Penn Virginia Announces Agreement to Acquire Lonestar Resources

Continues Accretive Eagle Ford Consolidation

Complementary Assets, Increased Scale, Free Cash Flow and Inventory

HOUSTON, July 12, 2021 (GLOBE NEWSWIRE) — Penn Virginia Corporation (“Penn Virginia” or the “Company”) (NASDAQ: PVAC) and Lonestar Resources US Inc. (“Lonestar”) (OTCQX: LONE) today announced that they have entered into a definitive merger agreement under which Penn Virginia will acquire Lonestar in an all-stock transaction. Under the terms of the agreement, Lonestar shareholders will receive 0.51 shares of common stock of Penn Virginia for each share of common stock of Lonestar outstanding. The transaction, which is expected to close in the second half of 2021, has been unanimously approved by the boards of directors of both companies. The closing of the transaction is subject to customary closing conditions, including the approval of Penn Virginia and Lonestar shareholders.   Shareholders holding approximately 80% of the voting power of Lonestar, and approximately 60% of the voting power of Penn Virginia, have executed binding support agreements committing them to vote their shares for the transaction.

Penn Virginia Permit Download

Highlights of the Transaction

  • Complements existing assets, increases estimated 2021 sales volumes and free cash flow (“FCF”) by ~50%, and increases inventory locations by 50% to 750 gross locations pro forma for the transaction;
  • Estimated transaction value implies a discount to PV-10(1) value of Lonestar’s proved developed producing (“PDP”) reserves and approximately $30,000 per flowing barrel of oil equivalent;
  • Improves projected 2021 FCF(2) per share by approximately 30% as well as other key financial metrics;
  • Maintains strong balance sheet with combined Net Debt to LTM Adjusted EBITDAX of less than 1.6x(3) as of June 30, 2021 with a target of 1.0x(3) expected to be achieved in early 2022;
  • Expected annual synergies of over ;
  • Increases market capitalization by 15% and significantly improves equity float(4); and
  • Additional scale and strong financial position allows for additional potential consolidation.

Summary of Facility Transferred

Darrin Henke, Penn Virginia’s President and Chief Executive Officer, commented, “This is an exciting time for Penn Virginia as we expand our Eagle Ford footprint with the high-quality assets of Lonestar. This transaction further solidifies the Company’s position as a premier Eagle Ford operator and provides additional scale and synergies while still delivering operational excellence. Consistent with our disciplined strategy, this transaction is expected to be accretive to free cash flow and certain other key per share metrics to deliver long-term value to shareholders. The benefits of basin consolidation are very compelling, and we strongly believe this is a value-creating opportunity for both companies. We remain steadfast in our disciplined approach to running the business and continue to be committed to free cash flow generation, capital discipline, maximizing cash-on-cash returns, and protecting the environment.”

Lonestar’s Chief Executive Officer, Frank D. Bracken, III, commented on the merger, “In today’s environment, size and scale are paramount, both in terms of operations and in the public markets. The merger exposes Lonestar shareholders to a substantially larger, more liquid, publicly-listed platform and the combination of the two companies’ high quality, liquids-focused operations should provide significant benefit to both shareholder groups, positioning the Company as a dominant force in the Eagle Ford Shale.”

Map Area of Operation

Edward Geiser, Chairman of Penn Virginia and Managing Partner of Juniper Capital (“Juniper”), added, “This is exactly the type of accretive Eagle Ford consolidation we have been targeting and creates a significant opportunity for investors.  Penn Virginia and Lonestar fit well strategically, and the combined company will be stronger across key financial metrics, will operate more efficiently than each company standalone, and will continue Penn Virginia’s commitment to environmental and social stewardship.  We look forward to working with the Lonestar team to complete this transaction, and we will be actively screening for additional attractive consolidation opportunities as we move forward.  Juniper is excited about what the Penn Virginia team has been able to achieve over the six months since we closed our investment in the company, and we remain committed to its long-term success.”

Transaction Overview

Under the terms of the merger agreement, Lonestar shareholders will receive 0.51 shares of Penn Virginia for each Lonestar share. The transaction is valued at approximately $370 million as of July 9, 2021, composed of approximately 5.9 million shares of Penn Virginia common stock and the assumption of approximately $236 million of Net Debt(5). The transaction is expected to close in the second half of 2021, subject to the satisfaction of customary closing conditions, including obtaining the requisite shareholder and regulatory approvals. The transaction has been unanimously approved by the Boards of Directors of both companies. In addition, following the execution of the merger agreement, Lonestar shareholders holding approximately 80% of the voting power of Lonestar and Penn Virginia shareholders holding approximately 60% of the voting power of Penn Virginia signed binding support agreements obligating them to vote in favor of the transaction. Upon completion of the transaction, Penn Virginia shareholders will own approximately 87% of the combined company, and Lonestar will own approximately 13% of the combined company.

Governance and Leadership

Following the transaction completion, Lonestar will have the right to nominate one independent director to the Penn Virginia Board of Directors. Edward Geiser will continue to serve as Chairman of the Board, and Darrin Henke will continue to serve as President and CEO of the Company following the closing of the transaction.


Evercore, BofA Securities, and RBC Capital Markets, LLC are serving as financial advisors to Penn Virginia. Kirkland & Ellis LLP is serving as Penn Virginia’s legal advisor. Barclays Capital is serving as financial advisor to Lonestar. Vinson & Elkins LLP is serving as Lonestar’s legal advisor.

About Penn Virginia Corporation

Penn Virginia Corporation is a pure-play independent oil and gas company engaged in the development and production of oil, NGLs, and natural gas, with operations in the Eagle Ford shale in south Texas. For more information, please visit our website at The information on the Company’s website is not part of this release.

About Lonestar Resources US Inc.

Lonestar is an independent oil and natural gas company based in Fort Worth, Texas, focused on the development, production, and acquisition of unconventional oil, NGLs, and natural gas properties in the Eagle Ford Shale in Texas, where Lonestar has accumulated approximately 72,682 gross (53,550 net) acres in what we believe to be the formation’s crude oil and condensate windows, as of March 31, 2021. For more information, please visit

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