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Penn Virginia (PVA) successfully delivered on the first of its several divestiture promises. Yesterday, the company announced an agreement to sell its Eagle Ford natural gas gathering and gas lift system (119 miles of pipelines and associated facilities) in Gonzales and Lavaca Counties, Texas for $100 million ($95 million net of partners' interest). The buyer is an entity sponsored by ArcLight Capital, a major energy-focused private equity firm.

The sale price is at the very high end of expectations and is a significant success for Penn Virginia (I have estimated the sale price to be in the $60-$80 million range). The company is working hard to raise capital through divestitures of less strategic assets to fund the...

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