SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X]	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 30, 2000 or [ ]	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from 	 to 	PENN VIRGINIA CORPORATION 	(Exact name of registrant as specified in its charter) 	Virginia	23-1184320 	(State or other jurisdiction of	(I.R.S. Employer 	incorporation or organization) 	Identification No.) 	100 MATSONFORD ROAD SUITE 200 	RADNOR, PA		19087 	(Address of principal executive offices)	(Zip Code) 	(610) 687-8900 	(Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 	Yes	 X 	No Number of shares of common stock of registrant outstanding at August 2, 2000: 8,191,281 PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME - unaudited (in thousands, except share amounts) 	Three Months 	Six Months 		 Ended June 30,		 	Ended June 30, 	 	2000		 	1999 		 	 2000 			1999 				 Revenues: Natural gas 		$	10,374 	$	4,498	 $ 17,463	$	8,880 Oil and condensate		 236		 110 		421 		165 Coal royalties 		5,657 		4,242 	11,303 		7,974 Timber			 	727 		292 		1,175 		506 Dividends		 	662	 	661	 	1,323	 	1,323 Gain on sale of property	 	-	 	- 98 		- Other income	 	910	 	634	 	2,926 	1,098 	Total revenues	 	18,566 	10,437		 34,709 	19,946 Expenses: Operating expenses 		1,167 		1,079	 	2,341 		2,003 Exploration expenses	 	871	 	589	 	1,395	 	674 Taxes other than income 		956	 	623	 	1,869 		1,323 General and administrative	 	2,446	 	2,145	 	5,042 		4,147 Depreciation, depletion, amortization		 2,903	 	1,959 	5,468 	3,922 	Total expenses 		8,343 		6,395	 	16,115		12,069 Operating Income	 	10,223 		4,042	 	18,594 		7,877 Other (Income) Expense: Interest expense 		1,765	 	508	 	3,264 		1,071 Other income	 	(352)	 	(356)	 	(708)	 	(721) Income before income tax 	 	8,810	 	3,890 		16,038	 	7,527 Income tax expense 	2,628 	725	 	4,513	 	1,447 Net Income		 $	6,182	 $	3,165 $	11,525	$	6,080 Net Income per share, basic	 	0.75	 	0.38	 	1.41	 	0.72 Net Income per share, diluted	 	0.74	 	0.37 		 1.40 	0.72 Weighted average shares outstanding	 	8,193	 	8,410	 	8,147 		8,391 The accompanying notes are an integral part of these condensed consolidated financial statements. PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) 			 June 30, December 31, 			 2000 1999 		 	 (unaudited) ASSETS Current assets Cash and cash equivalents 				 	$ 	- 	$ 657 Accounts receivable	 				 	9,474	 	6,880 Current portion of long-term notes receivable			 		83	 	816 Current deferred income taxes	 				 	155	 	155 Other				 		627 		813 	Total current assets		 				11,092 		9,321 Investments 						49,212	 	67,816 Long-term notes receivable	 					3,039 		3,518 Oil and gas properties; wells and equipment, using	the successful efforts method of accounting	 				230,022 		185,048 Other property, plant and equipment 					83,511	 	82,772 	Less: Accumulated depreciation, 	depletion and amortization (81,795) (76,553) 	Total property, plant and equipment 231,738	 191,267 Other assets	 					1,867	 	2,089 	Total assets	 $296,948	 	$274,011 The accompanying notes are an integral part of these condensed consolidated financial statements. PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands) June 30, December 31, 2000 1999 	 			(unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current installments on long-term debt			 		$	34	 $	34 Accounts payable 						1,655 		1,570 Accrued expenses 		 				5,797 		5,470 Income taxes payable				 		1,447 		- Short-term debt		 				2,547	 	- 	Total current liabilities 	11,480	 	7,074 Other liabilities		 				5,445 		5,854 Deferred income taxes			 			23,019	 	28,265 Long-term debt	 				 	110,958 		78,475 	Total liabilities			 		 	150,902	 	119,668 Commitments and contingencies			 			- 		- Shareholders' equity Preferred stock of $100 par value- 	100,000 shares authorized; none issued			 			- 		- Common stock of $6.25 par value - 16,000,000 shares authorized; 	 8,921,864 shares issued					 	55,762 		55,762 Other paid-in capital				 		7,951	 	8,096 Retained earnings		 				68,711 		60,860 Accumulated other comprehensive income					29,924 	 	42,017 						162,348 		166,735 Less: Treasury stock, at cost - 747,812 shares in 1999 	and 498,236 in 1999					 	15,152 		11,142 	Unearned compensation - ESOP			 			1,150	 	1,250 	Total shareholders' equity			 146,046	 154,343 Total liabilities and shareholders' equity $296,948 $ 274,011 The accompanying notes are an integral part of these condensed consolidated financial statements. PENN VIRGINIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED CASH FLOW STATEMENTS-unaudited (in thousands) 	 	Three Months Six Months 	 	Ended June 30,	 Ended June 30, 		 2000	 		1999 	2000 1999 Cash flow from operating activities: Net Income 	$	6,182 $	3,165 	$	11,525 	$	6,080 Adjustments to reconcile net income to net	cash provided by operating activities: Depreciation, depletion, and amortization 	2,903 	1,959 	 	5,468 		3,922 Gain on sale of property, plant and equipment 	-		 - 		(98) 		- Deferred income taxes 		708	 	(106) 		1,266		 237 Dry hole expense 		402 		120		 409 		120 Other		 (307) 		(326) 		(630)	 	(655) Changes in operating assets and liabilities: Current assets 		(2,733)		 (2,149) 		(2,409)		 829 Current liabilities	 	1,179 		671	 	1,859 	(2,144) Other assets		 87 		3		 165 		5 Other liabilities	 	188 	(96) 	(409) 		491 	Net Cash provided by 	 operating activities 	8,609 3,241 17,146 		8,885 Cash flows from investing activities: Proceeds from notes receivable		 583	 	418		 1,143 		835 Proceeds from sale of fixed assets 		7 		-	 	107	 	- Capital expenditures	 	(43,349)	 	(3,200) 	(46,350)	 	(4,835) 	 Net Cash used in investing activities 	(42,759) 	(2,782)	 	(45,100) 		(4,000) Cash flows from financing activities: Dividends paid	 	(1,830)	 	(1,895) 		(3,678) 		(3,778) Debt borrowings (repayments)		35,036 		288 	35,030 		(2,287) Purchase of treasury stock 		- 		-	 (5,056) 		- Issuance of stock 	 	944	 	771 	 	1,001 		1,068 	Net Cash used in 	financing activities	 	34,150 	(836) 	27,297 	$(4,997) Net increase (decrease) in cash 	and cash equivalents	 $	-	 $	(377)	 $	(657) 	$	(112) Cash and cash equivalents-beginning 	- 	 	490	 	657	 	225 Cash and cash equivalents-ending	 $ - 	 $	113	 $ 	- $ 113 Supplemental disclosures of cash flow information: Interest paid 	$	1,333 	$	480 	$	2,935 	$		1,065 Income taxes paid 	 	1,800 	 	1,000	 	1,800		 	1,600 The accompanying notes are an integral part of these condensed consolidated financial statements. PENN VIRGINIA CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 (1)	ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements of Penn Virginia Corporation and its subsidiaries (the "Company") have been prepared in accordance with accounting principals generally accepted in the United States for interim financial reporting and Securities and Exchange Commission regulations. These statements involve the use of estimates and judgments where appropriate. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the Company's consolidated financial statements and footnotes included in the Company's December 31, 1999 annual report on Form 10-K. Operating results for the six months ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000. (2)	SECURITIES The cost, gross unrealized holding gains or losses and market value for available-for-sale securities at June 30, 2000 were as follows (in thousands): 		 	Gross Unrealized Market 		 	Cost	 		Holding Gain	 	Value 		 Available-for-Sale: Norfolk Southern Corporation	 $	2,839 	$	46,356 	$	49,195 Other	 	- 		17	 	17 	$	2,839 	$	46,373 	$	49,212 (3)	LEGAL The Company is involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these cannot be predicted with certainty, Company management believes these claims will not have a material effect on the Company's financial position, liquidity or operations. (4)	EARNINGS PER SHARE The following is a reconciliation of the numerators and denominators used in the calculation of basic and diluted earnings per share ("EPS") for income from continuing operations at June 30, 2000 and 1999. Three Months Ended 	Three Months Ended June 30, 2000 		 	June 30, 1999 Income 	 Shares 	Per Share 	Income 	Shares 	Per Share 		 (Numerator) (Denominator) Amount 	(Numerator) (Denominator) 	Amount 		(in thousands except per share amounts) Basic EPS: Income from 	continuing operations	$	6,182		 8,193 	$	0.75 	$ 3,165 		8,410 	$	0.38 Dilutive Securities: Stock options	 	-		 	132			 	- 	80 Diluted EPS: Income from 	continuing operations	$	6,182	 	8,325 	$	0.74 	$	3,165 		8,490 	$	0.37 		Six Months Ended 	Six Months Ended 	June 30, 2000 	 		June 30, 1999 			 Income 	Shares	 Per Share 	Income	 Shares	 Per Share 		 	(Numerator) (Denominator)	Amount 	(Numerator)	(Denominator)	Amount 		(in thousands except per share amounts) Basic EPS: Income from 	continuing operations 	$	11,525	 	8,147 	$	1.41 	$	6,080		 8,391 	$	0.72 Dilutive Securities: Stock options	 	-			 61			 	-	 	78 Diluted EPS: Income from 	continuing operations 	$	11,525 	8,208 	 $	1.40 	$	6,080 		8,469 	$	0.72 (5) COMPREHENSIVE INCOME Comprehensive income represents all changes in equity during the reporting period, including net income and charges directly to equity, which are excluded from net income. For the three and six month periods ended June 30, 2000 and 1999, the components of comprehensive income are as follows: 	Three Months 	Six Months 	 	Ended June 30,	 		Ended June 30, 		2000	 	 	1999			 2000	 1999 					 	(in thousands) Net income		 $	6,182 	$ 3,165 	$	11,525 	$	6,080 Unrealized holding gains (losses), net of tax of $722, $4,341, $(6,511), and $(1,809), respectively	 	1,340 		8,061 		(12,093) 		(3,359) Comprehensive income (loss) 	$	7,522 	$	11,226 	$	(568) 	$	2,721 (6) 	SEGMENT INFORMATION Penn Virginia's operations are classified into two operating segments: Oil and Gas - crude oil and natural gas exploration, development and production. Coal Royalty and Land Management - the leasing of mineral rights and subsequent collection of royalties and the development and harvesting of timber. 		 	Coal Royalty and Land Corporate 			 Oil and Gas Management and Other Consolidated 	(in thousands) For the six months ended June 30, 2000 	Revenues		 $ 18,205 	$	15,182	 $ 	1,322 $	34,709 	Operating income (loss) 	7,863 12,121 	 (1,390) 	 18,594 	Other income and expense, net	 		 		2,556 For the six months ended June 30, 1999 Revenues		 $ 9,494 	 $ 9,129 $ 	1,323 $ 19,946 Operating income (loss)		1,671 	7,083	 (877) 	7,877 	 Other income and expense, net 					350 Identifiable assets June 30, 2000	 	165,690 	81,856 	49,402 	296,948 December 31, 1999	 120,954 	83,975	 69,082	 274,011 Operating income is total revenue less operating expenses. Operating income does not include certain other income items, gain (loss) on sale of securities, unallocated general corporate expenses, interest expense and income taxes. Identifiable assets are those assets used in the Company's operations in each segment. Corporate assets are principally cash and marketable securities. (7)	ACQUISITIONS 	In May 2000, Penn Virginia successfully completed the purchase of over 35 Bcf of proved natural gas reserves in West Virginia, Virginia and Kentucky for $35.0 million. In September 1999, the Company acquired fee mineral and lease rights for coal reserves and related assets in West Virginia. Both acquisitions were funded by borrowings from the Company's revolving credit facility (the "Revolver") and accounted for at fair value. The operations have been included in the Company's statement of income as of the closing date. The following unaudited pro forma results of operations have been prepared as though the aforementioned acquisitions had been completed on January 1, 1999. The unaudited pro forma results of operations consist of the following as of June 30 (in thousands, except share data): 	Three Months	 Six Months 	 	Ended June 30, 1999			Ended June 30, 2000 	2000 		1999 	 	2000 	1999 	Revenues 	$ 19,640 	$	12,958 	 $	37,052 	$	24,708 	Net income 	$ 	6,475 $ 	3,337 	 $	11,989 	$ 	6,587 	Net income per share, diluted	 $ 	0.78 	$ 		0.39 	 $ 	1.46 	$	 0.78 The summarized pro forma information has been prepared for comparative purposes only. ITEM 2. 	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 	The Company operates in two business segments: oil and gas, and coal royalty and land management. The oil and gas segment explores for, develops and produces crude oil and natural gas in the eastern and southern portions of the United States. The coal royalty and land management segment includes Penn Virginia's mineral rights to coal reserves, its timber assets and land assets. The Company earns coal royalty revenue, based on long- term lease agreements with several coal mining operators which generally require royalty payments to Penn Virginia based on a minimum annual payment, a minimum dollar royalty per ton and/or percentage of the coal's selling price. The Company does not operate coal mines. On May 31, 2000, the Company successfully completed the purchase certain oil and gas mineral rights in West Virginia, Virginia and Kentucky for $35.0 million. The acquisition was funded by borrowings from the Company's revolving credit facility and estimated proved reserves, net to the Company's interests, exceed 35 Bcfe. Results of Operations - Second quarters of 2000 and 1999 Compared. Penn Virginia reported 2000 second quarter earnings of $6.2 million, or $0.74 per share (diluted), compared with $3.2 million, or $0.37 per share (diluted), for the second quarter of 1999. On a consolidated basis, revenues increased $8.1 million in the second quarter of 2000 primarily from increases in natural gas revenues and coal royalty revenues. Expenses on a consolidated basis were $1.9 million higher in the first half of 2000 than the 1999 comparable period. Results of Operations - Six months of 2000 and 1999 Compared. Penn Virginia reported 2000 six months earnings of $11.5 million, or $1.40 per share (diluted), compared with $6.1 million, or $0.72 per share (diluted), for the same period of 1999. On a consolidated basis, revenues increased $14.8 million, primarily from increases in natural gas revenues and coal royalty revenues. Expenses on a consolidated basis were $4.0 million higher than the 1999 comparable period. Selected operating and financial data by segment is presented below. Oil and Gas Operating income for the oil and gas segment was $5.3 million and $7.9 million for the three and six months ended June 30, 2000, compared with $0.8 million and $1.7 million for the respective periods in 1999. Operational and financial data for the Company's oil and gas segment for the 2000 and 1999 three and six months ended June 30 is summarized in the following tables: Operations Summary 	Three Months	 Six Months 	 	Ended June 30, 			Ended June 30, 		 2000		 	1999	 		2000		 1999 Production Natural gas (MMcf)	 	2,835 	2,043 	 	 5,332 		4,082 Oil and condensate (MBbls) 	 	10		 9 		17 		16 Production, MMcfe 		2,895 		2,097 		5,434		 4,178 Average Realized Prices Natural gas ($/Mcf)	 $ 	3.66 	$ 	2.20 	$	3.28	 $ 	2.18 Oil and condensate ($/Bbl)	 	23.70	 	12.59	 	24.76	 	10.55 Average Costs (per MMcfe) Lease operating	 	$ 	0.36 	$	0.50	 $	0.39 	$	0.47 Exploration expenses	 	0.26 		0.20 		0.22 		0.11 Taxes other than income		 0.27	 	0.22	 	0.26 		0.25 General and administrative	 	0.21 		0.25 		0.22	 	0.25 Depreciation, depletion and amortization		 0.82 	0.79 		0.81	 	0.79 	 Total costs 	$	1.92 	$	1.96 	$	1.90 	$	1.87 In the first half of 2000, over 85 percent of Penn Virginia's natural gas production was sold at market prices. Currently, the Company has fixed price term contracts totaling 9,300 Mcf per day which began in April and May of 2000 and expire in December 2000 and March 2001 at an average of $3.39 per Mcf. The Company anticipates these fixed price term contracts should account for approximately one-fourth of remaining 2000 production. The Company will, when circumstances warrant, hedge the price received for market-sensitive production through the use of swaps with purchased options. If applicable, gains and losses from hedging activities are included in natural gas revenues when the hedged production occurs. Currently, the Company is not involved in any such hedging activities; however, the Company recognized a $0.2 million hedging loss and a $0.1 million hedginig gain for the three and six months ended June 30, 1999, respectively. The following table shows the effect of hedging activities on the Company's working interest natural gas prices: Hedging Summary 	Three Months 	Six Months 		Ended June 30,		 Ended June 30, 	 	2000	 		1999	 		2000 	 1999 Natural gas prices ($/Mcf): Actual price received for production $ 3.66 	$	2.28	 $	3.28 $	2.16 Effect of hedging activities 		- 	 	(0.08) 		- 		0.02 Average price 	$	3.66 	$	2.20 	$	3.28	 $	2.18 Financial Summary 	Three Months 	Six Months 	 	Ended June 30, 			Ended June 30, 	 	2000 			1999 		2000 	 		1999 					 	(in thousands) Revenues: Natural gas sales 	$ 	10,374 	$ 4,498 	$ 17,463 	$	8,880 Oil and condensate	 	236	 	110 		421	 	165 Other income	 	187	 	310		 321	 	449 	Total revenues 	$	10,797 	$	4,918 	$	18,205 	$	9,494 Expenses: Operating expenses $ 1,039 	$	1,045 	$	2,102 	$	1,952 Exploration expenses	 	762	 	424 		1,180	 	448 Taxes other than income	 	775		 468 	1,426 		1,031 General and administrative	 	605	 	524	 	1,215		 1,063 Depreciation and depletion	 	2,361	 1,655 	 	4,419 		3,329 	Total expenses	 	5,542	 	4,116 		 10,342 		7,823 Operating Income 	$	5,255 $	802 	$	7,863 	$	1,671 Results of Operations - Oil and Gas Segment Revenues. Revenues increased $5.9 million, or 120 percent, to $10.8 million in the second quarter of 2000, compared with $4.9 million for the same period of 1999. Revenue for the first half of 2000 increased $8.7 million, or 92 percent, to $18.2 million from the comparable 1999 amount. These increases were a direct result of increased natural gas production and prices. Natural gas sales increased $5.9 million, or 131 percent, in the second quarter of 2000 and $8.6 million, or 97 percent for the six months ended June 30, 2000, compared with 1999 amounts. Natural gas production for the second quarter of 2000 increased 39 percent over the comparable 1999 period while the average price received increased 66 percent to $3.66 per thousand cubic feet (Mcf) for the same periods. Natural gas production for the first half of 2000 increased 31 percent over the comparable 1999 period while the average price received increased 50 percent to $3.28 per Mcf for the same periods. Oil and condensate revenues increased to $236,000 and $421,000 for the three and six months ended June 30, 2000 from $110,000 and $165,000 for the comparable periods in 1999. These fluctuations are attributable to the volatility in average prices received. While volumes remained relatively constant, prices increased 88 percent to $23.70 in the second quarter of 2000 and increased 135 percent to $24.76 for the six months ended June 30, 2000, compared with the respective 1999 amounts. Expenses. Expenses for the oil and gas segment increased to $5.5 million and $10.3 million for the three and six months ended June 30, 2000, respectively, compared with $4.1 million and $7.8 million for the same periods in 1999. Lease operating expenses decreased to $0.36 and $0.39, on a Mcfe basis, for the three and six months ended June 30, 2000 from $0.50 and $0.47 for the same periods in 1999. The decrease was due to lower operating costs associated with the Company's Mississippi properties, the Company's recent $35.0 million acquisition of royalty gas, and to several repair and maintenance projects performed in June 1999. Exploration expenses increased to $762,000 and $1.2 million for the three and six months ended June 30, 2000 from $424,000 and $448,000 for the same periods in 1999. These increases are a result of seismic expenditures and two gross (0.4 net) nonproductive, exploratory wells associated with the Company's Texas onshore gulf coast exploration project. Taxes other than income increased 66 percent to $775,000 in the second quarter of 2000, compared with $468,000 in the same period of 1999. For the six months ended June 30, 2000, taxes other than income increased 38 percent, to $1.4 million, from the comparable 1999 amount. On a Mcfe basis, taxes other than income has remained relatively constant at $0.26 for the first six months of 2000, compared with $0.25 for the same 1999 period. General and administrative expenses increased 15 percent to $605,000 in the second quarter of 2000, compared with $524,000 in the same period of 1999. For the six months ended June 30, 1999, general and administrative expenses increased 14 percent, to $1.2 million, from the comparable 1999 amount. On a Mcfe basis, general and administrative expenses decreased to $0.22 for the first half of 2000 versus $0.25 for the comparable 1999 period. The Company has increased its oil and gas technical and administrative staff in conjunction with planned increases in oil and gas development activity. Depreciation and depletion increased to $2.3 million and $4.4 million for the three and six months ended June 30, 2000, compared with $1.7 million and $3.3 million for the same periods in 1999. Depreciation and depletion, on a Mcfe basis, remained relatively constant at $0.81 for the six months ended June 30, 2000, compared with $0.79 for the same period in 1999. Coal Royalty and Land Management Operating income for the coal segment was $12.1 million for the six months of 2000 and $7.1 million for the comparable period of 1999. The coal segment's operational and financial data for the 2000 and 1999 second quarter and six month period is summarized in the following tables: Operations Summary 	Three Months 	Six Months 	 	Ended June 30,		 	Ended June 30, 		2000	 		1999 		 	2000 	1999 Production Coal tons (000's)	 	3,221	 	2,043 		6,216 		3,749 Timber (Mbf)	 	3,134 		1,577	 	4,992 		2,691 Average Realized Prices Coal royalties ($/ton) 	$	 1.76 $ 2.08 	$	1.82	 $	2.13 Timber ($/Mbf)		 218	 	178		 	217 	175 Financial Summary 	Three Months 	Six Months 	 	Ended June 30,	 	Ended June 30, 	 	2000		 	1999	 	2000 		 	1999 	(in thousands) Revenues: Coal royalties 	$ 5,657	 $ 4,242 	$	11,303 	$	7,974 Timber sales			 727		 292 		1,175		 506 Gain on sale of property	 	- 	- 	 	98 		- Other income 		725	 	322 		2,606 		649 	Total revenues	 	7,109 		4,856 		15,182	 	9,129 Expenses: Operating expenses 	$	128 	$	34 	$	239 $	51 Exploration expenses	 	93	 	21	 	151 		65 Taxes other than income 		155 	109 		 330	 	214 General and administrative	 	624	 	601 		1,314	 	1,183 Depreciation and depletion	 	531	 	273 		1,027	 	533 	Total expenses	 	1,531 	1,038 	 	3,061 		2,046 Operating Income 	$	5,578 $ 3,818 	$	12,121 	$	7,083 Results of Operations - Coal Royalty and Land Management Segment Revenues. Revenues increased 45 percent to $7.1 million in the second quarter of 2000 and 67 percent to $15.2 million for the first six months of 2000, compared with $4.9 million and $9.1 million for the same periods in 1999. Coal royalties increased $1.4 million to $5.7 million in the second quarter of 2000 and $3.3 million to $11.3 million for the first six months of 2000, compared with the same periods in 1999. These increases are attributable to enhanced production from existing lessees due to the completion of the Company's unit train loadout facility as well as the September 1999 acquisition of coal reserves in West Virginia. Timber sales increased $435,000 to $727,000 in the second quarter of 2000 and $669,000 to $1.2 million for the first six months of 2000, compared with the same periods in 1999. This increase was primarily related to the timing of the Company's parcel timber sales and a substantial increase in the average realized price received. Other income increased $403,000 in the second quarter of 2000 and $2.0 million for the first six months of 2000, as compared with the same periods in 1999. These increases are largely due to the receipt of $1.0 in forfeited minimums received from the Company's lessees and $1.1 million received from the use of the unit train loadout facility by third parties in the first half of 2000, compared with $263,000 in the same period of 1999. Expenses. Expenses increased 47 percent to $1.5 million in the second quarter of 2000 and 50 percent to $3.1 million for the first six months of 1999, compared with the same periods in 1999. Operating expenses increased $93,000 to $128,000 in the second quarter of 2000 and increased $188,000 to $239,000 for the first six months of 2000, compared with 1999 amounts. The increase is a result of costs associated with the maintenance and preservation of the Company's surface acreage. Exploration expenses increased to $93,000 and $151,000 for the three and six month periods ended June 30, 2000 from $21,000 and $65,000 for the comparable periods in 1999. The increase is a result of the timing of the startup of the Company's coal core drilling program. Taxes other than income increased 42 percent to $155,000 in the second quarter of 2000 and increased 54 percent to $330,000 for the first six months of 2000, compared with $109,000 and $214,000 for the same periods in 1999. On a per ton basis, taxes other than income remained fairly constant at $0.05 in the first half of 2000 versus $.06 during the comparable 1999 period. General and administrative expenses increased four percent to $624,000 in the second quarter of 2000 and increased eight percent to $1.3 million for the first six months of 2000, compared with $601,000 and $1.2 million for the same periods in 1999. The variance is attributable to personnel additions in the last half of 1999, partially offset by higher legal fees in the first half of 1999 to pursue the potential recoverability of coal reserves. Depreciation and depletion increased to $531,000 and $1.0 million for the three and six month periods ended June 30, 2000 from $273,000 and $533,000 for the comparable periods in 1999. Depreciation and depletion, on a per ton basis, was $0.16 and $0.17 for the three and six months periods ended June 30, 2000, compared with $0.13 and $0.14 for the respective periods in 1999. The depletion rate, on a per ton basis, increased due to the 1999 completion of the unit train loadout facility and the Company's $30 million acquisition in the last half of 1999. Capital Resources and Liquidity. Net Cash Provided by Operating Activities. Funding for the Company's business activities has historically been provided by operating cash flows and bank borrowings. Net cash provided by operating activities was $17.1 million in the first six months of 2000, compared with $8.9 million in the first six months of 1999. The Company's consolidated long-term borrowings increased from $78.5 million at December 31, 1999 to $111.0 million at June 30, 2000. Net Cash Used in Investing Activities. Net cash used in investing activities totaled $45.1 million and $4.0 million for the first six months of 2000 and 1999, respectively. In the first six months of 2000, capital expenditures totaled $46.4 million compared with $4.8 million in the first six months of 1999. Oil and gas acquisitions and development activities were the primary uses of funds. The capital expenditures, including acquisitions, made by the Company for the first six months of 2000 and 1999 are as follows: Six Months 				 Ended June 30, 						 	2000 			1999 (in thousands) 	Oil and Gas 	Acquisitions 	$	35,879 	$	192 	Development 	7,658 	2,487 	 Exploration	 	2,037 		288 	 Support equipment	 	34 	42 	 Coal Royalty and Land Management 	 Acquisitions	 	111 		344 	 Support equipment and facilities 	 	406 		1,447 	Other		 225	 	35 	Total capital expenditures 	$	46,350 	$	4,835 In the oil and gas segment, the Company had capital expenditures totaling $45.6 million in the first six months of 2000. Penn Virginia acquired over 35 Bcf of proved natural gas reserves in West Virginia, Virginia and Kentucky in May 2000. The $35.0 million acquisition of royalty interest also includes numerous working interest exploratory opportunities which the Company expects to test and evaluate over the coming months. In the first half of 2000, the Company drilled 43 gross (35.2 net) development wells and nine gross (6.0 net) exploratory wells, which included two gross (0.4 net) non-productive wells. Due to the recent increases in market prices for natural gas, the Company increased its 2000 capital expenditure budget to drill an additional 20 net development wells for a total of 80 net development wells. The Company still expects to drill approximately 10 to 20 net exploratory wells during 2000. The Company also holds an investment in Norfolk Southern common stock which had a gross unrealized holding gain of $46.4 million at June 30, 2000. Net Cash Used in Financing Activities. Net cash provided by financing activities totaled $27.3 million for the first six months of 2000. Penn Virginia paid $3.7 million of dividends in the first half of 2000 and used $5.1 million to repurchase 300,000 shares of treasury stock. The Company also borrowed $35.0 million to finance a second quarter oil and gas acquisition. Penn Virginia has a $135 million unsecured revolving credit facility (the "Revolver") with a final maturity of June 2003. The Revolver bears interest at LIBOR or the base rate at the option of the Company plus a percentage based on the percentage of the borrowing base outstanding. The outstanding balance on the Revolver was $110.1 million at June 30, 2000. Management believes its portfolio of investments and sources of funding are sufficient to meet short- and long-term liquidity needs not funded by cash flows from operations. Other 	Accounting for Derivative Instruments and Hedging Activities. In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") which was subsequently amended by SFAS No. 138 in June 2000. The statements establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, (collectively referred to as derivatives) and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. 	In June 1999, FASB issued SFAS No. 137 which deferred the effective date of SFAS No. 133 for all fiscal quarters of all fiscal years beginning after June 15, 2000. Given its low levels of derivative activity, the Company does not expect adoption to have a significant impact on the Company's financial position, results of operations or liquidity. Forward-Looking Statements. Statements included in this report which are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto) are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. In addition, Penn Virginia and its representatives may from time to time make other oral or written statements which are also forward-looking statements. Such forward-looking statements include, among other things, statements regarding development activities, capital expenditures, acquisitions and dispositions, drilling and exploration programs, expected commencement dates of coal mining or oil and gas production, projected quantities of future oil and gas production by Penn Virginia, projected quantities of future coal production by the Company's lessees producing coal from reserves leased from Penn Virginia, costs and expenditures as well as projected demand or supply for coal and oil and gas, which will affect sales levels, prices and royalties realized by Penn Virginia. These forward-looking statements are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning future events impacting Penn Virginia and therefore involve a number of risks and uncertainties. Penn Virginia cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause the actual results of operations or financial condition of Penn Virginia to differ include, but are not necessarily limited to: the cost of finding and successfully developing oil and gas reserves; the cost of finding new coal reserves; the ability to acquire new oil and gas and coal reserves on satisfactory terms; the price for which such reserves can be sold; the volatility of commodity prices for oil and gas and coal; the risks associated with having or not having price risk management programs; Penn Virginia's ability to lease new and existing coal reserves; the ability of Penn Virginia's lessees to produce sufficient quantities of coal on an economic basis from Penn Virginia's reserves; the ability of lessees to obtain favorable contracts for coal produced from Penn Virginia reserves; Penn Virginia's ability to obtain adequate pipeline transportation capacity for its oil and gas production; competition among producers in the coal and oil and gas industries generally and in the Appalachian Basin in particular; the extent to which the amount and quality of actual production differs from estimated recoverable coal reserves and proved oil and gas reserves; unanticipated geological problems; availability of required materials and equipment; the occurrence of unusual weather or operating conditions including force majeure or events; the failure of equipment or processes to operate in accordance with specifications or expectations; delays in anticipated start-up dates; environmental risks affecting the drilling and producing of oil and gas wells or the mining of coal reserves; the timing of receipt of necessary governmental permits; labor relations and costs; accidents; changes in governmental regulation or enforcement practices, especially with respect to environmental, health and safety matters, including with respect to emissions levels applicable to coal-burning power generators; risks and uncertainties relating to general domestic and international economic (including inflation and interest rates) and political conditions; the experience and financial condition of lessees of coal reserves, joint venture partners and purchasers of reserves in transactions financed by Penn Virginia, including their ability to satisfy their royalty, environmental, reclamation and other obligations to Penn Virginia and others; changes in financial market conditions; changes in the market prices or value of the marketable securities owned by Penn Virginia, including the price of Norfolk Southern common stock and other risk factors detailed in Penn Virginia's Securities and Exchange commission filings. Many of such factors are beyond Penn Virginia's ability to control or predict. Readers are cautioned not to put undue reliance on forward-looking statements. While Penn Virginia periodically reassesses material trends and uncertainties affecting Penn Virginia's results of operations and financial condition in connection with the preparation of Management's Discussion and Analysis of Results of Operations and Financial Condition and certain other sections contained in Penn Virginia's quarterly, annual or other reports filed with the Securities and Exchange Commission, Penn Virginia does not intend to publicly review or update any particular forward-looking statement, whether as a result of new information, future events or otherwise. PART II	 Other information Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 	(27)	Financial Data Schedule, filed herewith. (b) Reports on Form 8-K 	No reports on Form 8-K were filed for the quarter ended June 30, 2000. SIGNATURES 	Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PENN VIRGINIA CORPORATION Date: August 11, 2000 				By: /s/Steven W. Tholen Steven W. Tholen, Vice President and Chief Financial Officer Date: August 11, 2000 By: /s/ Ann N. Horton 	 	Ann N. Horton, Controller and Principal Accounting Officer PENN VIRGINIA CORPORATION INDEX 	PAGE PART I	Financial Information: Item 1. Financial Statements Condensed Consolidated Statements of Income for the three	2 and six months ended June 30, 2000 and 1999 Condensed Consolidated Balance Sheets as of June 30, 2000 and	3 December 31, 1999 Condensed Consolidated Statements of Cash Flows for the three	5 and six months ended June 30, 2000 and 1999 Notes to Condensed Consolidated Financial Statements	6 Item 2.	Management's Discussion and Analysis of Financial Condition	9 and Results of Operations PART II 	Other Information Item 6. Exhibits and Reports on Form 8-K			19 Article 5 of Regulation S-X