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Penn Virginia Corp. sells off assets in Arkoma basin

Oilfield Technology,

Penn Virginia Corp. is to sell all of its Arkoma Basin properties, together with certain other Mid-Continent properties, to an undisclosed buyer for US$ 30.5 million in cash.

The properties being sold include the Hartshorne coalbed methane and Woodford Shale formations, as well as a number of conventional natural gas play types. The properties are currently producing, on a net basis, approximately 7.8 million ft3/d, approximately 97% of which is natural gas.

As a result of the divestiture, PVA’s 2011 production will decrease by an estimated 0.9 billion ft3 of natural. Estimated proved reserves associated with the divested properties, as determined by PVA’s third party engineers at year-end 2010, were 42.5 billion ft3, 78% of which were proved developed. PVA intends to use the net proceeds from this sale to fund, in part, its 2011 capital expenditure plan, as well as for general corporate purposes.

H. Baird Whitehead, President and Chief Executive Officer, stated, "Our strategy to shift the focus of our capital spending to oil and natural gas liquids made our Arkoma and other Mid-Continent assets appropriate divestiture candidates. The increase in liquidity generated by the sale of these properties will give us further flexibility to help fund investment in our liquids-rich plays, such as the Eagle Ford Shale, that generate higher rates of return and also improve our growth and profitability going forward."

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