Penn Virginia Confirms Fundamentals for Business Segments; Raises Quarterly Cash Distributions

RADNOR, Pa.--(BUSINESS WIRE)--Penn Virginia Resource Partners, L.P. (NYSE:PVR) and Penn Virginia GP Holdings, L.P. (NYSE:PVG) today announced both PVR and PVG raised their quarterly cash distributions for the seventh and eighth consecutive quarters, respectively, as discussed further below.

Management Comment

A. James Dearlove, Chief Executive Officer of PVR and PVG, said, “PVR’s coal royalty and midstream segments continue to deliver solid results, providing the support for increased distributions by both partnerships. Despite the recent steep declines in the unit prices of PVR and PVG, the underlying business fundamentals appear to remain solid for PVR’s coal and natural resource management and natural gas midstream segments. We believe that the primary explanation for the declines in the unit prices of both entities is the impact of widespread turmoil in the equity and credit markets and do not believe such declines are related to the current fundamentals of PVR’s operating segments.

“PVR expects to continue to benefit from a diversified and growing asset base across both of its segments and its balance sheet has been prudently capitalized. Considering cash flows from operations and available credit under its $700 million credit facility, PVR is well-positioned to fund its operations and quarterly cash distributions through 2009.”

PVR and PVG will provide further updates in their regularly-scheduled third quarter earnings releases and joint conference call in early November.

PVR Quarterly Distribution Increase

The Board of Directors of Penn Virginia Resource GP, LLC, the general partner of PVR, today declared a quarterly distribution of $0.47 per unit or $1.88 per unit on an annualized basis. This quarterly distribution represents a $0.01 per unit, or 2.2 percent, increase over the $0.46 per unit distribution paid in the prior quarter and a 9.3 percent increase over the $1.72 annualized distribution paid in the same quarter of 2007. The quarterly distribution covers the period July 1 through September 30, 2008, and is payable on November 14, 2008 to unitholders of record on November 6, 2008. PVR has increased its distribution for seven consecutive quarters and has increased its distribution 15 times since its initial public offering in 2001.

PVG Quarterly Distribution Increase

The Board of Directors of PVG GP, LLC, the general partner of PVG, today declared a quarterly distribution of $0.38 per unit or $1.52 per unit on an annualized basis. This quarterly distribution represents a $0.02 per unit, or 5.6 percent, increase over the $0.36 per unit distribution paid in the prior quarter and a 26.7 percent increase over the $1.20 annualized distribution paid in the same quarter of 2007. The quarterly distribution covers the period July 1 through September 30, 2008, and is payable on November 19, 2008 to unitholders of record on November 6, 2008. PVG has increased its distribution in all eight quarters since its initial public offering in 2006.

Update on Financial Condition

On August 5, 2008, PVR amended and restated its revolving credit facility (Revolver) to increase its available borrowings under the Revolver from $600 million to $700 million and to make it a secured facility that matures in December 2011. Considering current borrowings under the Revolver, PVR could borrow up to an additional $138 million, which, together with cash flow from operations, is anticipated to be sufficient to fund operations and quarterly cash distributions through the end of 2009.

The PVR bank group is comprised of 17 commercial banks with no one bank holding more than 8.6 percent of the Revolver. The large number of banks and the lack of credit concentration within the bank group should allow for flexibility should there be any additional consolidation within the banking sector.

Headquartered in Radnor, PA, Penn Virginia Resource Partners, L.P. (NYSE:PVR) is a publicly traded limited partnership formed by Penn Virginia Corporation (NYSE:PVA). PVR manages coal and natural resource properties and related assets and operates a midstream natural gas gathering and processing business. For more information, please visit PVR’s website at www.pvresource.com.

Headquartered in Radnor, PA, Penn Virginia GP Holdings, L.P. (NYSE:PVG) is a publicly traded limited partnership formed to own the general partner interest, all of the incentive distribution rights and approximately 37 percent of the limited partner interests in PVR. For more information, please visit PVG’s website at www.pvgpholdings.com.

Certain statements contained herein that are not descriptions of historical facts are “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the following: the volatility of commodity prices for natural gas, NGLs, crude oil and coal; the relationship between natural gas, NGL and coal prices; the projected demand for and supply of natural gas, NGLs and coal; competition among producers in the coal industry generally and among natural gas midstream companies; the extent to which the amount and quality of actual production of PVR’s coal differs from estimated recoverable coal reserves; PVR’s ability to generate sufficient cash from its businesses to maintain and pay the quarterly distribution to PVR’s general partner and PVR’s unitholders; the experience and financial condition of PVR’s coal lessees and natural gas midstream customers, including PVR’s lessees’ ability to satisfy their royalty, environmental, reclamation and other obligations to PVR and others; operating risks, including unanticipated geological problems, incidental to PVR’s coal and natural resource management or natural gas midstream business; PVR’s ability to acquire new coal reserves or natural gas midstream assets and new sources of natural gas supply and connections to third-party pipelines on satisfactory terms; PVR’s ability to retain existing or acquire new natural gas midstream customers and coal lessees; the ability of PVR’s lessees to produce sufficient quantities of coal on an economic basis from PVR’s reserves and obtain favorable contracts for such production; the occurrence of unusual weather or operating conditions including force majeure events; delays in anticipated start-up dates of PVR’s lessees’ mining operations and related coal infrastructure projects and new processing plants in PVR’s natural gas midstream business; environmental risks affecting the mining of coal reserves or the production, gathering and processing of natural gas; the timing of receipt of necessary governmental permits by PVR or its lessees; hedging results; accidents; changes in governmental regulation or enforcement practices, especially with respect to environmental, health and safety matters, including with respect to emissions levels applicable to coal-burning power generators; uncertainties relating to the outcome of current and future litigation regarding mine permitting; and risks and uncertainties relating to general domestic and international economic (including inflation, interest rates and financial market) and political conditions (including the impact of potential terrorist attacks).

Additional information concerning these and other factors can be found in our press releases and public periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2007. Many of the factors that will determine our future results are beyond the ability of management to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as the result of new information, future events or otherwise.