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 company, which drills for oil and gas in Texas, Oklahoma and
Pennsylvania, has been working with Bank of America Corp. to look
for potential buyers, said people familiar with the matter.
Before Wednesday, Penn Virginia's share price had fallen more
than 60% since June, battered by the swift decline in oil prices
since summer. The Radnor, Pa., company currently has a stock market
value of about $444 million, according to FactSet, after its shares
rose 11%, or 67 cents, to $6.87 on Thursday following The Wall
Street Journal's report on the potential sale.
Late Wednesday, Penn Virginia reported fourth-quarter results
that missed Wall Street's expectations. On a call with analysts
Thursday morning, Chief Executive H. Baird Whitehead declined to
discuss the sales efforts. "It's our policy not to comment on these
matters," he said.
Penn Virginia's history dates back to 1882 with its founding 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 reported a fourth-quarter loss of $417.7 million,
or $5.90 a share, compared with a year-earlier loss of $4.1
million, or six cents a share, as the company wrote down the value
of fields in East Texas and Oklahoma. In all, impairments totaled
$667.8 million for the latest quarter.
Revenue fell 13% from a year earlier to $102 million. At year
end, debt stood at about $1.1 billion, the company said in a
securities filing Wednesday.
Penn Virginia said it would dedicate its 2015 budget to drilling
into south Texas shale, where its wells have the best returns. Mr.
Whitehead told analysts that the company may be willing to sell
some gas fields where it has curbed drilling amid a prolonged slump
in prices for the fuel in order to further focus on its south Texas
properties.
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 Virginia for selling convertible
preferred stock and rejecting the Soros firm's suggestion to offer
executives financial incentives 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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