Wednesday, May 5, 2010

Penn Virginia Slowing Down...For Now

In its first quarter earnings report, Penn Virginia Corp (PVA) noted that it has drilled three wells in the quarter of the year but has been unable to complete them.  This brings to five the company's inventory of still-waiting-to-be-completed wells.  It seems PVA is last in line for high working pressure pumping equipment used in Haynesville well completions after taking some time off from drilling the Haynesville Shale last year.  PVA plans to drill one more Haynesville well before moving its Haynesville rig to Cotton Valley work while its completion inventory is thinned out.  PVA expects to re-start Haynesville drilling operations in the third quarter of 2010. 

The company's 2010 capital budget for the Haynesville Shale is $70 million to drill eight wells.  In the Cotton Valley formation, PVA intends to spend $30 million to drill five wells.  This combined $100 million budget is a $40 million decrease from the $140 million combined budget the company announced in January 2010.  Overall, the company's capex budget has dropped from $350 million to $300 million, so most of that got chipped away from east Texas.

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