Penn Virginia Corp. (PVA) said Aug. 31 it closed the sale of its East Texas assets for about $74 million.
Covey Park Energy LLC purchased the oil and gas acreage in East Texas and North Louisiana from Penn subsidiary Penn Virginia Oil & Gas LP (PVOG). Covey is backed by private equity firm Denham Capital.
The Radnor, Pa.-based company said in a July 15 SEC document it planned to assess its financing and liquidity requirements as 2015 progresses. Pro forma of the divestiture as of July 30, the company had $138 million outstanding under its revolver and financial liquidity of $259 million.
The option to make a deal wasn’t a surprise. Company executives had suggested a potential sale of the asset in the past few months, said Robert Du Boff, analyst, Oppenheimer & Co., in a report.
“The alternative was another drop in Eagle Ford activity, which would further hamper PVA's long-term prospects,” Du Boff said.
Eagle Ford acreage seems an unlikely target for a deal. In June, the company said the Eagle Ford produced 21,400 barrels of oil equivalent per day (boe/d), or 87% of Penn’s total of 24,701 boe/d.
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