Penn Virginia Corp. (PVA) on Friday agreed to pay an estimated $19.5 million in cash to add nearly 10,000 net acres to its Marcellus Shale leasehold. The producer also will gain an overriding royalty stake on a portion of the new acreage.

With the two transactions PVA has “expanded our Marcellus Shale acreage position from approximately 35,000 net acres to 45,000 net acres…at a very attractive cost,” said CEO A. James Dearlove.

The first acquisition is with an undisclosed private producer that jointly operates in the shale play with PVA. Most of the acreage is in Pennsylvania’s Potter, Somerset and Tioga counties. It includes about 7,900 net acres with Marcellus Shale rights and another 23,000 net acres with deeper rights.

In connection with the first transaction, PVA granted the seller a 1.5% overriding royalty interest on the acquired acreage. Taking into account the override, PVA’s net revenue interest in the joint venture acreage is estimated at 84%.

The second transaction is with another privately held producer, also undisclosed. Most of the newly acquired acreage is in Potter County, PA, covering an estimated 2,100 net acres, with rights to the Marcellus Shale and all other formations.

“We plan to begin testing the acreage in these areas later in 2010,” said Dearlove. “In addition, we continue our leasing efforts and our review of other acquisition opportunities, as we seek to establish a significant presence in this emerging play over the next few years.”

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.