditures. Capital expenditures in 2011 will primarily target the Granite Wash and other play types in Oklahoma, the Eagle Ford Shale in South Texas and the Marcellus Shale in Pennsylvania.
Approximately $212 million, or 73 percent of the capital budget, relates to oily and liquids rich play types, and we expect that oil and liquids production will constitute 25 to 30 percent of our expected 2011 production, a significant increase from the approximately 17 to 18 percent oil and liquids contribution to production expected in 2010.
About Penn Virginia
Penn Virginia Corporation (NYSE: PVA) is an independent natural gas and oil company focused on the exploration, acquisition, development and production of reserves in onshore regions of the U.S., including Oklahoma, Texas, the Appalachian Basin and Mississippi.
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