The last twelve months have not been kind to smaller gas-focused E&P companies. With strong production across the country, prices are as low as they've been in almost three years and many companies continue to drill so as to hold onto leases. Making matters worse, exploiting shale gas formations requires considerably more expensive wells and procedures, and energy service companies like Halliburton (NYSE:HAL) have not been in a hurry to cut prices. All in all, it has been an ugly set-up and an ugly market for Penn Virginia (NYSE:PVA).
In the Right Places
At first glance, it would seem that Penn Virginia has focused on the right markets. The company has a large position in the Eagle Ford region of Texas, an area that has attracted noteworthies like Apache (NYSE:APA), Exxon Mobil (NYSE:XOM) and CNOOC (NYSE:CEO). Penn Virginia also operates in well-known productive regions like the Granite Wash of Oklahoma and Pennsylvania's Marcellus, as well as holding positions in the Texas/Louisiana Haynesville shale. (For related reading, see Oil And Gas Industry Primer.)
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