Penn Virginia Corporation (“Penn Virginia” or the “Company”) (NASDAQ: PVAC) today announced initial results from its Zebra 6H and 7H wells, updated results for its Lager 3H well and an increase in the borrowing base under its credit facility from $128 million to $200 million.
Penn Virginia recently completed the Zebra 6H and 7H wells on the two-well Zebra pad located in Gonzales County, Texas. These two wells targeted the lower Eagle Ford Shale in the Company’s Area 1 (two-string well casing design) operating area. The wells were drilled approximately 400 feet apart. The Company has a 42.5% working interest and is the operator of each of the two wells.
The Zebra 6H well had a preliminary 24-hour gross initial production (“IP”) rate of 1,269 barrels of oil equivalent per day (“BOEPD”) (89% oil), or 276 BOEPD per 1,000 feet of lateral. The well has 4,592 feet of stimulated lateral and was completed with 27 frac stages spaced 171 feet apart with 2,805 pounds of proppant per foot of lateral.
The Zebra 7H well had a preliminary 24-hour gross IP rate of 1,785 BOEPD (89% oil), or 367 BOEPD per 1,000 feet of lateral. The well has 4,592 feet of stimulated lateral and was completed with 29 frac stages spaced 173 feet apart with 2,846 pounds of proppant per foot of lateral.
The Lager 3H well located in Gonzales County, Texas, which previously reported a 24-hour IP of 2,511 BOEPD, had a 30-day IP of 1,899 BOEPD (73% oil), or 240 BOEPD per 1,000 feet of lateral. The Company has a 41.2% working interest and is the operator. This is the first well that utilized the Company’s slickwater completion design in Area 2 (three string well casing design) of the lower Eagle Ford Shale. Penn Virginia has more than 160 gross drilling locations in Area 2 with spacing ranging from 400 feet to 600 feet between laterals.
Penn Virginia is actively managing the choke size on all three wells in order to maintain pressure, which should ultimately increase recoverable reserves. The two-well Zebra pad and Lager 3H are currently outperforming the Company’s current type curve by 25% or greater. Additionally, given the success of the Lager 3H well, the Company has moved to accelerate drilling in Area 2. The Schacherl-Effenberger pad, which was originally designed as a one-well pad, will now be a two-well pad. These two wells are scheduled to be drilled in fourth quarter of 2017. Additional Area 2 wells are likely to be scheduled to be drilled in 2018.
The Company continues to drill on its eight-well “super pad”, consisting of the two adjacent Chicken Hawk and Jake Berger four-well pads. The Company intends to frac each set of four wells in mid-third quarter utilizing one frac spread, thus increasing efficiency and lowering total costs. Two of the wells are in the upper Eagle Ford Shale/lower Austin Chalk and six wells are in the lower Eagle Ford Shale, testing the “stack and stagger”, completion technique. The wells are in Area 1 and spaced approximately 400 feet apart. The Company plans to stimulate the wells with stage spacing of approximately 170 feet to 200 feet, and 2,500 to 3,000 pounds of proppant per foot of lateral. The wells should be turned to sales in late third quarter.
John A. Brooks, Interim Principal Executive Officer and Chief Operating Officer, commented, “The 30-day IP rate from the Lager 3H exceeded our expectations. Given the strong and sustained production and wellhead pressures from our first test of slickwater completions in Area 2, we plan to drill several additional Area 2 wells this year. We are also pleased with the strong initial performance from our Zebra wells, both of which outperformed our type curve. The success we are seeing is a direct result of our organizational focus on continuously improving our well results. We feel these strong drilling results have further confirmed our operational thesis on our acreage position and support adding a third rig later in 2017 should oil prices recover. Our flexible capital structure allows us to be proactive in this environment and focused on generating attractive rates of return.”
Borrowing Base Redetermination
The Company also announced that the borrowing base under its credit facility was increased from $128 million to $200 million pursuant to its spring 2017 semi-annual borrowing base redetermination. Penn Virginia’s total liquidity is currently estimated at $169 million with $37 million drawn on the credit facility. The next scheduled borrowing base redetermination will be in October 2017.
About Penn Virginia Corporation
Penn Virginia Corporation is an independent oil and gas company engaged in the exploration, development and production of oil, NGLs and natural gas in various domestic onshore regions of the United States, with a primary focus in the Eagle Ford Shale in south Texas. For more information, please visit our website at www.pennvirginia.com.
Certain statements contained herein that are not descriptions of historical facts are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company uses words such as “guidance,” “projects,” “estimates,” “plans,” “expects,” “continues,” “intends,” “believes,” “forecasts,” “future,” and variations of such words or similar expressions to identify forward-looking statements. Because such statements include assumptions, risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements, including the Company’s ability to develop, explore for, acquire and replace oil and natural gas reserves and sustain production, and the Company’s ability to generate profits or achieve targeted reserves in the development and exploratory drilling and well operations. Additional information concerning these risks and uncertainties can be found in Penn Virginia’s press releases and public filings with the SEC. Many of the factors that will determine future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. The statements in this release speak only as of the date of this release. Penn Virginia undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law.