NEW YORK, June 26, 2015 /PRNewswire/ -- Lone Star Value Management, LLC (together with its affiliates, "Lone Star Value", "we", or "us") owns 2.0 million shares of Penn Virginia Corporation ("Penn Virginia" or the "Company") (NYSE: PVA), representing approximately 2.8% ownership of the Company. Lone Star Value invests in undervalued, small-cap companies and seeks to engage with its portfolio companies to maximize value for all shareholders.

On June 25, 2015, Proactive Investors, a UK-based news organization, reported that BP plc had offered to acquire Penn Virginia for $8 per share, but the offer was rejected. Penn Virginia issued an uninformative press release saying it had no comment on the market rumors. We note that $8 per share would represent an 80% premium to where PVA stock closed the prior day. Although we believe that Penn Virginia shares have significant upside potential in an industry recovery scenario, given the Company's history of poor performance, its stale Board, and its high cost of capital, the most viable path to maximizing shareholder value, in our view, is to immediately undertake a robust strategic alternatives process to fully explore all credible proposals for the acquisition of the Company.

We believe Penn Virginia's acreage in the Eagle Ford Shale in Gonzales and Lavaca Counties in Texas is very valuable and makes the Company an attractive acquisition target. However, we also note that Penn Virginia has a poor long-term track record of creating value for shareholders. Penn Virginia shares, for example, have declined -70% over the past year and -77% over the past five years while the performance of the E&P Index over the same time periods was -39% and -5%, respectively.

Penn Virginia has a long history of incurring excessive leverage, often at the peak of the cycle, and this recent industry downturn serves as another example. The Company has recently had to retrench by reducing its rig count from 8 drilling rigs down to 2. Although this decision may be justified on a short-term basis given the oil price decline over the past year, our concern is that when an upcycle ensues, Penn Virginia will be ill-prepared to fully capitalize on it. We believe the Company will be forced to focus on paying down its debt and can only increase its drilling activity slowly, failing to fully capitalize on its valuable Eagle Ford Shale acreage. In a recent roadshow with investors, Penn Virginia discussed options such as selling assets and potentially selling equity -- neither option is a good one for shareholders at the bottom of the cycle. Thus, we believe that Penn Virginia's assets are more valuable to a company with a lower cost of capital that can accelerate drilling and fully capitalize on the value of the Company's Eagle Ford Shale acreage, especially in an oil price recovery environment.

Penn Virginia's Board is entrenched with an average Board tenure of 10 years and no new independent directors joining in the last 5 years. If it is true that Penn Virginia could be sold for an 80% premium or more to a credible buyer, the Board has a fiduciary duty to fully explore such an offer. Shareholders wishing to continue to participate in the E&P sector and the Eagle Ford Shale can easily do so by reinvesting in another company with similar exposure and upside as Penn Virginia.

We will continue to monitor developments at Penn Virginia closely and if the incumbent Board rejects offers at a substantial premium to Penn Virginia's stock price without proper consideration in accordance with their duties to shareholders, we reserve all of our rights to take any actions we believe to be necessary to protect the interests of all shareholders, which may include seeking shareholder representation on the Board and/or removing some or all or the current incumbent directors.

About Lone Star Value Management:

Lone Star Value Management, LLC ("Lone Star Value") is an investment firm that invests in undervalued securities and engages with its portfolio companies in a constructive way to help maximize value for all shareholders. Lone Star Value was founded by Jeff Eberwein who was formerly a Portfolio Manager at Soros Fund Management and Viking Global Investors. Lone Star Value is based in Old Greenwich, CT.

Jeffrey E. Eberwein, Managing Member
Lone Star Value Management, LLC

Investor Contacts:
John Glenn Grau
InvestorCom, Inc.
(203) 972-9300 ext. 11

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SOURCE Lone Star Value Management, LLC