Penn Virginia Corporation says that its Board of Directors has approved an oil and gas capital expenditures budget for 2009 of $250 million. The capital budget includes $225 million of development and exploratory drilling and completion expenditures, which is approximately one-half of the midpoint of expected 2008 drilling and completion expenditures. PVA anticipates 2009 production will range between 52.0 and 54.0 billion cubic feet of natural gas equivalent ("Bcfe"), an increase of approximately 10 to 15 percent over the midpoint of 2008 production guidance. PVA also provided updated full-year 2008 guidance and its initial full-year 2009 guidance.

Approximately $236 million, or 94 percent of the capital budget, relates to development drilling and related activities in PVA's core areas, including East Texas, the Mid-Continent region, Mississippi and Appalachia. Play types included in each of these respective areas include the Lower Bossier (Haynesville) Shale, the Granite Wash, the Selma Chalk and multi-lateral horizontal coalbed methane (HCBM). Approximately $14 million, or six percent of the capital budget, relates to exploratory activities, including higher-risk, higher-reward prospects in south Louisiana, as well as the Marcellus Shale in Pennsylvania.

The 2009 capital budget was reduced from expected 2008 levels due to concerns about a lack of liquidity in the capital markets and an uncertain commodity price outlook. PVA's capital spending program is expected to be funded by internally generated cash flows, including distributions received from Penn Virginia GP Holdings, L.P., which totaled approximately $44 million in 2008. Borrowings under PVA's revolving credit facility are expected be approximately $330 million at the end of 2008, with availability of approximately $150 million.

The capital budget assumes base NYMEX (New York Mercantile Exchange) commodity prices of $6.50 per million British thermal units (MMBtu) for natural gas and $60.00 per barrel for crude oil, adjusted for quality and basis differentials. The 2009 capital budget is subject to revision as the operating environment and financial and capital market conditions change. PVA has hedged approximately 34 percent and 30 percent of the expected midpoints of natural gas and crude oil production, respectively, in 2009.

A. James Dearlove, President and Chief Executive Officer, said, "Our oil and gas capital budget for 2009 anticipates double-digit production growth while also prudently positioning PVA to weather uncertain market conditions and commodity prices. The diversity and attractive rates of return inherent in our portfolio, which has become increasingly oriented towards high impact resource and unconventional gas plays, allow us to continue to grow production in a difficult environment. We will continue to monitor commodity prices and market conditions carefully and may elect to alter our spending plans should the environment change. Given our attractive hedging position in 2009 and our minimal leasehold and drilling rig commitments, we believe that we have sufficient financial flexibility to react to changes in market conditions."

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