UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-753
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.)
800 THE BELLEVUE 200 SOUTH BROAD STREET, PHILADELPHIA, PA 19102
(Address of principal executive offices)
(Zip code)
(215)545-6600
(Registrant's telephone number; including area code)
NONE
(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 re-
quired 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 September 30, 1994: 4,279,540
PENN VIRGINIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Nine Months
Ended September 30, Ended September 30,
1994 1993 1994 1993
(In thousands, except
per share data)
Operating revenues:
Sales $ 163 $ 238 $ 385 $ 371
Coal royalties 3,990 3,452 11,366 10,019
Oil and gas sales and
royalties 3,687 3,169 12,067 10,743
Dividends 577 593 2,011 1,723
Other income, net 567 436 1,626 1,451
Total 8,984 7,888 27,455 24,307
Expenses:
Cost of sales 833 652 2,274 1,965
Selling, general and administrative 2,305 1,594 5,676 4,998
Exploration and development 265 194 519 592
Depreciation, depletion and
amortization 1,534 1,247 4,566 3,912
Taxes other than on income 377 365 1,141 1,224
Interest 373 451 1,247 1,403
Total 5,687 4,503 15,423 14,094
Income from operations 3,297 3,385 12,032 10,213
Income tax expense (benefit) (190) 690 2,028 2,342
Net income $ 3,487 $ 2,695 $10,004 $ 7,871
Income per common share (based on
4,279,540 weighted average shares
outstanding): $ .82 $ .63 $ 2.34 $ 1.84
<FN>
See accompanying notes to condensed consolidated financial statements.
PENN VIRGINIA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
(Unaudited)
September 30, 1994 December 31, 1993
ASSETS
Current assets
Cash and cash equivalents $ 8,322 $ 23,869
Receivables 5,013 3,880
Current portion of long-term notes receivable 3,571 3,571
Inventory 734 438
Current deferred tax benefit 669 669
Other 1,447 514
Total current assets 19,756 32,941
Investments 84,642 94,562
Long-term notes receivable, net of current portion 9,504 11,841
Property, plant and equipment (net) 83,667 74,093
Other assets 803 822
Total assets $ 198,372 $ 214,259
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current installments on long-term debt $ 7,475 $ 7,625
Accounts payable 1,411 4,456
Accrued expenses 3,873 4,535
Deferred income 203 214
Taxes on income - 587
Total current liabilities 12,962 17,417
Other liabilities 7,738 7,669
Deferred taxes 31,387 34,821
Long-term debt, net of current installments 10,150 16,575
Shareholders' Equity
Preferred stock of $100 par value -
authorized 100,000 shares; issued none - -
Common stock of $6.25 par value -
authorized 8,000,000 shares; issued 4,437,517
shares in 1994 and 1993 27,734 27,734
Other paid-in capital 34,793 34,685
Retained earnings 34,850 30,603
97,377 93,022
Less: 157,977 shares of common stock
held in treasury 7,435 7,435
Guaranteed debt to Employee Stock
Ownership Plan 450 900
Add: Unrealized holding gain, net of tax -
investments 46,643 53,090
Total shareholders' equity 136,135 137,777
Total liabilities and shareholders' equity $ 198,372 $ 214,259
<FN>
See accompanying notes to condensed consolidated financial statements.
PENN VIRGINIA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months
Ended September 30,
(In Thousands)
1994 1993
Cash flows from operating activities:
Net cash flows from operating activities $ 7,473 $ 15,275
Cash flows from (used in) investing activities:
Payment received on long-term notes 2,976 2,769
Proceeds from the sale of fixed assets 284 73
Purchases of fixed assets (14,398) (7,718)
Net cash flows (used in) investing
activities (11,138) (4,876)
Cash flows from (used in) financing activities:
Dividends paid (5,757) (5,740)
Repayment of long-term borrowings (6,575) (1,875)
Reduction in Guaranteed debt to ESOP 450 450
Net cash flows (used in) financing activities (11,882) (7,165)
Net increase (decrease) in cash and cash equivalents (15,547) 3,234
Cash and cash equivalents - beginning balance 23,869 4,153
Cash and cash equivalents - ending balance $ 8,322 $ 7,387
Supplemental disclosures of cash flow information:
Cash paid to date for:
Interest $ 1,349 $ 1,054
Income taxes $ 3,496 $ 2,086
<FN>
See accompanying notes to condensed consolidated financial statements.
PENN VIRGINIA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying condensed consoli-
dated financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the
financial position as of September 30, 1994, and the results of
operations for the three and nine months ended September 30, 1994
and 1993 and cash flows for the nine months ended September 30, 1994
and 1993.
At December 31, 1993, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities".
2. Property, plant and equipment consist of the following:
September 30, 1994 December 31, 1993
(In thousands)
Property, plant and equipment $ 115,968 $ 101,940
Less: Accumulated depreciation
and depletion (32,301) (27,847)
Net property, plant and equipment $ 83,667 $ 74,093
During the second quarter of 1994, Penn Virginia Oil and Gas
Corporation (PVOG) acquired the assets of CD & G Development
Corporation of Pikeville, Kentucky for approximately $7 million.
The CD & G assets include 116 producing oil and gas wells with
proved reserves estimated at 17.5 billion cubic feet of gas. The
CD & G acquisition, which increased PVOG's proven reserves by
approximately 10%, also includes approximately sixty future drilling
locations as well as numerous recompletion opportunities and pro-
vides an excellent fit with PVOG's existing properties in eastern
Kentucky and West Virginia.
3. The amortized cost, gross unrealized holding gains and fair value
for available-for-sale securities at September 30, 1994 were as
follows:
Gross
Unrealized
Amortized Holding Fair
Cost Gain Value
(In thousands)
Available-for-sale:
Westmoreland Coal Company $ 5,263 $ - $ 5,263
Westmoreland Resources, Inc. 4,530 - 4,530
Norfolk Southern Corporation 3,096 71,753 74,849
Totals $ 12,889 $ 71,753 $ 84,642
The amortized cost and fair value of notes receivable which are
classified as held-to-maturity securities was $13,075,000 at
September 30, 1994.
PENN VIRGINIA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. On November 8, 1994 Westmoreland Coal Company (WCX) announced that it
had not been able to obtain the consent of TECO Coal Corporation, an
affiliate of TECO Energy, Inc. and Tampa Electric, to the assignment
of two coal supply subcontracts to CONSOL required to complete its
previously announced sale of Kentucky Criterion Coal Company. On that
date WCX also announced that it and certain of its subsidiaries had
filed for protection under Chapter 11 of the Federal Bankruptcy Code
in the State of Delaware in the form of a reorganization proceeding
known as a "pre-packaged" plan. For a further discussion of this
matter, please refer to the "Liquidity, Capital Resources and Other
Financial Data" section of Management's Discussion and Analysis of
Results of Operations and Financial Condition.
Management's Discussion and Analysis of
Results of Operations and Financial Condition
Results of operations for the quarter ended September 30, 1994 as compared to
the quarter ended September 30, 1993:
Income from operations before income taxes decreased $88,000 or 3% for
the third quarter of 1994 compared to the third quarter of 1993. This decrease
is composed of a $467,000 increase in the coal and land segment, a $30,000 in-
crease in the investment segment, a $111,000 decrease in the oil and gas
segment and a $474,000 increase in general corporate expenses and interest.
Income taxes decreased as a result of a decrease in book taxable income
for the third quarter of 1994 and the reversal of tax accruals relating to an
Internal Revenue Service tax audit settlement for the years 1984 thru 1986 of
$398,000 and the recognition of additional 1993 shale tax credits of $500,000.
Coal and Land
Three Months
Ended September 30,
1994 1993
(Thousands of dollars)
Revenues:
Sales $ 163 $ 238
Royalties 3,990 3,452
Other 401 303
Total 4,554 3,993
Expenses:
Cost of sales 22 26
Selling, general and administrative 396 277
Exploration and development 57 67
Depreciation, depletion and amortization 43 45
Taxes other than on income 33 42
Total 551 457
Operating Profit $ 4,003 $ 3,536
The increase in the coal and land segment operating profit of $467,000 or 13%
is mainly attributable to increased coal royalties from independent coal
lessees and Westmoreland Coal Company's Virginia operations of $450,000 and
$255,000 respectively, due to increased tonnage offset in part by decreased
royalties from Westmoreland's West Virginia operations of $167,000. In
addition, selling, general and administrative expense increased by $119,000 or
43% due mainly to higher salary and employee benefit expenses.
Penn Virginia Corporation received royalties from Westmoreland Coal Company
totalling $3,018,000 and $2,930,000 for the three months ended September 30,
1994 and 1993 respectively.
Investments
Three Months
Ended September 30,
1994 1993
(Thousands of dollars)
Revenues:
Dividends $ 577 $ 593
Other 53 -
Total 630 593
Expenses:
Selling, general and administrative 13 3
Depreciation - 3
Taxes other than on income 1 1
Total 14 7
Operating Profit $ 616 $ 586
The increase in the investment segment operating profit of $30,000 or 5% is
mainly attributable to increased interest income of $53,000 on short-term
investments. Partially offsetting this revenue increase is an increase in
salary expense of $10,000 and a decrease in dividends of $16,000 due mainly to
the timing of the receipt of dividends from Westmoreland Resources, Inc. in
1994 versus 1993. Depreciation expense decreased by $3,000 due to the fully-
amortized status of intangible assets reached during the first half of 1994.
Oil and Gas
Three Months
Ended September 30,
1994 1993
(Thousands of dollars)
Revenues:
Sales $ 3,362 $ 2,819
Royalties 325 350
Other 76 15
Total 3,763 3,184
Expenses:
Cost of sales 811 626
Selling, general and administrative 751 611
Exploration and development 208 127
Depreciation, depletion and amortization 1,482 1,186
Taxes other than on income 301 313
Total 3,553 2,863
Operating Profit $ 210 $ 321
Operating profit for the oil and gas segment decreased $111,000 or 35%. This
decrease was due mainly to increased cost of sales and depletion expense as a
result of higher gas sales volume and increased depletion rates for 1994. In
addition, selling, general and administrative expenses increased for 1994 due
mainly to the relocation of the headquarter offices from Duffield, Virginia to
Kingsport, Tennessee in the second quarter of 1994.
Partially offsetting this decline in operating profit was an increase in gas
sales revenues of $543,000 or 19% due mainly to higher gas volumes sold. The
volume of gas sold increased by approximately 203% for the three months ending
September 30, 1994 vs. 1993 and is mainly attributable to increased gas
volumes from producing properties located in West Virginia. These properties
would include the CD & G asset acquisition that occurred in the second quarter
of 1994. Gas pricing declined by approximately 14% for the comparable
reporting period.
Corporate
The increase in general corporate expenses and interest of $474,000 or
approximately 45% was due mainly to an increase in general and administrative
expense of $552,000 offset in part by a decline in interest expense of $78,000
due to lower debt balances outstanding. The increase in general and
administrative expenses is mainly attributable to a charge of $466,000 for
personnel realignment expenses and increased payroll and franchise tax expense
of $30,000.
Results of operations for the nine months ended September 30, 1994 as
compared to the nine months ended September 30, 1993:
Income from operations before income taxes increased $1,819,000 or 18%. This
increase is comprised of a $1,424,000 increase in the coal and land segment, a
$567,000 increase in the investment segment, a $20,000 decrease in the oil
and gas segment and an increase of $152,000 in general corporate expenses and
interest.
Income taxes decreased as a result of the reversal of tax accruals relating
to an Internal Revenue Service tax audit settlement for tax years 1984 thru
1986 of $398,000 and the recognition of additional 1993 shale tax credits of
$500,000.
Coal and Land
Nine Months
Ended September 30,
1994 1993
(Thousands of dollars)
Revenues:
Sales $ 385 $ 371
Royalties 11,366 10,019
Other 989 868
Total 12,740 11,258
Expenses:
Cost of sales 63 52
Selling, general and administrative 990 913
Exploration and development 147 153
Depreciation, depletion and amortization 129 132
Taxes other than on income 107 128
Total 1,436 1,378
Operating Profit $ 11,304 $ 9,880
The increase in the coal and land segment operating profit of $1,424,000 or
14% is mainly attributable to increased coal royalties from independent coal
lessees and Westmoreland Coal Company's Virginia operations of $1,135,000 and
$422,000 respectively, due to increased tonnage mined offset in part by
decreased coal royalties from Westmoreland's West Virginia operations of
$210,000. Penn Virginia Corporation received royalties from Westmoreland Coal
Company totalling $8,561,000 and $8,349,000 for the nine months ending
September 30, 1994 and 1993 respectively.
Investments
Nine Months
Ended September 30,
1994 1993
(Thousands of dollars)
Revenues:
Dividends $ 2,011 $ 1,723
Other 277 -
Total 2,288 1,723
Expenses:
Selling, general and administrative 45 45
Depreciation 4 7
Taxes other than on income 2 1
Total 51 53
Operating Profit $ 2,237 $ 1,670
The increase in the investment segment operating profit of $567,000 or 34%
is mainly attributable to increased dividend income of $288,000 due to the
timing of dividends received from Westmoreland Resources, Inc. in 1994.
Interest income earned on short-term investments increased by $277,000 due to
the availability of prior year asset sale proceeds received in 1993.
Oil and Gas
Nine Months
Ended September 30,
1994 1993
(Thousands of dollars)
Revenues:
Sales $ 10,661 $ 9,503
Royalties 1,406 1,240
Other 212 351
Total 12,279 11,094
Expenses:
Cost of sales 2,211 1,913
Selling, general and administrative 2,078 1,653
Exploration and development 372 439
Depreciation, depletion and amortization 4,405 3,735
Taxes other than on income 914 1,035
Total 9,980 8,775
Operating Profit $ 2,299 $ 2,319
Total revenues for the oil and gas segment increased by $1,185,000 or 11%.
This increase is due mainly to higher gas sales and royalties caused by higher
gas volumes from prior and current year reserve acquisitions in West Virginia.
The total volume of gas sold increased approximately 154% in 1994 vs. 1993.
Gas pricing declined by approximately 6% for the comparable reporting period.
Partially offsetting this revenue increase was a decrease in other income due
mainly to a one-time payment for leased property received in 1993 offset in
part by higher compression income and the recognition of higher gains on asset
sales in 1994.
Total expenses increased by $1,205,000 or approximately 14%. This
increase is mainly attributable to higher cost of sales due to higher gas
volumes sold, higher selling, general and administrative expenses related to
the relocation of the headquarter offices from Duffield, Virginia to Kingsport,
Tennessee during the second quarter of 1994 and an increase in depletion
expense due to increased depletion rates and higher gas sales. Partially
offsetting these increased expenses was a decrease in property and franchise
tax expense.
Corporate
The increase in general corporate expenses and interest of $152,000 or
approximately 4% was due mainly to an increase in general and administrative
expense of $308,000 offset in part by a decrease in interest expense of
$156,000 due to lower debt balances outstanding. The increase in general and
administrative expense is mainly attributable to a charge of $466,000 for
personnel realignment expenses and increased payroll and franchise taxes of
$56,000 offset in part by lower salary, consulting and insurance expenses.
Additionally, interest income on short-term investments decreased by $60,000
and other income decreased by $27,000 due mainly to a one-time tax refund
received in 1993.
Financial Condition as of September 30, 1994:
There were no material changes in the Company's financial condition from that
reported as of December 31, 1993 except for the change in working capital
discussed below.
Liquidity, Capital Resources and Other Financial Data at September 30, 1994:
Working capital at September 30, 1994 was $6.8 million compared to $15.5
million at December 31, 1993. See the Condensed Consolidated Statement of Cash
Flows for details regarding the change.
At September 30, 1994, there were $2.0 million in unused credit lines.
There are two main factors that could influence future earnings and cash flow
of the Company. One of these is gas prices. Since the majority of the
Company's gas is sold in the spot market or under contracts less than one year
in duration, future earnings will be directly related to the fluctuation of
those prices. Any sustained decline in these prices could result in some
impairment of oil and gas assets.
The second factor is the performance of Westmoreland Coal Company ("WCX"),our
largest coal lessee. In 1993, WCX reported a loss from continuing operations
of $99 million that was caused primarily by the writedown of the assets of
various eastern operations. On April 18, 1994, WCX announced that its outside
auditors had issued a qualified opinion on its 1993 financial statements due to
the uncertainty of its ability to continue as a going concern. The opinion was
based on losses associated with WCX's eastern coal operations, a working
capital deficiency caused by a reclassification of its revolving credit and
insurance company debt to current liabilities, and violation of various
covenants in WCX's principal credit arrangements.
After the filing of its annual report, WCX announced an agreement in
principle to sell the assets of its cogeneration subsidiary for an amount in
excess of $50 million plus the assumption of certain equity commitments. On
May 9, 1994 WCX announced that it had suspended the payment of its preferred
stock dividend as a result of negotiations with its lenders. WCX also
announced that it is continuing the process of reviewing its eastern properties
with potential purchasers.
On July 13, 1994 WCX announced that it had reached an agreement with its
lenders to extend the maturity dates of two of its credit lines until
July 29, 1994. At that time, the balance due on these facilities was $21
million. WCX also stated its intention to seek a maturity extension of its
other outstanding indebtedness of $25 million, relating to letters of credit
issued in connection with its interest in a coal export facility.
On July 28, 1994 WCX announced that it had reached a definitive agreement to
sell the assets of its wholly-owned subsidiary, Kentucky Criterion Coal
Company, to CONSOL of Kentucky, Inc., a member of the CONSOL coal group for $85
million subject to an inventory adjustment at closing. The sale is subject to
third party consents. WCX has stated that the proceeds from this sale would
enable it to discharge its debt obligations of approximately $46 million. WCX
anticipates the closing of this sale to occur early in the month of November,
1994.
On August 25, 1994 WCX announced that the assets of its cogeneration
subsidiary were no longer being offered for sale. WCX cited its inability to
properly value these assets with adequate certainty as the primary reason for
its decision. WCX stated that it will reclassify these assets to continuing
operations and expects that these assets will make a significant and growing
contribution to its operating earnings.
On September 9, 1994 WCX announced that its lenders had extended the maturity
dates of its credit line obligations to November 1, 1994. The total amount
due on these credit facilities as of that date was approximately $44.4 million.
WCX announced on November 1, 1994 that its lenders had agreed to yet another
debt maturity extension to November 8, 1994 to allow WCX the extra time
required to obtain the necessary consents needed to complete the sale of the
assets of Kentucky Criterion Coal Company to CONSOL of Kentucky, Inc. The
balance due on these credit facilities on November 1, 1994 was $38 million.
On November 8, 1994 WCX announced that it has not been able to obtain the
consent of TECO Coal Corporation, an affiliate of TECO Energy, Inc. and Tampa
Electric, to the assignment of two coal supply subcontracts to CONSOL required
to complete the previously announced sale of Kentucky Criterion Coal Company.
On that date, WCX also announced that it and certain of its subsidiaries had
filed for protection under Chapter 11 of the Federal Bankruptcy Code in the
State of Delaware in the form of a reorganization proceeding known as a
"prepackaged plan". According to WCX, the purpose of the filing is to
protect the company from any action by its principal lenders and to permit it
to complete the sale of Kentucky Criterion. WCX also stated that the
bankruptcy code provides for the assignment of the sub-contracts without the
consent of TECO and that it expects this form of filing to result in an
expeditious closing on the Kentucky Criterion sale to CONSOL. Furthermore, WCX
added that CONSOL is committed to purchase the assets of Kentucky Criterion
under this structure and that the proceeds from this sale would be used to
payoff its debt obligations of $38 million after which WCX expects to be
discharged from and come out of bankruptcy. Without the completed sale of
Kentucky Criterion or this bankruptcy filing, WCX's restructured debt would
have come due as previously stated on November 8, 1994.
WCX also stated that the purpose of the bankruptcy plan is to satisfy or
leave unaffected all of WCX's debt obligations and stockholder interests,
and that it intends to continue to mine coal and honor its royalty commitments
and other obligations. Accordingly, the Company does not anticipate that its
coal royalties will be materially affected by the bankruptcy filing. At
present, the Company believes it is too early to speculate on the effect
that WCX's recent action will have on that company's long-term stock price.
The Company intends to monitor closely WCX's bankruptcy proceeding with re-
spect to further developments.
WCX is burdened by a difficult coal price environment and significant
costs for retirees and idle mines that must be borne by a shrinking production
base. If WCX cannot mine profitably, then Penn Virginia's cash flows would be
adversely affected. A prolonged period of depressed prices for coal would
affect the merchantability of the reserves leased to WCX and could ultimately
result in a curtailment of production from Penn Virginia's reserves.
The Company continues to evaluate its investment in WCX and any deterioration
in WCX's financial condition that results in the carrying value for that
investment being in excess of fair value could result in additional losses.
Except for matters discussed above, management is not presently aware of any
trends or demands which exist or uncertainties which are reasonably likely to
result in the Company's liquidity increasing or decreasing in any material way.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
The accompanying condensed consolidated financial statements have been
reviewed by the Company's independent certified public accountants, KPMG Peat
Marwick LLP, in accordance with the established professional standards and
procedures for such a limited review.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 15: Letter Re: Unaudited interim financial
information.
Exhibit 27: Financial data schedule for the nine months ending
September 30, 1994.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the quarter ended
September 30, 1994.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PENN VIRGINIA CORPORATION
(Registrant)
Date: November 14, 1994 Robert J. Jaeger
Robert J. Jaeger, Vice President, Treasurer &
Controller
(Principal Financial and Accounting Officer)
KPMG Peat Marwick LLP
Certified Public Accountants
1600 Market Street
Philadelphia, PA 19103
INDEPENDENT ACCOUNTANTS' REPORT
The Board of Directors
Penn Virginia Corporation
We have reviewed the accompanying condensed consolidated balance sheet of Penn
Virginia Corporation and subsidiaries as of September 30, 1994 and the related
condensed consolidated statements of income for the three and nine month
periods ended September 30, 1994 and 1993, and condensed consolidated statement
of cash flows for the nine month periods ended September 30, 1994 and 1993.
These financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical review
procedures to financial information and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope than
an audit conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Penn Virginia Corporation and
subsidiaries as of December 31, 1993, and the related consolidated statements
of income, shareholders' equity and cash flows for the year then ended (not
presented herein); and in our report dated March 1, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1993, is fairly presented, in all material
respects in relation to the consolidated balance sheet from which it has been
derived.
KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
Philadelphia, PA
November 9, 1994