Thursday, October 2, 2008

Haynesville Shale: Penn Virginia ( PVA ) Update 10/02/08

Penn Virginia ( PVA ) came out today and gave operational guidance specifically on the Haynesville Shale.

A. James Dearlove, President and Chief Executive Officer of PVA, commented, "In spite of the reduced guidance levels for 2008, our growth strategy remains intact in all of our significant resource plays. The reduced 2008 guidance is largely the result of a number of unanticipated circumstances, including the effects of two hurricanes which impacted our largest producing region in East Texas. In addition, we are accelerating the transition from an exclusive vertical Cotton Valley development program in East Texas, which was supported by six drilling rigs at the beginning of 2008, to the current combination of four to five rigs drilling horizontal Lower Bossier (Haynesville) Shale wells and two to three rigs drilling vertical Cotton Valley wells. The near-term effect of this transition is a delay of production contributions from the horizontal shale drilling program, which has much longer spud-to-production lead time relative to vertical Cotton Valley wells. Even though this decision has affected near-term production growth, the benefits of expected superior economic returns and accelerated long-term production growth favor this approach, as reflected in our preliminary 2009 guidance.”

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