[on Penn Virginia Corporation letterhead]





                       February 25, 1998


Dear Fellow Shareholders:

     Your Board of Directors has announced the adoption of a 
Shareholder Rights Plan (the "Plan").  I am enclosing a document 
called "Summary of Rights to Purchase Preferred Stock," which 
provides certain information about the Plan, and I urge you to 
read it carefully.  This letter explains some of the Board's 
reasons for adopting the Plan.

     The Plan is intended to assure that all of the Company's 
shareholders receive fair and equal treatment in the event of any 
proposed takeover of the Company and to protect shareholders' 
interests in the event the Company is confronted with partial 
tender offers or other coercive or unfair takeover tactics.

     Because I believe it is important that we communicate the 
purpose of this Plan and its effect on you as shareholders as 
clearly as possible, I am outlining below the primary elements of 
the Plan:

     The Plan provides for a dividend of Rights which initially 
enables the shareholders to purchase shares of a newly authorized 
series of the Company's Preferred Stock.  Each shareholder of 
record as of February 21, 1998 will receive one Right for each 
share of the Company's Common Stock owned.

     The Rights cannot be exercised until one of the following 
events occurs:

      -- An individual or group acquires 15% or more of 
         the Company's Common Stock (an "Acquiring Person"),

or

     -- an individual or group begins a tender offer for 15% 
        or more of the Company's Common Stock.

     Shortly after one or more of these events occurs, the 
Company will send each shareholder a separate Right Certificate.  
The shareholder may then sell this Right or transfer it 
independent of the share of Common Stock with which it was 
previously associated.

     If a person or group becomes an Acquiring Person, each Right 
will entitle its holder (other than such person or group) to 
purchase, for the exercise price in effect under the Plan, a 
number of shares of the Company's Common Stock having a market 
value of twice such price.

     In addition, if the Company is acquired in a merger or other 
business combination, each Right will entitle its holder (other 
than the acquiror) to purchase, for the exercise price in effect 
under the Plan, a number of shares of the acquiror's Common Stock 
having a market value of twice such price.

     The Rights can be redeemed by the Company at a price of 
$.001 per Right up to ten days after the public announcement that 
someone has become an Acquiring Person.  If, however, there has 
been a change in a majority of the Board as a result of a proxy 
contest, and a person who was a participant in the contest has 
indicated an intention to become (or the board determines that 
such person intends to become) an Acquiring Person, then the 
redemption of the Rights will require the approval of a majority 
of at least two Continuing Directors of the Company.  A 
"Continuing Director" is a member of the Board of Directors of 
the Company who is neither an Acquiring Person nor affiliated 
with an Acquiring Person and was either a member of the Board 
prior to the distribution of the Rights or subsequently became a 
member of the Board through recommendation or approval by a 
majority of the Continuing Directors of which there must be at 
least two then in office.  If the Rights are not redeemed by the 
Company, they will expire on February 11, 2008.

     The Plan is not intended, nor will it operate, to prevent an 
acquisition of the Company if the Board determines the terms are 
favorable and fair to all shareholders.  The Plan is designed to 
deal with the very serious problem of unilateral actions by 
hostile acquirors that are calculated to deprive your Board of 
the ability to determine the destiny of the Company.  The 
declaration of the Rights dividend should not affect any 
prospective offer at a fair price to all shareholders and 
certainly will not interfere with a merger or other business 
combination approved by your Board of Directors.

     One overriding objective of the adoption of this Plan is to 
see that the excellent progress we have made in building value 
for our shareholders continues.  While we are pleased with the 
progress we have made, there is still much to accomplish.  The 
Board believes that adoption of the Plan will permit the Company 
to continue to implement the strategies responsible for the 
progress made to date.

                    Sincerely,


                    /s/ A. James Dearlove
                    ----------------------
                    A. James Dearlove
                    President and Chief Executive Officer