Penn Virginia shares rise on drilling success
By Ajay Kamalakaran
BANGALORE May 30 (Reuters) - Oil and natural gas producer Penn Virginia Corp's (PVA.N: Quotazione) shares rose almost 19 percent to a 52-week high, after one of its wells in east Texas successfully tested for natural gas.
Penn Virginia said it completed its first horizontal test well exclusively targeting the Bossier (Haynesville) Shale formation in east Texas, which has been described as one of the richest fields of natural gas in the region and has the potential to overshadow the Barnett Shale.
The company said the well had an initial production rate of about 8.0 million cubic feet of natural gas per day with a flowing casing pressure of about 5,000 pounds.
"We have an acreage position of approximately 53,000 net acres in east Texas, much of which is expected to be prospective in the Bossier Shale," Penn Virginia Chief Executive James Dearlove said in a statement.
He said additional wells that the company plans to drill in 2008 should help define the full potential of the area.
Coker & Palmer analyst Michael Bodino said in an e-mail from New Orleans, "We got the first real validation of the Haynesville Shale play with an announcement of Penn Virginia."
Bodino added that Penn Virginia's announcement had pushed up shares of all Haynesville players, including Petrohawk Energy Corp (HK.N: Quotazione), Chesapeake Energy Corp (CHK.N: Quotazione), Comstock Resources Inc (CRK.N: Quotazione), Goodrich Petroleum Corp GDP.N and GMX Resources Inc GMXR.O.
Penn Virginia shares rose about 17 percent to $61.83 in afternoon trade on the New York Stock Exchange. They touch a new 52-week high of $62.91 earlier in the session. (Editing by Himani Sarkar)
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