Penn Virginia Corporation has closed the acquisition of Lonestar Resources US Inc and plans to rename the combined company Ranger Oil Corporation.
The company also announced plans for future operational activity, changes to the composition of its board of directors, and a reset of certain Lonestar hedges. The company maintains focus on maximizing operational and capital efficiency, generating superior returns, and building on its consistent track record of free cash flow generation, which it has sustained every quarter since fourth quarter 2019.
Reflecting its focus on safe and efficient oil and natural gas operations in Texas, Penn Virginia intends to officially rebrand as Ranger Oil Corporation and, effective October 18, 2021, begin trading under the NASDAQ ticker symbol of ROCC. The rebranding is expected to be fully complete prior to year-end 2021.
Darrin Henke, president and chief executive officer of the company, commented: “In a very short time, we have significantly increased the scope and scale of the Company, amplifying its free cash flow generation and return potential.
“We’ve combined the asset bases of Penn Virginia, Rocky Creek Resources and Lonestar, creating a consolidated asset position producing almost 40,000 barrels of oil equivalent per day with over 140,000 net acres strategically positioned in the core of the Eagle Ford play in South Texas. We now own high-quality inventory approximating 750 locations, approaching two decades of inventory at our current drilling pace.”
“Additionally, we’ve made significant changes to our management team, assembling a set of highly experienced team members including myself as CEO, along with our chief financial officer, senior vice president of development, and numerous other seasoned professionals throughout the Company.
“These changes have driven a step change in recent asset, operational and financial performance over the last several quarters. Wells spud in 2020 and 2021 have exceeded DeGolyer & MacNaughton’s type curves by approximately 15 percent cumulatively since they were brought onto production.
“Our most recent Bloodstone two-well pad generated a combined IP-30 rate of over 4,850 boe/d. Since the beginning of 2020 through the first half of 2021, we had the highest EBITDA margin per boe of any public US independent oil and gas company.”
“In addition to our strategic and operational achievements, we transformed our balance sheet over the past year by bringing in substantial equity capital from an experienced oil and gas equity group, issuing senior unsecured notes to extend maturities, and amending and expanding our credit facility borrowing base while reducing the balance borrowed on the facility.
“This resulted in our company having an estimated 1.5x pro-forma LTM leverage. We’ve announced seven consecutive quarters of free cash flow through June 30 of this year and project Ranger to produce over $200 million of free cash flow in 2022 at current strip pricing.”
Rusty Kelley, senior vice president and chief financial officer, added: “Over the past year and a half, we have consistently committed to certain principles along with operational and financial goals designed to deliver superior returns with reduced risk.
“We’ve now achieved all of our first phase goals as Darrin set forth, and believe we now stand at the beginning of another phase of significant fundamental value creation. We believe the combination of low leverage, consistent free cash flow, increasing operational and financial efficiencies, and deep inventory provides the company with a variety of avenues for superior performance.”
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