Juniper Capital Advisors Invest in Penn Virginia


HOUSTON, Nov. 03, 2020 (GLOBE NEWSWIRE) -- Penn Virginia Corporation (NASDAQ:PVAC) and certain affiliates of Juniper Capital Advisors, L.P.  today announced a strategic transaction to improve Penn Virginia’s balance sheet and liquidity position, extend its second-lien term loan maturity and increase its cash flow and drilling inventory with complementary bolt-on assets.

Juniper will make a $188.4 million investment in Penn Virginia which includes: i) a cash investment of $150 million at $8.75 per share, a 13% premium to the Company’s closing share price on November 2, 2020 and ii) a contribution of complementary oil and gas assets for 4.96 million equity interest in a Penn Virginia subsidiary (in an up-C structure as discussed below) at the closing price of its common stock on November 2, 2020, representing value of approximately $38.4 million.

Strategic Rationale and Benefits

  • Substantially Improves the Company’s Balance Sheet
    The transaction more than doubles the market capitalization of the Company while paying down well over $100 million of debt. The transaction is expected to increase liquidity by approximately 195% to $151 million(1), reduce the Company’s leverage ratio(2) by approximately 30% to 1.1x, extend the maturity runway for the second-lien term loan by two years to September 2024, and reduce annual interest expense by 20%, or $6 million per year.
  • Creates Sustainable Platform for Low Oil Price Environment
    The Company has a robust hedge book to mitigate lower oil prices persisting into 2021 while maintaining significant upside exposure to an oil price recovery. The Company believes it can maintain production within cash flow at $40 per barrel West Texas Intermediate (“WTI”) and generate free cash flow(3) to reduce debt at $45 per barrel WTI.
  • Increases Scale and Lowers Cost with Complementary Bolt-on Acreage Position
    Juniper’s oil and gas assets complement the Company’s existing assets and add production, cash flow, and additional drilling locations without an increase in debt. The expanded footprint is expected to allow for longer laterals, lower per unit operating expenses, and increase the number of wells per pad, all with no anticipated increase to general and administrative expenses.
  • Enhances Premier Asset Base
    The combined acreage position is primarily held-by-production, which provides significant optionality for future development. Additionally, the assets are located on private fee lands in the Eagle Ford trend's proven geology and contain hundreds of future drilling locations. Advantaged well-level economics are driven by superior geology, a consolidated position for lower costs and longer laterals, advantageous Gulf Coast pricing, and ample takeaway capacity.

Edward Geiser, Juniper’s Managing Partner commented, “We have extensive experience in this area of the Eagle Ford, growing our portfolio company, Rocky Creek Resources, over the past several years. Juniper is very excited to be partnering with the team at Penn Virginia, and we are committed to the Company’s long-term success. Penn Virginia provides a unique opportunity as it is one of a few small-cap producers that can modestly grow production while still generating free cash flow due to its top-tier asset base and access to premium Gulf Coast pricing. Darrin, Rusty, and their team are perfectly suited to highlight the value of their top-tier assets, and we believe this transaction allows the Company to deliver superior long-term value to shareholders.”

"We are very pleased to partner with Juniper on this transformational opportunity,” said Darrin Henke, Penn Virginia’s President and Chief Executive Officer. “The transaction significantly strengthens our balance sheet, adds complementary assets, and allows us to highlight our premier asset base. We evaluated several capital providers, and we are moving forward with Juniper, given their history of successful operations in our area of the Eagle Ford and our similar operational and financial views. Juniper and Penn Virginia have a common goal in mind – to be a trusted, low-cost, high-margin producer that delivers value to shareholders in a variety of commodity price environments. The Rocky Creek assets complement our existing footprint, which provides additional scale and improves our per-unit cost structure. Finally, this transaction further solidifies our position as a leader in the small cap E&P space, with a focus on value creation for our shareholders, with consistent free cash flow generation and low leverage among our top priorities.”

Transaction Overview

Juniper will make its investment in Penn Virginia through an up-C structure, which will be implemented at the closing of the transaction. After completion of the transaction, Juniper is expected to own approximately 59 percent of Penn Virginia’s equity. As part of the transaction, Juniper will be restricted from selling any of its equity securities in Penn Virginia for six months following the closing of the transaction.

Penn Virginia expects to use $50.0 million of the cash proceeds to pay down and restructure its second-lien term loan (balance of $200.0 million as of October 30, 2020), with the balance of the cash proceeds used to significantly reduce the amount outstanding under the Company’s credit facility (balance of $314.4 million as of October 30, 2020) and to pay transaction fees and expenses.

Following the closing, Edward Geiser, Juniper’s Managing Partner, will serve as Penn Virginia's Chairman of the Board, and Juniper will appoint four additional members to the Board. Darrin Henke, Penn Virginia’s President and Chief Executive Officer, and the other members of Penn Virginia’s senior management are expected to continue in their roles, and the Company’s current directors, including Mr. Henke, will remain on the Board immediately following the closing.

In connection with the closing of the transaction, holders of Penn Virginia’s second-lien term loan have agreed to extend the maturity date from September 2022 to September 2024, in addition to other modifications to the term loan agreement.

The transaction is expected to close in the first quarter of 2021, subject to the satisfaction of customary closing conditions, including obtaining the requisite shareholder and regulatory approvals as well as approval under the Company’s revolving credit facility.


RBC Capital Markets, Evercore and Truist Securities, Inc. are serving as financial advisors to Penn Virginia. Kirkland & Ellis LLP and Gibson, Dunn & Crutcher LLP are serving as Penn Virginia’s legal advisors. BoA Securities is serving as financial advisor to Juniper. Bracewell LLP and Willkie Farr & Gallagher LLP are serving as Juniper’s legal advisors.

About Penn Virginia Corporation

Penn Virginia Corporation is a pure-play independent oil and gas company engaged in the development and production of oil, NGLs, and natural gas, with operations in the Eagle Ford shale in south Texas. For more information, please visit our website at The information on the Company's website is not part of this release.

About Juniper Capital Advisors

Juniper Capital Advisors, L.P. is an energy investment firm based in Houston, Texas, with over $1.2 billion of cumulative equity commitments. Juniper is focused on working with high-quality management teams to provide transformational equity capital to demonstrate the value and productive potential of oil and gas properties located primarily in the continental United States.

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