RANGER OIL CORPORATI

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Penn Virginia : Barclay's CEO Energy-Power Conference

09/10/2021 | 09:52am

CEO Energy-Power Conference

Darrin Henke

President and Chief Executive Officer

September 10, 2021

IMPORTANT DISCLOSURES

Additional Information and Where To Find It

In connection with the proposed merger (the "Proposed Merger") between Penn Virginia Corporation (together with all predecessors and subsidiaries, "Penn Virginia," "PVAC," "we," "us," "our" or the "Company") and Lonestar Resources US Inc. ("Lonestar" or "LONE"), Penn Virginia intends to file with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 (the "Registration Statement") to register the shares of Penn Virginia's common stock to be issued in connection with the Proposed Transaction. The Registration Statement will include a document that serves as a prospectus and proxy statement of Penn Virginia and a consent solicitation statement of Lonestar (the "proxy statement/consent solicitation statement/prospectus"), and each party will file other documents regarding the Proposed Transaction with the SEC. INVESTORS AND SECURITY HOLDERS OF PENN VIRGINIA AND LONESTAR ARE URGED TO CAREFULLY AND THOROUGHLY READ,

WHEN THEY BECOME AVAILABLE, THE REGISTRATION STATEMENT, THE PROXY STATEMENT/CONSENT SOLICITATION STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY PENN VIRGINIA AND LONESTAR WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PENN VIRGINIA AND LONESTAR, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.

After the Registration Statement has been declared effective, a definitive proxy statement/consent solicitation statement/prospectus will be mailed to shareholders of each of Penn Virginia and Lonestar. Investors will be able to obtain free copies of the Registration Statement and the proxy statement/consent solicitation statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Penn Virginia and Lonestar with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Penn Virginia, including the proxy statement/consent solicitation statement/prospectus (when available), will be available free of charge from Penn Virginia's website at www.pennvirginia.com under the "Investors" tab. Copies of documents filed with the SEC by Lonestar will be available free of charge from Lonestar's website at www.lonestarresources.com under the "Investor Relations" tab.

Participants in the Solicitation

Penn Virginia, Lonestar and certain of their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from Penn Virginia's shareholders and the solicitation of written consents from Lonestar's shareholders, in each case with respect to the Proposed Transaction. Information about Penn Virginia's directors and executive officers is available in Penn Virginia's Annual Report on Form 10-K for the 2020 fiscal year filed with the SEC on March 9, 2021, and its definitive proxy statement for the 2021 annual meeting of shareholders filed with the SEC on April 7, 2021. Information about Lonestar's directors and executive officers is available in Lonestar's Annual Report on Form 10-K for the 2020 fiscal year, as amended, filed with the SEC on April 30, 2021. Other information regarding the participants in the solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Registration Statement, the proxy statement/consent solicitation statement/prospectus and other relevant materials to be filed with the SEC regarding the Proposed Transaction when they become available. Stockholders, potential investors and other readers should read the proxy statement/consent solicitation statement/prospectus carefully when it becomes available before making any voting or investment decisions.

No Offer or Solicitation

This presentation is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

2

Forward-Looking and Cautionary Statements

Forward-Looking and Cautionary Statements

This presentation contains certain "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. Statements that are not historical facts are forward-looking statements, and such statements include, words such as "anticipate," "guidance," "assumptions," "projects," "forward," "estimates," "outlook," "expects," "continues," "intends," "plans," "believes," "future," "potential," "may," "foresee," "possible," "should," "would," "could," "focus" and variations of such words or similar expressions, including the negative thereof, 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. These risks, uncertainties and contingencies include, but are not limited to, the following: risks related to the proposed acquisition of Lonestar, including the risk that acquisition will not be completed on the timeline or terms currently contemplated, that the benefits of the acquisition may not be fully realized or may take longer to realize than expected, and that management attention will be diverted to transaction-related issues; risks related to the recently completed transactions with Juniper, including the risk that the benefits of the transactions may not be fully realized or may take longer to realize than expected, and that management attention will be diverted to integration-related issues; risks related to potential and completed acquisitions, including related costs and our ability to realize their expected benefits; the decline in, sustained market uncertainty of, and volatility of commodity prices for crude oil, natural gas liquids, or NGLs, and natural gas; the impact of the COVID-19 pandemic, including reduced demand for oil and natural gas, economic slowdown, governmental actions, stay-at- home orders, interruptions to our operations or our customer's operations; risks related to and the impact of actual or anticipated other world health events; our ability to satisfy our short-term and long-term liquidity needs, including our ability to generate sufficient cash flows from operations or to obtain adequate financing, including access to the capital markets, to fund our capital expenditures and meet working capital needs; our ability to access capital, including through lending arrangements and the capital markets, as and when desired; negative events or publicity adversely affecting our ability to maintain our relationships with our suppliers, service providers, customers, employees, and other third parties; plans, objectives, expectations and intentions contained in this presentation that are not historical; our ability to execute our business plan in volatile and depressed commodity price environments; our ability to develop, explore for, acquire and replace oil and gas reserves and sustain production; changes to our drilling and development program our ability to generate profits or achieve targeted reserves in our development and exploratory drilling and well operations; our ability to meet guidance, market expectations and internal projections, including type curves; any impairments, write-downs or write-offs of our reserves or assets; the projected demand for and supply of oil, NGLs and natural gas; our ability to contract for drilling rigs, frac crews, materials, supplies and services at reasonable costs; our ability to renew or replace expiring contracts on acceptable terms; our ability to obtain adequate pipeline transportation capacity or other transportation for our oil and gas production at reasonable cost and to sell our production at, or at reasonable discounts to, market prices; the uncertainties inherent in projecting future rates of production for our wells and the extent to which actual production differs from that estimated in our proved oil and gas reserves; use of new techniques in our development, including choke management and longer laterals; drilling, completion and operating risks, including adverse impacts associated with well spacing and a high concentration of activity; our ability to compete effectively against other oil and gas companies; leasehold terms expiring before production can be established and our ability to replace expired leases; environmental obligations, costs and liabilities that are not covered by an effective indemnity or insurance; the timing of receipt of necessary regulatory permits; the effect of commodity and financial derivative arrangements with other parties, and counterparty risk related to the ability of these parties to meet their future obligations; the occurrence of unusual weather or operating conditions, including force majeure events; our ability to retain or attract senior management and key employees; our reliance on a limited number of customers and a particular region for substantially all of our revenues and production; compliance with and changes in governmental regulations or enforcement practices, especially with respect to environmental, health and safety matters; physical, electronic and cybersecurity breaches; uncertainties relating to general domestic and international economic and political conditions; the impact and costs associated with litigation or other legal matters; sustainability initiatives; and other risks set forth in our filings with the SEC, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Additional Information concerning these and other factors can be found in our press releases and public filings with the SEC. Many of the factors that will determine our future results are beyond the ability of management to control or predict. In addition, 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 presentation speak only as of the date of the presentation. We undertake 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. Expected results of the completed period are preliminary and subject to change until published in our Quarterly Report on Form 10-Q filed with the SEC.

Definitions - Special Note on PV-10 Calculations

Proved reserves are those quantities of oil and gas which, by analysis of geosciences and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulation before the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether the estimate is a deterministic estimate or probabilistic estimate. Proved developed reserves are proved reserves that can be expected to be recovered: (a) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared with the cost of a new well; or (b) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is means not involving a well. EUR is a measure that by its nature is more speculative than estimates of reserves prepared in accordance with SEC definitions and guidelines and accordingly is less certain. Proved developed producing and total proved reserves for PVAC presented herein are based on reserve reports from DeGolyer and MacNaughton ("D&M") as of 7/1/2021 and 4/1/2021, respectively (the "D&M reports"). Proved reserves for LONE presented herein are based on a reserve report from W.D. Von Gonten & Co. ("WDVG") as of 1/1/2021 (the "WDVG Report"). PV-10 of PVAC is based on such D&M reports as of 06/30/21 and updated for strip pricing as of 7/9/21. PV-10 of LONE is based on the WDVG Report as of 01/01/21 and adjusted by PVAC management for actual production, lease operating and transportation costs through 07/01/21 as well as the revised actual and anticipated development plans post-07/01/21, and using strip pricing as of 7/9/21. These "PV-10" metrics represent estimates for illustrative purposes and is a non-GAAP measures.

Cautionary Statements

The estimates and guidance presented in this presentation, including those regarding inventory of drilling locations and expected free cash flow, are based on assumptions of capital expenditure levels, prices for oil, natural gas and NGLs, current indications of supply and demand for oil, well results and operating costs. The guidance, estimates and type curves provided or used in this presentation do not constitute any form of guarantee or assurance that the matters indicated will be achieved. Statements regarding inventory are based on current information, assumptions regarding well costs, the drilling program and economics and are subject to material change. The number of locations shown as being in the Company's current estimated inventory or estimated combined inventory is not a guarantee of the number of wells that will actually be drilled and completed or the results or return that will be achieved. While we believe these estimates and the assumptions on which they are based are reasonable, they are inherently uncertain and are subject to, among other things, significant business, economic, operational and regulatory risks and uncertainties and are subject to material revision. Actual results may differ materially from estimates and guidance.

Information presented about the two companies on a combined basis is not meant to be a representation of the combined business or performance of the companies following the closing of the Proposed Merger.

Non‐GAAP Financial Measures

This presentation contains references to certain non‐GAAP financial measures. The non-GAAP financial measures presented may not provide information that is directly comparable to that provided by other companies, as other companies may calculate such financial results differently. Penn Virginia's or Lonestar's non-GAAP financial measures are not measurements of financial performance under GAAP and should not be considered as alternatives to amounts presented in accordance with GAAP. Penn Virginia or Lonestar views these non-GAAP financial measures as supplemental and they are not intended to be a substitute for, or superior to, the information provided by GAAP financial result.

More Information Regarding LONE's Non-GAAP Measures

We have included certain of LONE's non-GAAP measures in this presentation, but we have not sought to independently verify this financial information. No assurance can be given of this information's accuracy or the accuracy and completeness of the reconciliations to the most directly comparable GAAP measures provided in LONE's publicly available disclosures.

Net Debt, excluding unamortized discount and debt issuance costs, is a non-GAAP financial measure that is defined as total principal amount of long-term debt less cash and cash equivalents. LONE's principal amount of long-term debt used to calculate Net Debt excludes its non- recourse mortgage on its corporate office building and the PPP loan for which funds are fully reserved as restricted cash to cover the balance. LTM Leverage, a non-GAAP measure, is defined as Net Debt divided by Adjusted EBITDAX. The ratios are derived from the historical periods as reported in the respective Quarterly Reports on Forms 10-Q and Annual Report on Form 10-K for the relevant periods. With respect to LONE's LTM Leverage at June 30, 2021, the ratio includes five months of the Predecessor period prior to emerging from bankruptcy and seven months of the successor period following the emergence (the predecessor and successor periods are defined as reported in Lonestar's Form 10-K for the year ended December 31, 2020. We have not reconciled the components of LONE's LTM Leverage, Net Debt and Adjusted EBITDAX, to the most comparable GAAP measure. This reconciliation would require unreasonable efforts as the amounts are currently based). For the second quarter 2021, LONE's Net Debt and Adjusted EBITDAX were derived from actual 10-Q results.

3

PVAC Investment Thesis

Premier Oil

Strong PDP

High

Strong

Leadership

Advantaged

Base with

Margin /

Balance

Regulatory and

Weighted

Substantial

Improving

Sheet /

in ESG

Infrastructure

Asset

Inventory

Efficiency

Liquidity

Position

Focused on Cash-on-Cash Returns and Committed to Continuous Improvement

4

PVAC Company Overview

Premier Oil

Strong PDP Base with

High Margin /

Strong Balance

Leadership

Advantaged Regulatory

Weighted Asset

Substantial Inventory

Improving Efficiency

Sheet / Liquidity

in ESG

and Infrastructure Position

  • NASDAQ: PVAC - Enterprise Value: $1,087 MM(1)
  • 102,400 gross (90,400 net) acres(2) in Gonzales, Fayette, Lavaca and DeWitt counties; ~100% Operated; 91% HBP
  • Approximately 500 identified drilling locations in inventory with significant identified upside potential
    • 500 locations estimated to average 50%+ well level IRR at $60/bbl WTI(3)
    • Two-thirdsof locations estimated to average 65%+ well level IRR at $60/bbl WTI(3)
  • 2Q21 sales: 20,117 bbl/d and 24,844 boe/d; 81% oil / 92% liquids
  • Top quartile Adjusted EBITDAX(4)(5) margins
  • Net Debt(4) to LTM adjusted EBITDAX(4) ~1.3x(6)
  • Advantaged regulatory position
    • No Federal acreage; Assets on private fee lands in Texas
  • Located close to Gulf Coast Markets (MEH/LLS)
    • Advantaged pricing and market access

Eagle Ford

Houston (HQ)

Oil

Condensate

Gas

Reserves Summary ($MM)

$49.78/WTI $2.43/MMBtu

$60/WTI $2.75/MMBtu

SEC Pricing (7)

Pricing (7)

Proved Developed ("PD") PV-10(4)

$818

$1,055

PD PV-10 to Net Debt(4)(8)

2.4x

3.2x

1)

Net debt as of 06/30/21, share price as of 09/03/21 and shares of common stock and common stock equivalents outstanding of 37,861,271 as of June 30, 2021 (as further described in the 2nd quarter 2021 Form 10-Q).

2)

As of 06/30/21.

3)

Estimated well level returns based on D&M type curves as of 01/01/21.

4)

Adjusted EBITDAX, as further adjusted for the Juniper Transaction ($3.5 MM), Net Debt and PV-10 are non-GAAP financial measures that are defined and reconciled in the appendix of this presentation.

5)

Source: FactSet. Companies include: APA, AR, BATL, BCEI, BRY, CDEV, CLR, CNX, COG, CPE, CRK, DVN, EOG, EQT, ESTE, FANG, LPI, MCF, MGY, MTDR, NOG, PDCE, PXD, RRC, SBOW, SM, SWN, WLL and XEC for 2020

and first quarter of 2021.

5

6)

Leverage ratio is calculated by dividing Net Debt as of 06/30/21 by LTM Adjusted EBITDAX as of 06/30/21 as adjusted for the Juniper transaction.

7)

Based on reserve report from D&M as of 06/30/21.

8)

Net Debt as of 06/30/21.

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Disclaimer

Penn Virginia Corporation published this content on 10 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 September 2021 13:51:03 UTC.

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