December 13, 2011 / 12:30 PM / 6 years ago

UPDATE 2-Penn Virginia cuts Q4 production outlook; shares down

* Cuts Q4 production outlook by 1.5-1.7 Bcfe

* Reduces forecast due to delay in well completion

* Shares down as much as 7 pct

Dec 13 (Reuters) - Penn Virginia Corp cut its fourth-quarter production outlook due to a delay in the completion of its wells in the Eagle Ford shale, sending its shares down as much as 7 percent.

The oil and gas producer now expects production of 10.7-11.0 billion cubic feet of natural gas equivalent (Bcfe) for the quarter. Earlier, it had forecast 12.2-12.7 Bcfe.

Howard Weil, which has a “market-perform” rating on Radnor, Pennsylvania-based Penn Virginia, cut its share-price target to $12 from $19 and said the lower production will raise concerns about the company’s liquidity.

“The most concerning part about the production shortfall is that the Eagle Ford is the most promising asset in PVA’s portfolio and is expected to drive growth in 2012,” the brokerage said in a note to clients.

Another brokerage, Capital One, cut its rating on the company’s stock to “neutral” citing the production cut and said it was expecting an output of 12.5 Bcfe.

“(Penn Virginia is) already one of the worst performing E&P (exploration and production) names this year.” Capital One said in a note.

Shares of Penn Virginia have lost about 65 percent year-to-date, while the S&P 1500 Oil and Gas Exploration and Production Sub-Industry Index has fallen only 1.5 percent in the same period.

The Penn Virginia stock was down 2 percent at $5.79 in morning trading on the New York Stock Exchange.

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