Penn Virginia Corporation (PVA) Surges: Finally a Turnaround? IOIL & PSCE

Yesterday, small cap oil and gas stock Penn Virginia Corporation (NYSE: PVA) surged 14.84% after reporting earnings and was also rising close to 6% in pre-market trading – meaning it might be worth taking a closer look at the small cap along with the performance of ETF peers IQ Global Oil Small Cap ETF (NYSEARCA: IOIL) and PowerShares S&P SmallCap Energy Portfolio (NASDAQ: PSCE). After all, a look at the longer term chart of Penn Virginia Corporation does not reveal a pretty picture for investors over the long haul.

What is Penn Virginia Corporation?

Small cap Penn Virginia Corporation is an independent oil and gas company involved in the development, exploration and production of natural gas and oil in various domestic onshore regions including Texas, the Mid-Continent and Mississippi. At the end of last year, the company had proved natural gas and oil reserves of approximately 113.5 MMBOE, of which 40% were oil and NGLs and 41% were proved developed. Operations include both conventional and unconventional developmental drilling opportunities plus some exploratory prospects.

For reference, the Global Oil Small Cap ETF tracks the performance of the IQ Global Oil Small Cap Index which provides important exposure to global small cap companies involved in the oil sector, including in the areas of exploration and production, refining and marketing, and equipment, services and drilling; while the PowerShares S&P SmallCap Energy Portfolio tracks the S&P SmallCap 600 Capped Energy Index which tracks the overall performance of common stocks of US energy companies.

What You Need to Know About Penn Virginia Corporation

On Wednesday after the market closed, Penn Virginia Corporation reported product revenues from the sale of oil, natural gas liquids (NGLs) and natural gas of $121.6 million or $67.33 per barrel of oil equivalent (BOE) for an increase of 11% from $109.7 million (or $62.78 per BOE) while the company's adjusted net loss attributable to common shareholders came in at $1.5 million verses a net loss of $10.9 million for the same period the year before. In the earnings press release, the CEO commented:

"Despite this growth, our production and revenues increased less than expected during the third quarter due to several issues associated with the outside operated Eagle Ford Shale program. Our non-operated partner recently reduced its rig count from two to one and, as a result, we have increased our operated drilling rig count by one rig…. During the third quarter, our well costs decreased and well productivity increased as a result of lower completion costs, the increased use of multi-well pads and the use of "zipper fracs," which have contributed to greater productivity per well and per frac stage."

However, Penn Virginia Corporation has had a troubled balance sheet and late last year, the company did concurrent public offerings of $40 million in common stock and $100 million of depositary shares where each share represented a fractional ownership interest in a share of 6.00% convertible perpetual preferred stock. The company used the proceeds from the offerings to pay off a revolving credit facility.

Share Performance: Penn Virginia Corporation vs. IOIL and PSCE

Small cap Penn Virginia Corporation surged 14.84% to $8.51 (PVA has a 52 week trading range of $3.56 to $9.00 a share) for a market cap of $555.52 million plus the stock is up 95.6% since the start of the year, up 83.8% over the past year and still down 77.1% over the past five years. Here is a look at the long term performance of Penn Virginia Corporation verses that of IQ Global Oil Small Cap ETF and PowerShares S&P SmallCap Energy Portfolio:

As you can see from the above chart, Penn Virginia Corporation has been trending downward up until last summer or so while the Global Oil Small Cap ETF and the PowerShares S&P SmallCap Energy Portfolio have largely trended upward.

Finally, here is a look at the latest technical charts for Penn Virginia Corporation plus the ETFs:

The Bottom Line. It does look like small cap Penn Virginia Corporation has some momentum in the upward direction, but less aggressive investors might still want to stick with small cap energy benchmarks like the Global Oil Small Cap ETF and the PowerShares S&P SmallCap Energy Portfolio.