Finance & Investing | Capital Markets

Penn Virginia Prices Offering to Fund Eagle Ford Acceleration

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Penn Virginia Corporation has reported the pricing of its private offering to eligible holders of 2,750,000 depositary shares, each representing a 1/100^th interest in a share of 6.00 percent Convertible Perpetual Preferred Stock, Series B with a liquidation preference of $10,000 per share.

PVA has granted the initial purchasers of the depositary shares a 30-day option to purchase up to an additional 500,000 depositary shares. The offering is expected to settle and close on June 16, 2014, subject to customary closing conditions.

PVA estimates that the net proceeds from the offering of depositary shares, after deducting the initial purchasers' discount and estimated offering expenses, will be approximately $264.2 million (or $312.5 million if the initial purchasers exercise their overallotment option to purchase additional shares in full). PVA intends to use the net proceeds from the private offering to finance the acceleration of its development program in the Eagle Ford Shale with the remainder being used to increase its lease acquisition effort in the Eagle Ford Shale.

The Series B Convertible Preferred Stock has a liquidation preference of $10,000.00 per share, which corresponds to $100.00 per depositary share. PVA will pay cumulative dividends, when and if declared, in cash, stock or a combination thereof, on the Series B Convertible Preferred Stock on a quarterly basis at a rate of $600.00 per share (or $6.00 per depositary share), or 6.00 percent, per year and the Series B Convertible Preferred Stock will be convertible at the option of the holder at an initial conversion rate of 545.17 shares of PVA common stock per share (or 5.4517 shares of PVA common stock per depositary share), equivalent to an initial conversion price of approximately $18.34 per share of common stock. The conversion price represents a premium of 30 percent relative to the NYSE closing sale price of PVA common stock on June 10, 2014 of $14.11 per share. Additionally, subject to certain conditions and after certain time periods, PVA may, at its option, cause all or a portion of the Series B Convertible Preferred Stock to be automatically converted into shares of PVA common stock.