KE 41450091

Edward O. Sassower, P.C. (pro hac vice admission pending) Michael A. Condyles (VA 27807)

Joshua A. Sussberg, P.C. Peter J. Barrett (VA 46179)

Brian E. Schartz (pro hac vice admission pending) Jeremy S. Williams (VA 77469)

KIRKLAND & ELLIS LLP KUTAK ROCK LLP

KIRKLAND & ELLIS INTERNATIONAL LLP Bank of America Center

601 Lexington Avenue 1111 East Main Street, Suite 800

New York, New York 10022 Richmond, Virginia 23219

Telephone: (212) 446-4800 Telephone: (804) 644-1700

Facsimile: (212) 446-4900 Facsimile: (804) 783-6192

- and -

James H.M. Sprayregen, P.C. 

Justin R. Bernbrock (pro hac vice admission pending)

Benjamin M. Rhode (pro hac vice admission pending)

KIRKLAND & ELLIS LLP

KIRKLAND & ELLIS INTERNATIONAL LLP

300 North LaSalle

Chicago, Illinois 60654

Telephone: (312) 862-2000

Facsimile: (312) 862-2200

Proposed Co-Counsel to the Debtors 

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

RICHMOND DIVISION

)

In re: ) Chapter 11

)

PENN VIRGINIA CORPORATION, et al.,

1 ) Case No. 16-32395 (___)

)

Debtors. ) (Joint Administration Requested)

)

DISCLOSURE STATEMENT FOR THE JOINT CHAPTER 11 PLAN OF 

REORGANIZATION OF PENN VIRGINIA CORPORATION AND ITS DEBTOR AFFILIATES 

THIS IS NOT A SOLICITATION OF AN ACCEPTANCE OR REJECTION OF THE PLAN. ACCEPTANCES OR 

REJECTIONS MAY NOT BE SOLICITED UNTIL THIS DISCLOSURE STATEMENT HAS BEEN APPROVED BY 

THE COURT. THIS DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT BEEN 

APPROVED BY THE COURT. THE INFORMATION IN THIS DISCLOSURE STATEMENT IS SUBJECT TO 

CHANGE. THIS DISCLOSURE STATEMENT IS NOT AN OFFER TO SELL ANY SECURITIES AND IS NOT 

SOLICITING AN OFFER TO BUY ANY SECURITIES.

 

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, 

include: Penn Virginia Corporation (4320); Penn Virginia Holding Corp. (7384); Penn Virginia MC Corporation (0458); 

Penn Virginia MC Energy L.L.C. (0462); Penn Virginia MC Operating Company L.L.C. (0466); Penn Virginia Oil & Gas 

Corporation (7929); Penn Virginia Oil & Gas GP LLC (3686); Penn Virginia Oil & Gas LP LLC (8109); Penn Virginia Oil 

& Gas, L.P. (9487). The location of the Debtors’ service address is: Four Radnor Corporate Center, Suite 200, 100 

Matsonford Road, Radnor, Pennsylvania 19087.

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IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT2

THE DEBTORS ARE PROVIDING THE INFORMATION IN THIS DISCLOSURE STATEMENT TO 

HOLDERS OF CLAIMS AND INTERESTS FOR PURPOSES OF SOLICITING VOTES TO ACCEPT OR REJECT 

THE JOINT PLAN OF REORGANIZATION OF PENN VIRGINIA CORPORATION AND ITS DEBTOR 

AFFILIATES PURSUANT TO CHAPTER 11 OF THE BANKRUPTCY CODE. NOTHING IN THIS DISCLOSURE 

STATEMENT MAY BE RELIED UPON OR USED BY ANY ENTITY FOR ANY OTHER PURPOSE. BEFORE 

DECIDING WHETHER TO VOTE FOR OR AGAINST THE PLAN, EACH HOLDER ENTITLED TO VOTE 

SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION IN THIS DISCLOSURE STATEMENT, 

INCLUDING THE RISK FACTORS DESCRIBED IN ARTICLE VIII HEREIN.

THE PLAN IS SUPPORTED BY THE DEBTORS, HOLDERS OF 100 PERCENT OF THE RBL CLAIMS, 

AND HOLDERS OF APPROXIMATELY 86 PERCENT OF THE NOTE CLAIMS. THE DEBTORS URGE HOLDERS 

OF CLAIMS WHOSE VOTES ARE BEING SOLICITED TO ACCEPT THE PLAN.

THE DEBTORS URGE EACH HOLDER OF A CLAIM TO CONSULT WITH ITS OWN ADVISORS WITH 

RESPECT TO ANY LEGAL, FINANCIAL, SECURITIES, TAX, OR BUSINESS ADVICE IN REVIEWING THIS 

DISCLOSURE STATEMENT, THE PLAN, AND THE PROPOSED TRANSACTIONS CONTEMPLATED THEREBY. 

FURTHERMORE, THE COURT’S APPROVAL OF THE ADEQUACY OF THE INFORMATION CONTAINED IN 

THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE THE COURT’S APPROVAL OF THE PLAN.

THIS DISCLOSURE STATEMENT CONTAINS, AMONG OTHER THINGS, SUMMARIES OF THE PLAN, 

CERTAIN STATUTORY PROVISIONS, AND CERTAIN ANTICIPATED EVENTS IN THE CHAPTER 11 CASES. 

ALTHOUGH THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE, THESE 

SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY TO THE EXTENT THAT THEY DO NOT SET FORTH THE 

ENTIRE TEXT OF SUCH DOCUMENTS OR STATUTORY PROVISIONS OR EVERY DETAIL OF SUCH 

ANTICIPATED EVENTS. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A 

DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN OR 

ANY OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE, THE PLAN OR SUCH OTHER 

DOCUMENTS WILL GOVERN FOR ALL PURPOSES. FACTUAL INFORMATION CONTAINED IN THIS 

DISCLOSURE STATEMENT HAS BEEN PROVIDED BY THE DEBTORS’ MANAGEMENT EXCEPT WHERE 

OTHERWISE SPECIFICALLY NOTED. THE DEBTORS DO NOT REPRESENT OR WARRANT THAT THE 

INFORMATION CONTAINED HEREIN OR ATTACHED HERETO IS WITHOUT ANY MATERIAL INACCURACY 

OR OMISSION.

IN PREPARING THIS DISCLOSURE STATEMENT, THE DEBTORS RELIED ON FINANCIAL DATA 

DERIVED FROM THE DEBTORS’ BOOKS AND RECORDS AND ON VARIOUS ASSUMPTIONS REGARDING 

THE DEBTORS’ BUSINESSES. WHILE THE DEBTORS BELIEVE THAT SUCH FINANCIAL INFORMATION 

FAIRLY REFLECTS THE FINANCIAL CONDITION OF THE DEBTORS AS OF THE DATE HEREOF AND THAT 

THE ASSUMPTIONS REGARDING FUTURE EVENTS REFLECT REASONABLE BUSINESS JUDGMENTS, NO 

REPRESENTATIONS OR WARRANTIES ARE MADE AS TO THE ACCURACY OF THE FINANCIAL 

INFORMATION CONTAINED HEREIN OR ASSUMPTIONS REGARDING THE DEBTORS’ BUSINESSES AND 

THEIR FUTURE RESULTS AND OPERATIONS. THE DEBTORS EXPRESSLY CAUTION READERS NOT TO 

PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.

THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE, AND MAY NOT BE CONSTRUED AS, AN 

ADMISSION OF FACT, LIABILITY, STIPULATION, OR WAIVER. THE DEBTORS OR ANY OTHER 

AUTHORIZED PARTY MAY SEEK TO INVESTIGATE, FILE, AND PROSECUTE CLAIMS AND MAY OBJECT 

TO CLAIMS AFTER THE CONFIRMATION OR EFFECTIVE DATE OF THE PLAN IRRESPECTIVE OF 

WHETHER THIS DISCLOSURE STATEMENT IDENTIFIES ANY SUCH CLAIMS OR OBJECTIONS TO CLAIMS.

THE DEBTORS ARE MAKING THE STATEMENTS AND PROVIDING THE FINANCIAL 

INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT AS OF THE DATE HEREOF, UNLESS 

OTHERWISE SPECIFICALLY NOTED. ALTHOUGH THE DEBTORS MAY SUBSEQUENTLY UPDATE THE 

INFORMATION IN THIS DISCLOSURE STATEMENT, THE DEBTORS HAVE NO AFFIRMATIVE DUTY TO DO 

SO, AND EXPRESSLY DISCLAIM ANY DUTY TO PUBLICLY UPDATE ANY FORWARD-LOOKING 

STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE. 

 

2 Capitalized terms used but not defined in this disclaimer shall have the meaning ascribed to them elsewhere in this 

Disclosure Statement.

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HOLDERS OF CLAIMS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER THAT, AT THE 

TIME OF THEIR REVIEW, THE FACTS SET FORTH HEREIN HAVE NOT CHANGED SINCE THIS 

DISCLOSURE STATEMENT WAS FILED. INFORMATION CONTAINED HEREIN IS SUBJECT TO 

COMPLETION, MODIFICATION, OR AMENDMENT. THE DEBTORS RESERVE THE RIGHT TO FILE AN 

AMENDED OR MODIFIED PLAN AND RELATED DISCLOSURE STATEMENT FROM TIME TO TIME, SUBJECT 

TO THE TERMS OF THE PLAN AND THE RESTRUCTURING SUPPORT AGREEMENT. 

THE DEBTORS HAVE NOT AUTHORIZED ANY ENTITY TO GIVE ANY INFORMATION ABOUT OR 

CONCERNING THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE STATEMENT. 

THE DEBTORS HAVE NOT AUTHORIZED ANY REPRESENTATIONS CONCERNING THE DEBTORS OR THE 

VALUE OF THEIR PROPERTY OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT. 

IF THE PLAN IS CONFIRMED BY THE COURT AND THE EFFECTIVE DATE OCCURS, ALL HOLDERS 

OF CLAIMS AND INTERESTS (INCLUDING THOSE HOLDERS OF CLAIMS WHO DO NOT SUBMIT BALLOTS 

TO ACCEPT OR REJECT THE PLAN, WHO VOTE TO REJECT THE PLAN, OR WHO ARE NOT ENTITLED TO 

VOTE ON THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND THE RESTRUCTURING 

TRANSACTION CONTEMPLATED THEREBY.

THE CONFIRMATION AND EFFECTIVENESS OF THE PLAN ARE SUBJECT TO CERTAIN MATERIAL 

CONDITIONS PRECEDENT DESCRIBED HEREIN AND SET FORTH IN ARTICLE IX OF THE PLAN. THERE IS 

NO ASSURANCE THAT THE PLAN WILL BE CONFIRMED, OR IF CONFIRMED, THAT THE CONDITIONS 

REQUIRED TO BE SATISFIED FOR THE PLAN TO GO EFFECTIVE WILL BE SATISFIED (OR WAIVED). 

YOU ARE ENCOURAGED TO READ THE PLAN AND THIS DISCLOSURE STATEMENT IN ITS 

ENTIRETY, INCLUDING ARTICLE VIII, ENTITLED “RISK FACTORS,” WHICH BEGINS ON PAGE 35, BEFORE 

SUBMITTING YOUR BALLOT TO VOTE ON THE PLAN.

THE COURT’S APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE A 

GUARANTEE BY THE COURT OF THE ACCURACY OR COMPLETENESS OF THE INFORMATION 

CONTAINED HEREIN OR AN ENDORSEMENT BY THE COURT OF THE MERITS OF THE PLAN.

SUMMARIES OF THE PLAN AND STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE 

QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE PLAN. THE SUMMARIES OF THE FINANCIAL 

INFORMATION AND THE DOCUMENTS ANNEXED TO THIS DISCLOSURE STATEMENT OR OTHERWISE 

INCORPORATED HEREIN BY REFERENCE ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO

THOSE DOCUMENTS. THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE

ONLY AS OF THE DATE OF THIS DISCLOSURE STATEMENT, AND THERE IS NO ASSURANCE THAT THE 

STATEMENTS CONTAINED HEREIN WILL BE CORRECT AT ANY TIME AFTER SUCH DATE. EXCEPT AS 

OTHERWISE PROVIDED IN THE PLAN OR IN ACCORDANCE WITH APPLICABLE LAW, THE DEBTORS ARE 

UNDER NO DUTY TO UPDATE OR SUPPLEMENT THIS DISCLOSURE STATEMENT.

THE INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS INCLUDED FOR 

PURPOSES OF SOLICITING ACCEPTANCES TO, AND CONFIRMATION OF, THE PLAN AND MAY NOT BE 

RELIED ON FOR ANY OTHER PURPOSE. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE 

DISCLOSURE STATEMENT AND THE PLAN, THE RELEVANT PROVISIONS OF THE PLAN WILL GOVERN. 

THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF 

THE BANKRUPTCY CODE AND BANKRUPTCY RULE 3016(B) AND IS NOT NECESSARILY PREPARED IN 

ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER SIMILAR LAWS. THIS 

DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) OR ANY SIMILAR FEDERAL, STATE, LOCAL OR 

FOREIGN REGULATORY AGENCY, NOR HAS THE SEC OR ANY OTHER AGENCY PASSED UPON THE 

ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT. 

THE DEBTORS HAVE SOUGHT TO ENSURE THE ACCURACY OF THE FINANCIAL INFORMATION 

PROVIDED IN THIS DISCLOSURE STATEMENT; HOWEVER, THE FINANCIAL INFORMATION CONTAINED 

IN THIS DISCLOSURE STATEMENT OR INCORPORATED HEREIN BY REFERENCE HAS NOT BEEN, AND

WILL NOT BE, AUDITED OR REVIEWED BY THE DEBTORS’ INDEPENDENT AUDITORS UNLESS 

EXPLICITLY PROVIDED OTHERWISE.

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UPON CONFIRMATION OF THE PLAN, CERTAIN OF THE SECURITIES DESCRIBED IN THIS 

DISCLOSURE STATEMENT WILL BE ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 

1933, 15 U.S.C. §§ 77A–77AA, TOGETHER WITH THE RULES AND REGULATIONS PROMULGATED 

THEREUNDER (THE “SECURITIES ACT”), OR SIMILAR FEDERAL, STATE, LOCAL, OR FOREIGN LAWS, IN 

RELIANCE ON THE EXEMPTION SET FORTH IN SECTION 1145 OF THE BANKRUPTCY CODE. OTHER 

SECURITIES MAY BE ISSUED PURSUANT TO OTHER APPLICABLE EXEMPTIONS UNDER THE FEDERAL 

SECURITIES LAWS. TO THE EXTENT EXEMPTIONS FROM REGISTRATION UNDER SECTION 1145 OF THE 

BANKRUPTCY CODE OR APPLICABLE FEDERAL SECURITIES LAW DO NOT APPLY, THE SECURITIES MAY 

NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO A VALID EXEMPTION OR UPON REGISTRATION

UNDER THE SECURITIES ACT.

THE DEBTORS MAKE STATEMENTS IN THIS DISCLOSURE STATEMENT THAT ARE CONSIDERED 

FORWARD-LOOKING STATEMENTS UNDER FEDERAL SECURITIES LAWS. THE DEBTORS CONSIDER ALL 

STATEMENTS REGARDING ANTICIPATED OR FUTURE MATTERS, TO BE FORWARD-LOOKING 

STATEMENTS. FORWARD-LOOKING STATEMENTS MAY INCLUDE STATEMENTS ABOUT THE DEBTORS’: 

• BUSINESS STRATEGY; 

• ESTIMATED FUTURE RESERVES AND PRESENT VALUE THEREOF; 

• TECHNOLOGY; 

• FINANCIAL CONDITION, REVENUES, CASH FLOWS, AND EXPENSES; 

• LEVELS OF INDEBTEDNESS, LIQUIDITY, AND COMPLIANCE WITH DEBT COVENANTS; 

• FINANCIAL STRATEGY, BUDGET, PROJECTIONS, AND OPERATING RESULTS; 

• OIL, NATURAL GAS, AND NATURAL GAS LIQUID PRICES; 

• TIMING AND AMOUNT OF FUTURE PRODUCTION OF OIL, NATURAL GAS, AND NATURAL 

GAS LIQUIDS; 

• AVAILABILITY OF DRILLING AND PRODUCTION EQUIPMENT; 

• AVAILABILITY OF OILFIELD LABOR; 

• AVAILABILITY OF THIRD-PARTY OIL AND NATURAL GAS GATHERING, REFINING, 

PROCESSING, AND TRANSPORTATION CAPACITY; 

• THE AMOUNT, NATURE, AND TIMING OF CAPITAL EXPENDITURES, INCLUDING FUTURE 

EXPLORATION AND DEVELOPMENT COSTS; 

• AVAILABILITY AND TERMS OF CAPITAL; 

• DRILLING OF WELLS, INCLUDING THE DEBTORS’ IDENTIFIED DRILLING LOCATIONS; 

• SUCCESSFUL RESULTS FROM THE DEBTORS’ DRILLING; 

• MARKETING OF OIL, NATURAL GAS, AND NATURAL GAS LIQUIDS; 

• THE INTEGRATION AND BENEFITS OF ASSET AND PROPERTY ACQUISITIONS OR THE 

EFFECTS OF ASSET AND PROPERTY ACQUISITIONS OR DISPOSITIONS ON THE DEBTORS’ 

CASH POSITION AND LEVELS OF INDEBTEDNESS; 

• INFRASTRUCTURE FOR DISPOSAL OF SALT WATER AND OTHER BYPRODUCTS OF 

EXPLORATION AND PRODUCTION ACTIVITIES; 

• SOURCES OF ELECTRICITY UTILIZED IN OPERATIONS AND THE RELATED 

INFRASTRUCTURES; 

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• COSTS OF DEVELOPING THE DEBTORS’ PROPERTIES AND CONDUCTING OTHER 

OPERATIONS; 

• GENERAL ECONOMIC AND BUSINESS CONDITIONS; 

• EFFECTIVENESS OF THE DEBTORS’ RISK MANAGEMENT ACTIVITIES; 

• ENVIRONMENTAL LIABILITIES; 

• COUNTERPARTY CREDIT RISK; 

• THE OUTCOME OF PENDING AND FUTURE LITIGATION; 

• GOVERNMENTAL REGULATION AND TAXATION OF THE OIL AND NATURAL GAS 

INDUSTRY;

• DEVELOPMENTS IN OIL-PRODUCING AND NATURAL GAS-PRODUCING COUNTRIES; 

• UNCERTAINTY REGARDING THE DEBTORS’ FUTURE OPERATING RESULTS; 

• PLANS, OBJECTIVES, AND EXPECTATIONS;

• VARIATIONS IN THE MARKET DEMAND FOR, AND PRICES OF, OIL, NATURAL GAS, AND 

NATURAL GAS LIQUIDS; 

• UNCERTAINTIES ABOUT THE DEBTORS’ ESTIMATED QUANTITIES OF OIL AND NATURAL 

GAS RESERVES; 

• THE ADEQUACY OF THE DEBTORS’ CAPITAL RESOURCES AND LIQUIDITY; 

• ACCESS TO CAPITAL; 

• UNCERTAINTIES ABOUT THE DEBTORS’ ABILITY TO REPLACE RESERVES AND 

ECONOMICALLY DEVELOP THEIR CURRENT RESERVES; 

• RISKS IN CONNECTION WITH ACQUISITIONS; 

• DRILLING RESULTS; 

• THE POTENTIAL ADOPTION OF NEW GOVERNMENTAL REGULATIONS; AND 

• THE DEBTORS’ ABILITY TO SATISFY FUTURE CASH OBLIGATIONS AND 

ENVIRONMENTAL COSTS.

STATEMENTS CONCERNING THESE AND OTHER MATTERS ARE NOT GUARANTEES OF THE 

REORGANIZED DEBTORS’ FUTURE PERFORMANCE. THERE ARE RISKS, UNCERTAINTIES, AND OTHER 

IMPORTANT FACTORS THAT COULD CAUSE THE REORGANIZED DEBTORS’ ACTUAL PERFORMANCE OR 

ACHIEVEMENTS TO BE DIFFERENT FROM THOSE THEY MAY PROJECT, AND THE DEBTORS UNDERTAKE 

NO OBLIGATION TO UPDATE THE PROJECTIONS MADE HEREIN. THESE RISKS, UNCERTAINTIES, AND 

FACTORS MAY INCLUDE: THE DEBTORS’ ABILITY TO CONFIRM AND CONSUMMATE THE PLAN; THE 

POTENTIAL THAT THE PLAN MAY BE CONVERTED TO A PROCESS TO SELL SUBSTANTIALLY ALL OF

THE DEBTORS’ ASSETS UNDER SECTION 363 OF THE BANKRUPTCY CODE; THE DEBTORS’ ABILITY TO 

REDUCE THEIR OVERALL FINANCIAL LEVERAGE; THE POTENTIAL ADVERSE IMPACT OF THE CHAPTER 

11 CASES ON THE DEBTORS’ OPERATIONS, MANAGEMENT, AND EMPLOYEES, AND THE RISKS 

ASSOCIATED WITH OPERATING THE DEBTORS’ BUSINESSES DURING THE CHAPTER 11 CASES; 

CUSTOMER RESPONSES TO THE CHAPTER 11 CASES; THE DEBTORS’ INABILITY TO DISCHARGE OR 

SETTLE CLAIMS DURING THE CHAPTER 11 CASES; GENERAL ECONOMIC, BUSINESS, AND MARKET

CONDITIONS; CURRENCY FLUCTUATIONS; INTEREST RATE FLUCTUATIONS; PRICE INCREASES; 

EXPOSURE TO LITIGATION; A DECLINE IN THE DEBTORS’ MARKET SHARE DUE TO COMPETITION OR 

PRICE PRESSURE BY CUSTOMERS; THE DEBTORS’ ABILITY TO IMPLEMENT COST REDUCTION 

INITIATIVES IN A TIMELY MANNER; THE DEBTORS’ ABILITY TO DIVEST EXISTING BUSINESSES; 

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FINANCIAL CONDITIONS OF THE DEBTORS’ CUSTOMERS; ADVERSE TAX CHANGES; LIMITED ACCESS 

TO CAPITAL RESOURCES; CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS; TRADE 

BALANCE; NATURAL DISASTERS; GEOPOLITICAL INSTABILITY; AND THE EFFECTS OF GOVERNMENTAL 

REGULATION ON THE DEBTORS’ BUSINESSES.

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TABLE OF CONTENTS

Page

I. INTRODUCTION......................................................................................................................................... 1

II. PRELIMINARY STATEMENT .................................................................................................................. 1

III. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND 

PLAN.............................................................................................................................................................. 5

A. What is chapter 11?........................................................................................................................... 5

B. Why are the Debtors sending me this Disclosure Statement? ........................................................... 6

C. Am I entitled to vote on the Plan?..................................................................................................... 6

D. What will I receive from the Debtors if the Plan is consummated? .................................................. 6

E. What will I receive from the Debtors if I hold an Allowed Administrative Claim, DIP 

Facility Claim, or a Priority Tax Claim?.........................................................................................10

F. Are any regulatory approvals required to consummate the Plan? ...................................................11

G. What happens to my recovery if the Plan is not confirmed or does not go effective? ....................11

H. If the Plan provides that I get a distribution, do I get it upon Confirmation or when the 

Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and 

“Consummation?”...........................................................................................................................12

I. What are the sources of Cash and other consideration required to fund the Plan?..........................12

J. Are there risks to owning the New Common Stock upon emergence from chapter 11?.................12

K. Is there potential litigation related to the Plan?...............................................................................12

L. What is the Management Incentive Plan and how will it affect the distribution I receive 

under the Plan?................................................................................................................................12

M. Will the final amount of Allowed General Unsecured Claims affect the recovery of 

holders of Allowed General Unsecured Claims under the Plan? ....................................................13

N. How will Claims asserted with respect to rejection damages affect my recovery under the 

Plan?................................................................................................................................................13

O. How will the resolution of certain contingent, unliquidated, and disputed litigation 

Claims affect my recovery under the Plan?.....................................................................................13

P. How will the preservation of the Causes of Action impact my recovery under the Plan? ..............13

Q. How will the release of Avoidance Actions affect my recovery under the Plan? ...........................14

R. Will there be releases and exculpation granted to parties in interest as part of the Plan? ...............14

S. What impact does the Claims Bar Date have on my Claim? ..........................................................18

T. What is the deadline to vote on the Plan? .......................................................................................19

U. How do I vote for or against the Plan?............................................................................................19

V. Why is the Bankruptcy Court holding a Confirmation Hearing? ....................................................19

W. When is the Confirmation Hearing set to occur? ............................................................................19

X. What is the purpose of the Confirmation Hearing?.........................................................................19

Y. What is the effect of the Plan on the Debtors’ ongoing business? ..................................................19

Z. Will any party have significant influence over the corporate governance and operations of 

the Reorganized Debtors? ...............................................................................................................20

AA. Who do I contact if I have additional questions with respect to this Disclosure Statement 

or the Plan? .....................................................................................................................................20

BB. Do the Debtors recommend voting in favor of the Plan?................................................................20

CC. Who Supports the Plan?..................................................................................................................20

IV. THE DEBTORS’ RESTRUCTURING SUPPORT AGREEMENT AND PLAN ................................. 21

A. Restructuring Support Agreement...................................................................................................21

B. The Plan ..........................................................................................................................................21

V. THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW...........24

A. The Debtors’ Corporate History......................................................................................................24

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B. The Debtors’ Key Assets and Operations.......................................................................................25

C. The Debtors’ Key Contractual Relationships and Hedging Arrangements.....................................25

D. The Debtor’s Prepetition Capital Structure .....................................................................................26

VI. EVENTS LEADING TO THE CHAPTER 11 FILINGS.........................................................................28

A. Adverse Market Conditions ............................................................................................................28

B. Proactive Approach to Addressing Liquidity Constraints...............................................................28

C. The Restructuring Negotiations, RBL Amendments, and Third-Party Process. .............................28

D. The Restructuring Support Agreement and DIP Facility ................................................................31

VII. MATERIAL DEVELOPMENTS AND ANTICIPATED EVENTS OF THE CHAPTER 11 

CASES..........................................................................................................................................................32

A. Corporate Structure upon Emergence .............................................................................................32

B. Expected Timetable of the Chapter 11 Cases..................................................................................33

C. First Day Relief...............................................................................................................................33

D. Other Procedural and Administrative Motions ...............................................................................33

E. Appointment of Official Committee ...............................................................................................34

F. Approval Motion.............................................................................................................................34

G. Other Litigation Matters..................................................................................................................34

H. Rejection and Assumption of Executory Contracts and Unexpired Leases....................................35

VIII. RISK FACTORS.........................................................................................................................................35

A. Bankruptcy Law Considerations.....................................................................................................35

B. Risks Related to Recoveries under the Plan....................................................................................38

C. Risks Related to the Debtors’ and the Reorganized Debtors’ Businesses.......................................40

IX. SOLICITATION AND VOTING PROCEDURES ..................................................................................47

A. Holders of Claims Entitled to Vote on the Plan ..............................................................................48

B. Voting Record Date ........................................................................................................................48

C. Voting on the Plan...........................................................................................................................48

D. Ballots Not Counted........................................................................................................................49

X. RIGHTS OFFERING PROCEDURES.....................................................................................................49

XI. CONFIRMATION OF THE PLAN...........................................................................................................52

A. Requirements for Confirmation of the Plan ....................................................................................52

B. Best Interests of Creditors/Liquidation Analysis ............................................................................52

C. Feasibility........................................................................................................................................53

D. Acceptance by Impaired Classes.....................................................................................................53

E. Confirmation without Acceptance by All Impaired Classes........................................................... 54

F. Valuation of the Debtors.................................................................................................................54

XII. CERTAIN SECURITIES LAW MATTERS ............................................................................................55

A. New Common Stock .......................................................................................................................55

B. The Rights Offering Shares and Commitment Premium ................................................................57

XIII. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE 

PLAN............................................................................................................................................................59

A. Introduction.....................................................................................................................................59

B. Certain U.S. Federal Income Tax Consequences to the Debtors and the Reorganized 

Debtors............................................................................................................................................60

C. Certain U.S. Federal Income Tax Consequences to Certain U.S. Holders of Claims.....................63

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D. Certain U.S. Federal Income Tax Consequences to Certain Non-U.S. Holders of Claims.............66

E. Information Reporting and Back-Up Withholding .........................................................................68

XIV. RECOMMENDATION ..............................................................................................................................69

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EXHIBITS3

EXHIBIT A Plan of Reorganization

EXHIBIT B Restructuring Support Agreement 

EXHIBIT C Corporate Organization Chart 

EXHIBIT D Disclosure Statement Order

EXHIBIT E Rights Offering Procedures 

EXHIBIT F Liquidation Analysis 

EXHIBIT G Financial Projections

EXHIBIT H Valuation Analysis

 

3 Each Exhibit is incorporated herein by reference. The Debtors will file each of the Exhibits in advance of the hearing to 

consider the adequacy of this Disclosure Statement and related solicitation procedures.

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I. INTRODUCTION

Penn Virginia Corporation (“Penn Virginia”) and its debtor affiliates, as debtors and debtors in 

possession (collectively, the “Debtors”), submit this disclosure statement (this “Disclosure Statement”) 

pursuant to section 1125 of the Bankruptcy Code to holders of Claims against the Debtors in connection 

with the solicitation of acceptances with respect to the Joint Chapter 11 Plan of Reorganization of Penn 

Virginia Corporation and its Debtor Affiliates (the “Plan”), dated May 12, 2016.1 A copy of the Plan is 

attached hereto as Exhibit A and incorporated herein by reference. The Plan constitutes a separate 

chapter 11 plan for Penn Virginia and each of the other Debtors. 

THE DEBTORS, HOLDERS OF 100 PERCENT OF THE RBL CLAIMS, AND 

HOLDERS OF APPROXIMATELY 86 PERCENT OF THE NOTE CLAIMS (COLLECTIVELY, 

THE “CONSENTING PARTIES”) SUPPORT THE PLAN AND THE DEBTORS BELIEVE 

THAT THE COMPROMISES CONTEMPLATED UNDER THE PLAN ARE FAIR AND 

EQUITABLE, MAXIMIZE THE VALUE OF THE DEBTORS’ ESTATES, AND PROVIDE THE 

BEST RECOVERY TO CLAIM HOLDERS. AT THIS TIME, THE DEBTORS BELIEVE THIS 

IS THE BEST AVAILABLE ALTERNATIVE FOR COMPLETING THE CHAPTER 11 CASES. 

THE DEBTORS STRONGLY RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN.

II. PRELIMINARY STATEMENT 

The Debtors are an oil and natural gas exploration and production (“E&P”) company with 

corporate headquarters in Radnor, Pennsylvania, and substantial operational and administrative functions 

located in Houston, Texas. The Debtors are exclusively engaged in the exploration and production of oil 

and natural gas reserves in the United States. The Debtors’ most significant assets by far are located in 

the Eagle Ford shale in South Texas, where they own a contiguous position of approximately 100,000 net 

acres. The Debtors also own oil and natural gas-producing properties in the Granite Wash in Oklahoma 

and the Marcellus Shale in Pennsylvania; the Debtors’ non-Eagle Ford aggregate holdings are 

approximately 20,300 net acres. The Debtors primarily produce crude oil, natural gas, and natural gas 

liquids (“NGLs”). In 2015, the Debtors’ total production was comprised of 80 percent crude oil and 

NGLs and 20 percent natural gas. Of the Debtors’ 44 MMBOE2 in total proved reserves3 as of December 

31, 2015, 84 percent were oil and NGLs and 92 percent of these reserves are located in the Eagle Ford

shale. 

As of the Petition Date, the Debtors’ capital structure consisted of: (a) approximately $1.2 billion 

in aggregate funded-debt obligations; and (b) preferred equity interests with a stated aggregate liquidation 

preference of approximately $211 million. The Debtors’ funded-debt obligations included: 

(a) approximately $113 million outstanding under a senior secured reserve-based revolving credit facility 

(the “RBL Facility”); and (b) $1,075 million in principal and approximately $47 million in unpaid interest 

outstanding under certain senior unsecured notes (i.e., the Notes). The Debtors also have 3,864 shares of 

 

1 Capitalized terms used but not otherwise defined in this Disclosure Statement shall have the meaning ascribed to such terms 

in the Plan. The summary of the Plan provided herein is qualified in its entirety by reference to the Plan. In the case

of any inconsistency between this Disclosure Statement and the Plan, the Plan will govern. 

2 “MMBOE” or “million barrels of oil equivalent” is a standard unit of measurement used in the oil and natural gas 

exploration and production industry. The measurement indicates the amount of energy that is equivalent to the amount of 

crude oil in a single barrel.

3 “Proved reserves” are those quantities of oil and gas that geological and engineering data demonstrate with reasonable 

certainty to be economically producible from a given date forward from known reservoirs under existing economic and 

operating conditions.

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outstanding Series A Preferred Stock and 17,152 shares of outstanding Series B Preferred Stock, each 

with a stated liquidation preference of $10,000 per share. As of December 31, 2015, the Debtors reported 

total assets of approximately $518 million and total debt of approximately $1.2 billion. For the twelve

months ended December 31, 2015, the Debtors reported approximately $305 million of total revenue—

down from approximately $637 million for the twelve months ended December 31, 2014. 

Operating and market conditions in the oil and gas industry have undergone a profound 

transformation in recent years. In the fall of 2014, oil prices plummeted due principally to global 

oversupply and have yet to recover— falling from over $100 Bbl4 to below $27 per Bbl in February 2016

and currently trading at approximately $46 per Bbl. Simultaneously, natural gas prices, in response to 

continued growth in domestic production and an unseasonably mild weather, sustained a marked 

decline—falling below $1.70 per MMBtu5 in December 2015 and are currently trading at approximately 

$2.16 per MMBtu. In response, upstream producers in the Eagle Ford and across the United States have 

experienced significantly reduced cash flows, which has in turn had a negative impact on their ability to 

service funded-debt obligations, pay general and administrative costs, and maintain drilling activities so 

that production remains constant. Indeed, over the course of 2015, the Debtors significantly reduced 

employee headcount and reduced their number of operating rigs in the Eagle Ford from eight to one. In 

February 2016, the Debtors suspended their drilling program entirely. The following chart, showing the 

indexed performance of commodities prices against the trading prices of the Notes and Penn Virginia’s 

common shares, demonstrates just how closely the Debtors’ success is tied to commodities prices:

 

4 “Bbl,” or “barrel,” is a unit of volume for crude oil and petroleum products. One bbl equals approximately 42 U.S. gallons.

5 “MMBtu” is a unit of measurement meaning one million British thermal units. 

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In line with the general market decline, the trading prices of Penn Virginia’s common shares and 

the Notes have fallen to a fraction of their historical value—a market reflection of the toll these difficult 

conditions and substantially lower commodities prices have taken on the Debtors’ businesses. Despite 

recent gains, the near-term outlook for crude oil and natural gas prices remains uncertain. 

Despite the Debtors’ efforts to mitigate the financial strain brought on by current market 

conditions through non-core asset divestitures and operational “rightsizing,” the capital-intensive nature 

of the Debtors’ businesses, together with the Debtors’ highly leveraged capital structure, have made it 

difficult to withstand current headwinds. As a result, in January 2016, the Debtors engaged financial 

advisors and legal counsel to advise management and the board of directors regarding potential strategic 

alternatives to enhance the Debtors’ liquidity and address their capital structure. Further, on March 22, 

2016, the Debtors appointed R. Seth Bullock of Alvarez & Marsal North America, LLC (“A&M”) as 

chief restructuring officer. Over the first four months of 2016, the Debtors and their advisors engaged the 

RBL Agent, the RBL Lenders, and an ad hoc committee of Noteholders (the “Ad Hoc Committee”)

regarding various restructuring alternatives—both out-of-court and in-court—to strengthen the Debtors’ 

balance sheet, provide near-term liquidity support, and create a sustainable capital structure to position the 

Debtors for long-term success. 

The Debtors’ efforts in this regard were ultimately successful. After extensive, hard-fought 

negotiations, the Debtors, lenders holding 100 percent of the principal amount of the loans arising under 

the RBL Facility, and holders of approximately 86 percent of the principal amount of the Notes agreed to 

the terms of the restructuring set forth in the Restructuring Support Agreement, a copy of which is 

attached hereto as Exhibit B. As discussed herein, in the months immediately preceding the Petition 

Date, the Debtors explored various leverage points with the RBL Lenders and Noteholders, including the 

strategic liquidation of certain in-the-money hedging agreements, and arrived at a resolution under which 

both the RBL Lenders and the Noteholders agreed both to certain concessions and to provide postemergence sources of liquidity.

The Restructuring Support Agreement contemplates a swift restructuring by which the Debtors

will eliminate approximately $1.3 billion in funded-debt obligations and preferred equity interests and 

minimize the time and expense associated with the Chapter 11 Cases. To capture the full benefit of the 

compromises embodied in the Restructuring Support Agreement, the Debtors must move swiftly through 

chapter 11. The Restructuring Support Agreement sets forth the following milestones (collectively, the 

“Milestones”): 

• no later than three days after the Petition Date, the Bankruptcy 

Court shall have entered an interim order approving the DIP 

Facility; 

• no later than fifteen days after the Petition Date, the Debtors 

shall file with the Bankruptcy Court (a) a motion to establish a 

bar date for filing proofs of claim; and (b) the schedules of assets 

and liabilities and statements of financial affairs (the “Schedules 

and Statements”) for each Debtor; 

• no later than thirty days after the Petition Date, (a) the 

Bankruptcy Court shall have entered a final order approving the 

DIP Facility, (b) the Bankruptcy Court shall have entered an 

order approving the assumption of the Restructuring Support 

Agreement and Backstop Commitment Agreement (as defined in 

the Plan), and (c) the Debtors shall have delivered a proposal 

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with regard to the treatment of material contracts to the Majority 

Consenting Noteholders (as defined in the Plan);

• no later than forty-five days after the Petition Date, the 

Bankruptcy Court shall have entered an order (the “Disclosure 

Statement Order”) approving the adequacy of this Disclosure 

Statement and related solicitation procedures (including the 

Rights Offering procedures); 

• no later than forty-five days after the entry of the Disclosure 

Statement Order, the Bankruptcy Court shall commence a 

hearing to confirm the Plan (the “Confirmation Hearing”);

• no later than five days after the commencement of the 

Confirmation Hearing, the Bankruptcy Court shall enter an order 

(the “Confirmation Order”) confirming the Plan; and 

• no later than twenty-five days after entry of the Confirmation 

Order, the Debtors shall consummate the transactions 

contemplated by the Plan. 

Further, under the Restructuring Support Agreement, certain of the RBL Lenders (in their 

capacity as DIP Lenders) have agreed to fund a $25 million new money, multi-draw debtor-in-possession 

credit facility. Additionally, on the Effective Date of the Plan, the Debtors will (a) complete a $50

million rights offering backstopped by certain of the Noteholders as Backstop Parties and (b) enter into a 

new, reserve-based revolving exit credit facility with an initial availability of up to $128 million funded 

by certain of the RBL Lenders as Exit Facility Lenders. The DIP Facility, the Rights Offering, and the 

Exit Facility provide substantial benefits to the Debtors and drive recoveries (in both quantum and form 

of consideration) for the Debtors’ stakeholders.

The core terms of the Restructuring Support Agreement will be implemented through a chapter 

11 plan of reorganization—namely, the Plan (described more fully in Article IV.B of this Disclosure 

Statement, entitled “The Plan,” which begins on page 21)—under which:

• holders of administrative and priority Claims shall be paid in 

full, in cash on the Effective Date; 

• holders of DIP Claims shall receive payment in full, in cash on 

the Effective Date, funded from cash on hand and the proceeds 

of the Exit Facility and the Rights Offering; 

• holders of Other Secured Claims shall receive such treatment as 

to render their claims unimpaired; 

• holders of RBL Claims shall receive payment in full, in cash on 

the Effective Date, funded from cash on hand and the proceeds 

of the Exit Facility and the Rights Offering; 

• holders of Note Claims and holders of General Unsecured 

Claims, collectively, shall each receive their pro rata share of an 

aggregate of 100% of the New Common Stock on the Effective 

Date, subject to dilution on account of the Management 

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Incentive Plan Equity, any fees payable in New Common Stock 

under the terms of the Backstop Commitment Agreement 

(including the Commitment Premium), and the New Common 

Stock issued in the Rights Offering; 

• holders of Note Claims shall also be entitled to participate in the 

Rights Offering in accordance with the Backstop Commitment 

Agreement, the Restructuring Support Agreement, the Plan, and 

certain Rights Offering Procedures; 

• all existing Interests in Penn Virginia shall be canceled, 

extinguished, and discharged; and 

• intercompany Claims and Interests shall be reinstated or 

canceled at the Debtors’ or the reorganized Debtors’ option.

In short, the Restructuring Support Agreement provides the Debtors with the resources and 

flexibility to pursue a value-maximizing restructuring transaction. In addition, the compromises and 

settlements embodied therein, and to be implemented pursuant to the Plan, preserve value by enabling the 

Debtors to avoid protracted, value-destructive litigation that would delay the Debtors’ emergence from 

chapter 11. Instead of litigating with the RBL Lenders and Noteholders over potential recoveries, the 

RBL Lenders have agreed to (a) become parties to the Restructuring Support Agreement, (b) fund the DIP 

Facility, and (c) participate in the Exit Facility and certain of the Noteholders have agreed to backstop the 

Rights Offering—each of which commitments provide significant value to the Debtors. As of the Petition 

Date, holders of approximately 87 percent in principal of the Debtors’ funded-debt obligations have 

agreed to support the restructuring contemplated by the Restructuring Support Agreement and Plan, 

including the overwhelming majority of the Noteholders—the Debtors’ single largest unsecured creditor 

constituency. 

The formulation of the Restructuring Support and Plan is a significant achievement for the 

Debtors in the face of historic commodity price declines and a depressed operating environment. The 

Debtors strongly believe that the Plan is in the best interests of the Debtors’ estates, represents the best 

available alternative, and significantly deleverages the Debtors’ consolidated balance sheet at a critical 

time when the commodity cycle downturn is negatively affecting highly-leveraged companies within the 

oil and gas industry as a whole. Given the Debtors’ core strengths, including its experienced management 

team and the strategic location of its assets, the Debtors are confident that they can implement the 

Restructuring Support Agreement’s balance sheet restructuring to ensure the Debtors’ long-term viability. 

III. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND 

PLAN

A. What is chapter 11? 

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. In addition 

to permitting debtor rehabilitation, chapter 11 promotes equality of treatment for creditors and similarly 

situated equity interest holders, subject to the priority of distributions prescribed by the Bankruptcy Code. 

The commencement of a chapter 11 case creates an estate that comprises all of the legal and 

equitable interests of the debtor as of the date the chapter 11 case is commenced. The Bankruptcy Code 

provides that the debtor may continue to operate its business and remain in possession of its property as a 

“debtor in possession.”

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Consummating a plan is the principal objective of a chapter 11 case. A bankruptcy court’s 

confirmation of a plan binds the debtor, any person acquiring property under the plan, any creditor or 

equity interest holder of the debtor, and any other entity as may be ordered by the bankruptcy court. 

Subject to certain limited exceptions, the order issued by a bankruptcy court confirming a plan provides 

for the treatment of the debtor’s liabilities in accordance with the terms of the confirmed plan. 

B. Why are the Debtors sending me this Disclosure Statement?

The Debtors are seeking to obtain Bankruptcy Court approval of the Plan. Before soliciting 

acceptances of the Plan, section 1125 of the Bankruptcy Code requires the Debtors to prepare a disclosure 

statement containing adequate information of a kind, and in sufficient detail, to enable a hypothetical 

reasonable investor to make an informed judgment regarding acceptance of the Plan and to share such 

disclosure statement with all holders of claims and interests whose votes on the Plan are being solicited. 

This Disclosure Statement is being submitted in accordance with these requirements. 

C. Am I entitled to vote on the Plan? 

Your ability to vote on, and your distribution under, the Plan, if any, depends on what type of 

Claim or Interest you hold. Each category of holders of Claims or Interests, as set forth in Article III of 

the Plan pursuant to section 1122(a) of the Bankruptcy Code, is referred to as a “Class.” Each Class’s 

respective voting status is set forth below. 

Class Claim or Interest Status Voting Rights

1 Secured Tax Claims Unimpaired Presumed to Accept

2 Other Secured Claims Unimpaired Presumed to Accept

3 Other Priority Claims Unimpaired Presumed to Accept

4 RBL Claims Unimpaired Presumed to Accept

5 Note Claims Impaired Entitled to Vote

6 General Unsecured Claims Impaired Entitled to Vote

7 Intercompany Claims Unimpaired/Impaired Not Entitled to Vote

8 Intercompany Interests Unimpaired/Impaired Not Entitled to Vote

9 Interests in Penn Virginia Impaired Deemed to Reject

D. What will I receive from the Debtors if the Plan is consummated?

The following chart provides a summary of the anticipated recovery to holders of Claims and 

Interests under the Plan. Any estimates of Claims and Interests in this Disclosure Statement may vary 

from the final amounts allowed by the Bankruptcy Court. Your ability to receive distributions under the 

Plan depends upon the ability of the Debtors to obtain Confirmation and meet the conditions necessary to 

consummate the Plan. 

THE PROJECTED RECOVERIES SET FORTH IN THE TABLE BELOW ARE 

ESTIMATES ONLY AND THEREFORE ARE SUBJECT TO CHANGE. FOR A COMPLETE 

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DESCRIPTION OF THE DEBTORS’ CLASSIFICATION AND TREATMENT OF CLAIMS 

AND INTERESTS, REFERENCE SHOULD BE MADE TO THE ENTIRE PLAN.6

SUMMARY OF EXPECTED RECOVERIES

Class

Claim/Equity

Interest Treatment of Claim/Equity Interest

Projected 

Amount of 

Claims

Projected 

Recovery 

Under 

the Plan

1 Secured Tax 

Claims

Except to the extent that a holder of an 

Allowed Secured Tax Claim agrees to a less 

favorable treatment, in full and final 

satisfaction, compromise, settlement, release, 

and discharge of and in exchange for each 

Allowed Secured Tax Claim, each such holder 

shall receive, as applicable: (A) if the Allowed 

Secured Tax Claim is due and payable on or 

before the Effective Date, Cash in an amount 

equal to such Allowed Secured Tax Claim; or 

(B) if the Allowed Secured Tax Claim is not 

due and payable on or before the Effective 

Date, Cash in an amount as may be due and 

payable under applicable non-bankruptcy law 

or in the ordinary course of business. 

$[●] 100% 

2 Other Secured 

Claims

Except to the extent that a holder of an 

Allowed Other Secured Claim agrees to a less 

favorable treatment, in full and final 

satisfaction, compromise, settlement, release, 

and discharge of and in exchange for each 

Allowed Other Secured Claim, each such 

holder shall receive, as the Debtors or the 

Reorganized Debtors, as applicable, 

determine: (A) payment in full, in Cash, of the 

$[●] 100% 

 

6 The recoveries set forth below may change based upon changes in the amount of Claims that are “Allowed” as well as other 

factors related to the Debtors’ business operations and general economic conditions. “Allowed” means with respect to any 

Claim, except as otherwise provided in the Plan: (a) a Claim that is evidenced by a Proof of Claim Filed by the Claims Bar 

Date (or for which Claim under the Plan, the Bankruptcy Code, or pursuant to a Final Order a Proof of Claim is not or shall 

not be required to be Filed); (b) a Claim that is listed in the Schedules as not contingent, not unliquidated, and not disputed, 

and for which no Proof of Claim, as applicable, has been timely Filed; or (c) a Claim Allowed pursuant to the Plan or a Final 

Order of the Bankruptcy Court; provided that with respect to a Claim described in clauses (a) and (b) above, such Claim 

shall be considered Allowed only if and to the extent that with respect to such Claim no objection to the allowance thereof 

has been interposed within the applicable period of time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or 

the Bankruptcy Court, or such an objection is so interposed and the Claim, as applicable, shall have been Allowed by a Final 

Order. Any Claim that has been or is hereafter listed in the Schedules as contingent, unliquidated, or disputed, and for 

which no Proof of Claim is or has been timely Filed, is not considered Allowed and shall be expunged without further action 

by the Debtors and without further notice to any party or action, approval, or order of the Bankruptcy Court. 

Notwithstanding anything to the contrary herein, no Claim of any Entity subject to section 502(d) of the Bankruptcy Code 

shall be deemed Allowed unless and until such Entity pays in full the amount that it owes such Debtor or Reorganized 

Debtor, as applicable. For the avoidance of doubt, a Proof of Claim Filed after the Claims Bar Date shall not be Allowed for

any purposes whatsoever absent entry of a Final Order allowing such late-filed Claim. “Allow” and “Allowing” shall have 

correlative meanings.

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SUMMARY OF EXPECTED RECOVERIES

Class

Claim/Equity

Interest Treatment of Claim/Equity Interest

Projected 

Amount of 

Claims

Projected 

Recovery 

Under 

the Plan

unpaid portion of its Allowed Other Secured 

Claim on the latest of: (i) on or as soon as 

reasonably practicable after the Effective Date 

if such Allowed Other Secured Claim is 

Allowed as of the Effective Date; (ii) on or as 

soon as reasonably practicable after the date 

such Other Secured Claim is Allowed; and (iii) 

the date such Allowed Other Secured Claim 

becomes due and payable, or as soon thereafter 

as is reasonably practicable; (B) the collateral 

securing its Allowed Other Secured Claim; or

(C) such other treatment rendering its Allowed 

Other Secured Claim Unimpaired in 

accordance with section 1124 of the 

Bankruptcy Code. 

3 Other Priority

Claims

Except to the extent that a holder of an 

Allowed Other Priority Claim agrees to less 

favorable treatment, in full and final 

satisfaction, compromise, settlement, release, 

and discharge of and in exchange for each 

Allowed Other Priority Claim, each holder of 

an Allowed Other Priority Claim shall receive 

payment in full, in Cash, of the unpaid portion 

of its Allowed Other Priority Claim on the 

latest of: (i) on or as soon as reasonably 

practicable after the Effective Date if such 

Allowed Other Priority Claim is Allowed as of 

the Effective Date; (ii) on or as soon as 

reasonably practicable after the date such 

Other Priority Claim is Allowed; and (iii) the 

date such Allowed Other Priority Claim 

becomes due and payable, or as soon thereafter 

as is reasonably practicable. 

$[●] million 100% 

4 RBL Claims Except to the extent that a holder of an 

Allowed RBL Claim agrees to less favorable 

treatment, in full and final satisfaction, 

compromise, settlement, release, and discharge 

of and in exchange for each Allowed RBL

Claim, each holder of an Allowed RBL Claim 

shall be paid in full in Cash on the Effective 

Date on account of such Allowed RBL Claim, 

funded from Cash on hand, the proceeds from 

the Exit Facility, and the proceeds from the 

$112,552,819.70 100% 

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SUMMARY OF EXPECTED RECOVERIES

Class

Claim/Equity

Interest Treatment of Claim/Equity Interest

Projected 

Amount of 

Claims

Projected 

Recovery 

Under 

the Plan

Rights Offering.

5 Note Claims On the Effective Date, or as soon thereafter as 

reasonably practicable, except to the extent 

that a holder of an Allowed Note Claim agrees 

to a less favorable treatment in full and final 

satisfaction, compromise, settlement, release, 

and discharge of and in exchange for each 

Allowed Note Claim, each holder of an 

Allowed Note Claim shall receive (i) its Pro 

Rata share of the New Common Stock Equity 

Pool and (ii) if it is an Accredited Investor (as 

defined in the Securities Act of 1933, as 

amended), its Subscription Rights to purchase 

its Pro Rata Share of the Rights Offering

Shares in accordance with the Rights Offering 

Procedures on account of such Allowed Note 

Claim. 

$1,075,000.00 [●]%7

6 General 

Unsecured 

Claims

On the Effective Date, or as soon thereafter as 

reasonably practicable, except to the extent 

that a holder of an Allowed General 

Unsecured Claim agrees to a less favorable 

treatment, in full and final satisfaction, 

compromise, settlement, release, and discharge 

of and in exchange for each Allowed General 

Unsecured Claim, each holder of an Allowed 

General Unsecured Claim shall receive its Pro 

Rata share of the New Common Stock made 

available in the New Common Stock Equity 

Pool on account of such Allowed General 

Unsecured Claim. 

$[●] [●]%8

7 Intercompany 

Claims

Intercompany Claims shall be Reinstated as of 

the Effective Date or, at the Debtors’ or the 

Reorganized Debtors’ option, in consultation 

N/A 100%/0% 

 

7 The projected recovery under the Plan for Allowed Note Claims will vary depending on the level of Noteholder participation 

in the Rights Offering. For example, if: (a) no Noteholders participate in the Rights Offering, the projected recovery under 

the Plan for Allowed Note Claims is [●] percent; (b) 50 percent of Noteholders participate in the Rights Offering, the 

projected recovery under the Plan for Allowed Note Claims is [●] percent; and (c) 100 percent of Noteholders participate in 

the Rights Offering, the projected recovery under the Plan for Allowed Note Claims is [●] percent.

8 The projected recovery under the Plan for holders of Allowed General Unsecured Claims will vary based on the amount of 

Allowed General Unsecured Claims. The Debtors will not have an estimate of the amount of Allowed General Unsecured 

Claims until they file the Statements and Schedules—which, in accordance with the Milestones, shall be no later than fifteen 

days after the Petition Date.

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SUMMARY OF EXPECTED RECOVERIES

Class

Claim/Equity

Interest Treatment of Claim/Equity Interest

Projected 

Amount of 

Claims

Projected 

Recovery 

Under 

the Plan

with the DIP Agent, the Ad Hoc Committee, 

and the RBL Agent, shall be cancelled. No 

distribution shall be made on account of any 

Intercompany Claim. 

8 Intercompany 

Interests

Intercompany Interests shall be Reinstated as 

of the Effective Date or, at the Debtors’ or the 

Reorganized Debtors’ option, in consultation 

with the DIP Agent, the Ad Hoc Committee, 

and the RBL Agent, shall be cancelled. No 

distribution shall be made on account of any 

Intercompany Interests. 

N/A 100%/0% 

9 Interests in 

Penn Virginia

On the Effective Date, all Interests9 in Penn 

Virginia will be cancelled and the holders of 

Interests in Penn Virginia shall not receive or 

retain any distribution, property, or other value 

on account of their Interests in Penn Virginia. 

N/A 0% 

E. What will I receive from the Debtors if I hold an Allowed Administrative Claim, DIP 

Facility Claim, or a Priority Tax Claim? 

In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, DIP 

Facility Claims, and Priority Tax Claims have not been classified and, thus, are excluded from the Classes 

of Claims and Interests set forth in Article III of the Plan. 

1. Administrative Claims 

Administrative Claims will be satisfied as set forth in Section 2.1 of the Plan, as summarized 

herein. Unless otherwise agreed to by the holder of an Allowed Administrative Claim and the Debtors, or 

the Reorganized Debtors, as applicable, each holder of an Allowed Administrative Claim (other than 

holders of Professional Claims, DIP Claims, and Claims for fees and expenses pursuant to section 1930 of 

chapter 123 of title 28 of the United States Code) will receive in full and final satisfaction of its Allowed 

Administrative Claim an amount of Cash equal to the amount of such Allowed Administrative Claim 

either: (a) if an Administrative Claim is Allowed on or prior to the Effective Date, on the Effective Date 

or as soon as reasonably practicable thereafter (or, if not then due, when such Allowed Administrative 

Claim is due or as soon as reasonably practicable thereafter); (b) if such Administrative Claim is not 

 

9 “Interests” means the common stock, preferred stock, limited liability company interests, and any other equity, ownership, 

or profits interests of any Debtor, including, without limitation, the Preferred Stock, and the Penn Virginia Common Stock, 

and options, warrants, rights, or other securities or agreements to acquire the common stock, preferred stock, limited liability 

company interests, or other equity, ownership, or profits interests of any Debtor (whether or not arising under or in 

connection with any employment agreement), including any Claim against the Debtors that is subject to subordination 

pursuant to section 510(b) of the Bankruptcy Code arising from or related to any of the foregoing, provided, however, that 

the term “Interests” shall not include the Intercompany Interests. 

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Allowed as of the Effective Date, unless otherwise agreed, no later than 30 days after the date on which 

an order Allowing such Administrative Claim becomes a Final Order, or as soon as reasonably practicable 

thereafter; (c) if such Allowed Administrative Claim is based on liabilities incurred by the Debtors in the 

ordinary course of their business after the Petition Date, in accordance with the terms and conditions of 

the particular transaction giving rise to such Allowed Administrative Claim without any further action by 

the holders of such Allowed Administrative Claim (for the avoidance of doubt, holders of such Allowed 

Administrative Claims shall not be required to file a request for payment of administrative claim as 

provided in the second paragraph of Section 2.1 of the Plan); (d) at such time and upon such terms as may 

be agreed upon by such holder and the Debtors or the Reorganized Debtors, as applicable; or (e) at such 

time and upon such terms as set forth in an order of the Bankruptcy Court. 

Except as otherwise provided in Section 2.1 of the Plan, and except with respect to 

Administrative Claims that are Professional Claims, requests for payment of Administrative Claims must 

be Filed and served on the Reorganized Debtors pursuant to the procedures specified in the Confirmation 

Order and the notice of entry of the Confirmation Order no later than the Administrative Claims Bar Date. 

Holders of Administrative Claims that are required to, but do not, File and serve a request for payment of 

such Administrative Claims by such date shall be forever barred, estopped, and enjoined from asserting 

such Administrative Claims against the Debtors or their property and such Administrative Claims shall be 

deemed discharged as of the Effective Date. Objections to such requests, if any, must be Filed and served 

on the Reorganized Debtors and the requesting party no later than 60 days after the Effective Date. 

Notwithstanding the foregoing, no request for payment of an Administrative Claim need be Filed with 

respect to an Administrative Claim previously Allowed. 

2. DIP Facility Claims

DIP Facility Claims will be satisfied as set forth in Section 2.2 of the Plan, as summarized herein. 

The DIP Claims shall be deemed to be Allowed Secured and superpriority Administrative Claims in the 

full amount due and owing under the DIP Facility as of the Effective Date. In full satisfaction of and in 

exchange for each DIP Facility Claim, each DIP Facility Claim will be paid in full in Cash on the 

Effective Date, funded from Cash on hand, the proceeds of the Exit Facility, and the proceeds of the 

Rights Offering. 

3. Priority Tax Claims 

Priority Tax Claims will be satisfied as set forth in Section 2.4 of the Plan, as summarized herein. 

Each holder of an Allowed Priority Tax Claim against a Debtor due and payable on or before the 

Effective Date shall receive, in the discretion of the Reorganized Debtors, either (a) on the Effective Date, 

or as soon as practicable thereafter, from the respective Debtor liable for such Allowed Priority Tax 

Claim, payment in Cash in an amount equal to the amount of such Allowed Priority Tax Claim or 

(b) treatment provided in section 1129(a)(9) of the Bankruptcy Code. To the extent any Allowed Priority 

Tax Claim is not due and owing on the Effective Date, such Claim shall be paid in accordance with the 

terms of any agreement between the Debtors and the holder of such Claim, or as may be due and payable 

under applicable non-bankruptcy law, or in the ordinary course of business. 

F. Are any regulatory approvals required to consummate the Plan?

No. There are no known regulatory approvals that are required to consummate the Plan. 

G. What happens to my recovery if the Plan is not confirmed or does not go effective? 

In the event that the Plan is not confirmed or does not go effective, there is no assurance that the 

Debtors will be able to reorganize their businesses. It is possible that any alternative may provide holders 

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of Claims with less than they would have received pursuant to the Plan. For a more detailed description 

of the consequences of an extended chapter 11 case, or of a liquidation scenario, see Article XI.B of this 

Disclosure Statement, entitled “Best Interests of Creditors/Liquidation Analysis,” which begins on 

page 52, and the Liquidation Analysis attached hereto as Exhibit F. 

H. If the Plan provides that I get a distribution, do I get it upon Confirmation or when 

the Plan goes effective, and what is meant by “Confirmation,” “Effective Date,” and 

“Consummation?” 

“Confirmation” of the Plan refers to approval of the Plan by the Bankruptcy Court. Confirmation 

of the Plan does not guarantee that you will receive the distribution indicated under the Plan. After 

Confirmation of the Plan by the Bankruptcy Court, there are conditions that need to be satisfied or waived 

so that the Plan can go effective. Initial distributions to holders of Allowed Claims will only be made on 

the date the Plan becomes effective—the “Effective Date”—or as soon as reasonably practicable 

thereafter, as specified in the Plan. See Article XI of this Disclosure Statement, entitled “Confirmation of 

the Plan,” which begins on page 52, for a discussion of the conditions precedent to consummation of the 

Plan. 

I. What are the sources of Cash and other consideration required to fund the Plan? 

The Plan will be funded by the following sources of consideration: (a) Cash on hand; (b) the 

issuance of the New Common Stock; (c) new capital provided pursuant to the Exit Facility; (d) new 

capital provided pursuant to the Rights Offering; and (e) the remaining proceeds of the DIP Facility.

J. Are there risks to owning the New Common Stock upon emergence from chapter 11? 

Yes. See Article VIII of this Disclosure Statement, entitled “Risk Factors,” which begins on page 

35. 

K. Is there potential litigation related to the Plan?

Parties in interest may object to the approval of this Disclosure Statement and may object to 

Confirmation of the Plan as well, which objections potentially could give rise to litigation. See Article

VIII.C.11 of this Disclosure Statement, entitled “The Reorganized Debtors May Be Adversely Affected 

by Potential Litigation, Including Litigation Arising Out of the Chapter 11 Cases,” which begins on page 

47. 

In the event that it becomes necessary to confirm the Plan over the objection of certain Classes, 

the Debtors may seek confirmation of the Plan notwithstanding the dissent of such objecting Classes. The 

Bankruptcy Court may confirm the Plan pursuant to the “cramdown” provisions of the Bankruptcy Code, 

which allow the Bankruptcy Court to confirm a plan that has been rejected by an impaired Class if it 

determines that the Plan satisfies section 1129(b) of the Bankruptcy Code. See Article VIII.A.4 of this 

Disclosure Statement, entitled “The Debtors May Not Be Able to Secure Confirmation of the Plan,” 

which begins on page 36. 

L. What is the Management Incentive Plan and how will it affect the distribution I 

receive under the Plan?

On or after the Effective Date, except as otherwise set forth in any employment agreement, the 

members of the management team of the Reorganized Debtors will be eligible to participate in the 

Management Incentive Plan, which will be an equity incentive program pursuant to which up to [●]% of 

the New Common Stock will be reserved for issuance (on a fully diluted basis). The New Board shall 

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determine the allocation and other terms and conditions of the Management Incentive Plan participation, 

including the types of equity awards to be granted under such plan. The Management Incentive Plan 

Equity will dilute all of the New Common Stock equally. 

M. Will the final amount of Allowed General Unsecured Claims affect the recovery of 

holders of Allowed General Unsecured Claims under the Plan?

The Debtors estimate that Allowed General Unsecured Claims total approximately $[●].10 Each 

holder of an Allowed General Unsecured Claim shall receive its Pro Rata share of the New Common 

Stock made available in the New Common Stock Equity Pool on account of such Allowed General 

Unsecured Claim. Although the Debtors’ estimate of Allowed General Unsecured Claims is the result of 

the Debtors’ and their advisors’ careful analysis of available information, General Unsecured Claims 

actually asserted against the Debtors may be higher or lower than the Debtors’ estimate provided herein, 

which difference could be material. Moreover, the Debtors in the future may reject certain Executory 

Contracts and Unexpired Leases, which may result in additional rejection damages Claims not accounted 

for in this estimate. Further, the Debtors or the Committee may object to certain proofs of claim, and any 

such objections ultimately could cause the total amount of Allowed General Unsecured Claims to change. 

These changes could affect recoveries to holders of Claims in Classes 5 and 6, and such changes could be 

material.

N. How will Claims asserted with respect to rejection damages affect my recovery under 

the Plan?

The Debtors estimate that Allowed General Unsecured Claims total approximately $[●], which 

includes approximately $[●] in estimated Claims arising from the Debtors’ rejection of Executory 

Contracts and Unexpired Leases. To the extent that the actual amount of rejection damages Claims 

changes, the value of recoveries to holders of Claims in Classes 5 and 6 could change as well, and such 

changes could be material.

O. How will the resolution of certain contingent, unliquidated, and disputed litigation 

Claims affect my recovery under the Plan? 

The Debtors estimate that Allowed General Unsecured Claims total approximately $[●]. This 

amount includes the Debtors’ reasonable estimate of certain contingent, unliquidated, and disputed 

litigation Claims known to the Debtors as of the date hereof, which, with few exceptions, are considered 

General Unsecured Claims. As of the Petition Date, the Debtors were parties to certain litigation matters 

that arose in the ordinary course of operating their businesses and could become parties to additional 

litigation in the future as a result of conduct that occurred prior to the Petition Date. Although the 

Debtors have disputed, are disputing, or will dispute in the future the amounts asserted by such litigation 

counterparties, to the extent these parties are ultimately entitled to a higher amount than is reflected in the 

amounts estimated by the Debtors herein, the value of recoveries to holders of Claims in Classes 5 and 6

could change as well, and such changes could be material. 

P. How will the preservation of the Causes of Action impact my recovery under the 

Plan?

The Plan provides for the retention of all Causes of Action other than those that are expressly 

waived, relinquished, exculpated, released, compromised, or settled. 

 

10 The Debtors will not have an estimate of the amount of Allowed General Unsecured Claims until they file the Statements 

and Schedules—which, in accordance to the Milestones, shall be no later than fifteen days after the Petition Date

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Unless any Causes of Action against an Entity are expressly waived, relinquished, exculpated, 

released, compromised, or settled in the Plan, including pursuant to Article VIII of the Plan, the DIP 

Orders, or by a Final Order, in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized 

Debtors shall retain and may enforce all rights to commence and pursue any and all Causes of Action, 

whether arising before or after the Petition Date, including any actions specifically enumerated in the Plan 

Supplement, and the Reorganized Debtors’ rights to commence, prosecute, or settle such Causes of 

Action shall be preserved notwithstanding the occurrence of the Effective Date. No Entity may rely on 

the absence of a specific reference in the Plan, the Plan Supplement, or the Disclosure Statement to any 

Cause of Action against them as any indication that the Debtors or the Reorganized Debtors will not 

pursue any and all available Causes of Action against them. The Debtors and the Reorganized Debtors 

expressly reserve all rights to prosecute any and all Causes of Action against any Entity, except as 

otherwise expressly provided in the Plan. Unless any Causes of Action against an Entity are expressly 

waived, relinquished, exculpated, released, compromised, or settled in the Plan, including pursuant to 

Article VIII of the Plan, the DIP Orders, or a Bankruptcy Court order, the Reorganized Debtors expressly 

reserve all Causes of Action, for later adjudication, and, therefore no preclusion doctrine, including the 

doctrines of res judicata, collateral estoppel, issue preclusion, claim preclusion, estoppel (judicial, 

equitable, or otherwise), or laches, shall apply to such Causes of Action upon, after, or as a consequence 

of the Confirmation or Consummation. For the avoidance of doubt, in no instance will any Cause of 

Action preserved pursuant to Section 4.17 of the Plan include any claim or Cause of Action with respect 

to, or against, a Released Party.

In accordance with section 1123(b)(3) of the Bankruptcy Code, any Causes of Action preserved 

pursuant to the first paragraph of Section 4.17 of the Plan that a Debtor may hold against any Entity shall 

vest in the Reorganized Debtors. The applicable Reorganized Debtor, through its authorized agents or 

representatives, shall retain and may exclusively enforce any and all such Causes of Action. The 

Reorganized Debtors shall have the exclusive right, authority, and discretion to determine and to initiate, 

file, prosecute, enforce, abandon, settle, compromise, release, withdraw, or litigate to judgment any such 

Causes of Action, or to decline to do any of the foregoing, without the consent or approval of any third 

party or any further notice to or action, order, or approval of the Bankruptcy Court. 

Q. How will the release of Avoidance Actions affect my recovery under the Plan?

On the Effective Date the Debtors, on behalf of themselves and their estates, shall release any and 

all Avoidance Actions and the Debtors and the Reorganized Debtors, and any of their successors or 

assigns, and any Entity acting on behalf of the Debtors or the Reorganized Debtors, shall be deemed to 

have waived the right to pursue any and all Avoidance Actions, except for Avoidance Actions brought as 

counterclaims or defenses to claims asserted against the Debtors; provided, that such exception shall not 

apply to any claims asserted against the Debtors by the Pre-Petition Secured Parties (as defined in the DIP 

Orders). 

R. Will there be releases and exculpation granted to parties in interest as part of the 

Plan?

Yes, the Plan proposes to release the Released Parties and to exculpate the Exculpated Parties. 

The Debtors’ releases, third-party releases, and exculpation provisions included in the Plan are an integral 

part of the Debtors’ overall restructuring efforts and were an essential element of the negotiations 

between the Debtors and the Consenting Parties in obtaining their support for the Plan pursuant to the 

terms of the Restructuring Support Agreement. 

All of the Released Parties and the Exculpated Parties have made substantial and valuable 

contributions to the Debtors’ restructuring through efforts to negotiate and implement the Plan, which will 

maximize and preserve the going-concern value of the Debtors for the benefit of all parties in interest. 

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Accordingly, each of the Released Parties and the Exculpated Parties warrants the benefit of the release 

and exculpation provisions. 

Importantly, (a) all holders of Claims and Interests that are deemed to accept the Plan; (b) all 

holders of Claims who vote to accept the Plan; and (c) all holders of Claims in voting Classes who abstain 

from voting on the Plan and who do not opt out of the release provisions contained in Article VIII of the 

Plan will be deemed to have expressly, unconditionally, generally, individually, and collectively released 

and discharged all Claims and Causes of Action against the Debtors and the Released Parties. The 

releases represent an integral element of the Plan.

Based on the foregoing, the Debtors believe that the releases and exculpations in the Plan are 

necessary and appropriate and meet the requisite legal standard promulgated by the United States Court of 

Appeals for the Fourth Circuit. Moreover, the Debtors will present evidence at the Confirmation Hearing 

to demonstrate the basis for and propriety of the release and exculpation provisions. The release, 

exculpation, and injunction provisions that are contained in the Plan are copied below. 

1. Release of Liens 

Except as otherwise specifically provided in the Plan, the Exit Facility Documents 

(including in connection with any express written amendment of any mortgage, deed of trust, Lien, 

pledge, or other security interest under the Exit Facility Documents), or in any contract, 

instrument, release, or other agreement or document created pursuant to the Plan, on the Effective 

Date and concurrently with the applicable distributions made pursuant to the Plan and, in the case 

of a Secured Claim, satisfaction in full of the portion of the Secured Claim that is Allowed as of the 

Effective Date, all mortgages, deeds of trust, Liens, pledges, or other security interests against any 

property of the Estates shall be fully released and discharged, and all of the right, title, and interest 

of any holder of such mortgages, deeds of trust, Liens, pledges, or other security interests shall 

revert to the Reorganized Debtors and their successors and assigns, in each case, without any 

further approval or order of the Bankruptcy Court and without any action or Filing being required 

to be made by the Debtors, the DIP Agent, the RBL Agent, or any other holder of a Secured Claim. 

In addition, at the sole expense of the Debtors or the Reorganized Debtors, the DIP Agent and the 

RBL Agent shall execute and deliver all documents reasonably requested by the Debtors, 

Reorganized Debtors or administrative agent(s) for the Exit Facility to evidence the release of such 

mortgages, deeds of trust, Liens, pledges, and other security interests and shall authorize the 

Reorganized Debtors and their designees to file UCC-3 termination statements and other release 

documentation (to the extent applicable) with respect thereto.

2. Debtor Release 

Notwithstanding anything contained in the Plan to the contrary, pursuant to section 1123(b) 

of the Bankruptcy Code, for good and valuable consideration, on and after the Effective Date, each 

Released Party is deemed released and discharged by the Debtors, the Reorganized Debtors, and 

their Estates from any and all Claims and Causes of Action, whether known or unknown, including 

any derivative claims, asserted on behalf of the Debtors, that the Debtors, the Reorganized Debtors, 

or their Estates would have been legally entitled to assert in their own right (whether individually 

or collectively) or on behalf of the holder of any Claim or Interest, based on or relating to, or in any 

manner arising from, in whole or in part, the Debtors (including the management, ownership or 

operation thereof), the Debtors’ in- or out-of-court restructuring efforts, any Avoidance Actions 

(but excluding Avoidance Action brought as counterclaims or defenses to Claims asserted against 

the Debtors), the formulation, preparation, dissemination, negotiation, or Filing of the 

Restructuring Support Agreement, or any Restructuring Transaction, contract, instrument, 

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release, or other agreement or document (including providing any legal opinion requested by any 

Entity regarding any transaction, contract, instrument, document, or other agreement 

contemplated by the Plan or the reliance by any Released Party on the Plan or the Confirmation 

Order in lieu of such legal opinion) created or entered into in connection with the Restructuring 

Support Agreement, the Disclosure Statement, the Plan, the Plan Supplement, the Rights Offering, 

the DIP Facility, the Exit Facility, the DIP Credit Agreement, the Backstop Commitment 

Agreement, the Exit Commitment Letters, the Chapter 11 Cases, the filing of the Chapter 11 Cases, 

the pursuit of Confirmation, the pursuit of Consummation, the administration and implementation 

of the Plan, including the issuance or distribution of Securities pursuant to the Plan, or the 

distribution of property under the Plan, or upon any other act or omission, transaction, agreement, 

event, or other occurrence taking place on or before the Effective Date related or relating to the 

foregoing. Notwithstanding anything to the contrary in the foregoing, the releases set forth above 

do not release (a) any post-Effective Date obligations of any party or Entity under the Plan, any 

Restructuring Transaction, or any document, instrument, or agreement (including those set forth in 

the Plan Supplement) executed to implement the Plan or (b) any individual from any claim related 

to an act or omission that is determined in a Final Order by a court competent jurisdiction to have 

constituted actual fraud or willful misconduct.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, 

pursuant to Bankruptcy Rule 9019, of the Debtor Release, which includes by reference each of the 

related provisions and definitions contained in the Plan, and further, shall constitute the 

Bankruptcy Court’s finding that the Debtor Release is: (1) in exchange for the good and valuable 

consideration provided by the Released Parties; (2) a good faith settlement and compromise of the 

Claims released by the Debtor Release; (3) in the best interests of the Debtors and all holders of 

Claims and Interests; (4) fair, equitable, and reasonable; (5) given and made after due notice and 

opportunity for hearing; and (6) a bar to any of the Debtors, the Reorganized Debtors, or the 

Debtors’ Estates asserting any Claim or Cause of Action released pursuant to the Debtor Release.

3. Third-Party Release 

Notwithstanding anything contained in the Plan to the contrary, as of the Effective Date, 

each Releasing Party is deemed to have released and discharged each Debtor, Reorganized Debtor, 

and Released Party from any and all Claims and Causes of Action, whether known or unknown, 

including any derivative claims, asserted on behalf of the Debtors, that such Entity would have been 

legally entitled to assert (whether individually or collectively), based on or relating to, or in any 

manner arising from, in whole or in part, the Debtors (including the management, ownership or 

operation thereof), the Debtors’ in- or out-of-court restructuring efforts, any Avoidance Actions, 

the formulation, preparation, dissemination, negotiation, or Filing of the Restructuring Support 

Agreement, or any Restructuring Transaction, contract, instrument, release, or other agreement or 

document (including providing any legal opinion requested by any Entity regarding any 

transaction, contract, instrument, document, or other agreement contemplated by the Plan or the 

reliance by any Released Party on the Plan or the Confirmation Order in lieu of such legal opinion) 

created or entered into in connection with the Restructuring Support Agreement, the Disclosure 

Statement, the Plan, the Plan Supplement, the Rights Offering, the DIP Facility, the Exit Facility, 

the DIP Commitment Letters, the Backstop Commitment Agreement, the Exit Commitment 

Letters, the Chapter 11 Cases, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the 

pursuit of Consummation, the administration and implementation of the Plan, including the 

issuance or distribution of Securities pursuant to the Plan, or the distribution of property under the 

Plan, or upon any other act or omission, transaction, agreement, event, or other occurrence taking 

place on or before the Effective Date related or relating to the foregoing. Notwithstanding anything 

to the contrary in the foregoing, the releases set forth above do not release (a) any post-Effective 

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Date obligations of any party or Entity under the Plan, any Restructuring Transaction, or any 

document, instrument, or agreement (including those set forth in the Plan Supplement) executed to 

implement the Plan or (b) any individual from any claim related to an act or omission that is 

determined in a Final Order by a court competent jurisdiction to have constituted actual fraud or 

willful misconduct.

Entry of the Confirmation Order shall constitute the Bankruptcy Court’s approval, 

pursuant to Bankruptcy Rule 9019, of the Third-Party Release, which includes by reference each of 

the related provisions and definitions contained herein, and, further, shall constitute the 

Bankruptcy Court’s finding that the Third Party Release is: (1) consensual; (2) essential to the 

confirmation of the Plan; (3) given in exchange for the good and valuable consideration provided by 

the Released Parties; (4) a good faith settlement and compromise of the Claims released by the 

Third-Party Release; (5) in the best interests of the Debtors and their Estates; (6) fair, equitable, 

and reasonable; (7) given and made after due notice and opportunity for hearing; and (8) a bar to 

any of the Releasing Parties asserting any claim or Cause of Action released pursuant to the ThirdParty Release.

4. Exculpation

Notwithstanding anything contained herein to the contrary, no Exculpated Party shall have 

or incur liability for, and each Exculpated Party is hereby released and exculpated from, any Cause 

of Action for any claim related to any act or omission in connection with, relating to, or arising out 

of, the Chapter 11 Cases, the formulation, preparation, dissemination, negotiation, or Filing of the 

Restructuring Support Agreement and related prepetition transactions, the Disclosure Statement, 

the Plan, the Plan Supplement, or any Restructuring Transaction, contract, instrument, release or 

other agreement or document (including providing any legal opinion requested by any Entity 

regarding any transaction, contract, instrument, document, or other agreement contemplated by 

the Plan or the reliance by any Exculpated Party on the Plan or the Confirmation Order in lieu of 

such legal opinion) created or entered into in connection with the Disclosure Statement, the Plan, 

the Plan Supplement, the Restructuring Support Agreement, the Rights Offering, the DIP Facility, 

the Exit Facility, the DIP Credit Agreement, the Backstop Commitment Agreement, the Exit 

Commitment Letters, the Filing of the Chapter 11 Cases, the pursuit of Confirmation, the pursuit 

of Consummation, the administration and implementation of the Plan, including the issuance of 

Securities pursuant to the Plan, or the distribution of property under the Plan, except for claims 

related to any act or omission that is determined in a Final Order by a court of competent 

jurisdiction to have constituted actual fraud or willful misconduct, but in all respects such Entities 

shall be entitled to reasonably rely upon the advice of counsel with respect to their duties and 

responsibilities pursuant to the Plan. The Exculpated Parties have, and upon completion of the 

Plan shall be deemed to have, participated in good faith and in compliance with the applicable laws 

with regard to the solicitation of, and distribution of, consideration pursuant to the Plan and, 

therefore, are not, and on account of such distributions shall not be, liable at any time for the 

violation of any applicable law, rule, or regulation governing the solicitation of acceptances or 

rejections of the Plan or such distributions made pursuant to the Plan.

5. Injunction 

Except as otherwise provided herein or for obligations issued pursuant hereto, all Entities 

that have held, hold, or may hold Claims or Interests that have been released pursuant to Section 

8.2 or Section 8.3 of the Plan, discharged pursuant to Section 8.1 of the Plan, or are subject to 

exculpation pursuant to Section 8.4 of the Plan shall be permanently enjoined, from and after the 

Effective Date, from taking any of the following actions against, as applicable, the Debtors, the 

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Reorganized Debtors, the Released Parties, or the Exculpated Parties: (a) commencing or 

continuing in any manner any action or other proceeding of any kind on account of or in 

connection with or with respect to any such Claims or Interests; (b) enforcing, attaching, collecting, 

or recovering by any manner or means any judgment, award, decree, or order against such Entities 

on account of or in connection with or with respect to any such Claims or Interests; (c) creating, 

perfecting, or enforcing any encumbrance of any kind against such Entities or the property or 

Estates of such Entities on account of or in connection with or with respect to any such Claims or 

Interests; (d) asserting any right of setoff, subrogation, or recoupment of any kind against any 

obligation due from such Entities or against the property of such Entities on account of or in 

connection with or with respect to any such Claims or Interests unless such Entity has timely 

asserted such setoff right in a document Filed with the Bankruptcy Court explicitly preserving such 

setoff, and notwithstanding an indication of a Claim or Interest or otherwise that such Entity 

asserts, has, or intends to preserve any right of setoff pursuant to applicable law or otherwise; and 

(e) commencing or continuing in any manner any action or other proceeding of any kind on 

account of or in connection with or with respect to any such Claims or Interests discharged, 

released, exculpated, or settled pursuant to the Plan.

For more detail, see Article VIII of the Plan, entitled “Settlement, Release, Injunction, and 

Related Provisions,” which is incorporated herein by reference. 

S. What impact does the Claims Bar Date have on my Claim? 

The Bankruptcy Court has established [●], 2016, at 5:00 p.m. (prevailing Eastern Time), as the 

Claims bar date (the “Bar Date”) in the Chapter 11 Cases. The following entities holding Claims against 

the Debtors that arose (or that are deemed to have arisen) prior to the Petition Date, including without 

limitation Class 6 General Unsecured Claims, must file proofs of claim on or before the Bar Date: (1) any 

entity whose Claim against a Debtor is not listed in the applicable Debtor’s schedules of assets and 

liabilities (“Schedules”) or is listed in the applicable Debtor’s Schedules as contingent, unliquidated, or 

disputed if such entity desires to participate in any of the Chapter 11 Cases or share in any distribution in 

any of the Chapter 11 Cases; (2) any entity that believes its Claim is improperly classified in the 

Schedules or is listed in an incorrect amount and desires to have its Claim allowed in a different 

classification or amount from that identified in the Schedules; (3) any entity that believes its Claim as 

listed in the Schedules is not an obligation of the specific Debtor against which the Claim is listed and

that desires to have its Claim allowed against a Debtor other than that identified in the Schedules; and 

(4) any entity that believes its Claim against a Debtor is or may be an administrative expense pursuant to 

section 503(b)(9) of the Bankruptcy Code (but not any entity that believes it holds an administrative 

expense Claim under section 503(b)(1) of the Bankruptcy Code). 

In accordance with Bankruptcy Rule 3003(c)(2), if any person or entity that is required, but fails, 

to file a proof of claim on or before the Bar Date: (1) such person or entity will be forever barred, 

estopped, and enjoined from asserting such Claim against the Debtors (or filing a proof of claim with 

respect thereto); (2) the Debtors and their property may be forever discharged from any and all 

indebtedness or liability with respect to or arising from such Claim; (3) such person or entity will not 

receive any distribution in the Chapter 11 Cases on account of such Claim; and (4) such person or entity 

will not be permitted to vote on any plan or plans of reorganization for the Debtors on account of such 

barred Claim or receive further notices regarding such Claim.

As described in this Disclosure Statement, the distribution you receive on account of your Claim 

(if any) may depend, in part, on the amount of Claims for which proofs of claim are filed on or before the 

Bar Date.

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T. What is the deadline to vote on the Plan?

The Voting Deadline is July 26, 2016, at 5:00 p.m. (prevailing Eastern Time). 

U. How do I vote for or against the Plan? 

Detailed instructions regarding how to vote on the Plan are contained on the ballots distributed to 

holders of Claims that are entitled to vote on the Plan. For your vote to be counted, your ballot must be 

properly completed, executed, and delivered as directed, so that your ballot or a master ballot including 

your vote is actually received by the Solicitation Agent on or before the Voting Deadline, i.e. July 26,

2016 at 5:00 p.m. prevailing Eastern Time. See Article IX of this Disclosure Statement, entitled 

“Solicitation and Voting Procedures,” which begins on page 47 for more information. 

V. Why is the Bankruptcy Court holding a Confirmation Hearing? 

Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court to hold a hearing on 

confirmation of the Plan and recognizes that any party in interest may object to Confirmation of the Plan. 

W. When is the Confirmation Hearing set to occur?

The Bankruptcy Court has scheduled the Confirmation Hearing for [August 4], 2016, at [10:00 

a.m.] (prevailing Eastern Time). The Confirmation Hearing may be adjourned from time to time without 

further notice. 

Objections to Confirmation must be filed and served on the Debtors, and certain other parties, by 

no later than July 25, 2016, at 5:00 p.m. (prevailing Eastern Time) in accordance with the notice of the 

Confirmation Hearing that accompanies this Disclosure Statement and the Disclosure Statement Order 

attached hereto as Exhibit D and incorporated herein by reference. 

X. What is the purpose of the Confirmation Hearing? 

The confirmation of a plan of reorganization by a bankruptcy court binds the debtor, any issuer of 

securities under a plan of reorganization, any person acquiring property under a plan of reorganization, 

any creditor or equity interest holder of a debtor, and any other person or entity as may be ordered by the 

bankruptcy court in accordance with the applicable provisions of the Bankruptcy Code. Subject to certain 

limited exceptions, the order issued by the bankruptcy court confirming a plan of reorganization 

discharges a debtor from any debt that arose before the confirmation of such plan of reorganization and 

provides for the treatment of such debt in accordance with the terms of the confirmed plan of 

reorganization.

Y. What is the effect of the Plan on the Debtors’ ongoing business? 

The Debtors are reorganizing under chapter 11 of the Bankruptcy Code. As a result, the 

occurrence of the Effective Date means that the Debtors will not be liquidated or forced to go out of 

business. Following Confirmation, the Plan will be consummated on the Effective Date, which is a date 

that is the first business day after which all conditions to Consummation have been satisfied or waived. 

See Article IX of the Plan. On or after the Effective Date, and unless otherwise provided in the Plan, the 

Reorganized Debtors may operate their businesses and, except as otherwise provided by the Plan, may 

use, acquire, or dispose of property and compromise or settle any Claims, Interests, or Causes of Action 

without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy 

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Code or Bankruptcy Rules. Additionally, upon the Effective Date, all actions contemplated by the Plan 

will be deemed authorized and approved. 

Z. Will any party have significant influence over the corporate governance and 

operations of the Reorganized Debtors? 

As of the Effective Date, the term of the current members of the boards of directors of the 

Debtors shall expire, and the initial boards of directors, including the New Board, as well as the officers 

of each of the Reorganized Debtors, shall be appointed in accordance with the New Organizational 

Documents and other constituent documents of each Reorganized Debtor. The initial New Board shall 

consist of those individuals that are selected in accordance with Section 4.14 of the Plan. Successors will 

be elected in accordance with the New Organizational Documents, which forms shall be included in the 

Plan Supplement. 

AA. Who do I contact if I have additional questions with respect to this Disclosure 

Statement or the Plan?

If you have any questions regarding this Disclosure Statement or the Plan, please contact the 

Debtors’ Notice and Claims Agent, Epiq Bankruptcy Solutions, LLC: 

By regular mail, hand delivery, or overnight mail at: 

Penn Virginia Corporation

c/o Epiq Corporate Restructuring 

777 Third Avenue, 12th Floor, 

New York, NY 10017 

By electronic mail at:

tabulation@epiqsystems.com (reference “Penn Virginia” in the subject line)

By telephone at: 

+1 (646) 282-2500 (ask for the Solicitation Group)

Copies of the Plan, this Disclosure Statement, and any other publicly filed documents in the 

Chapter 11 Cases are available upon written request to the Debtors’ Notice and Claims Agent at the 

address above or by downloading the exhibits and documents from the website of the Debtors’ Notice and 

Claims Agent at http://dm.epiq11.com/PVA (free of charge) or the Bankruptcy Court’s website at 

www.vaeb.uscourts.gov (for a fee). 

BB. Do the Debtors recommend voting in favor of the Plan?

Yes. The Debtors believe the Plan provides for a larger distribution to the Debtors’ creditors than 

would otherwise result from any other available alternative. The Debtors believe the Plan, which 

contemplates a significant deleveraging of the Debtors’ balance sheet and enables them to emerge from 

chapter 11 expeditiously, is in the best interest of all holders of Claims, and that any other alternatives (to 

the extent they exist) fail to realize or recognize the value inherent under the Plan. 

CC. Who Supports the Plan?

The Plan is supported by the Debtors, the Consenting RBL Lenders, and the Consenting 

Noteholders, as set forth in the following chart: 

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Consenting Parties

Support (expressed as 

an approximate 

percentage of the total 

principal amount of 

claims outstanding)

Debtors N/A

Holders of RBL Claims 100%

Holders of Note Claims 86%

IV. THE DEBTORS’ RESTRUCTURING SUPPORT AGREEMENT AND PLAN 

A. Restructuring Support Agreement

On May 10, 2016, the Debtors, a group of RBL Lenders holding 100 percent of the RBL Claims, 

and a group of Noteholders holding approximately 86 percent of the Note Claims, entered into the 

Restructuring Support Agreement. Since executing the Restructuring Support Agreement, the Debtors 

have documented the terms of the prearranged restructuring contemplated thereby, including the Plan.11 

As of the Petition Date, the Consenting RBL Lenders and Consenting Noteholders collectively hold an

aggregate of approximately 87 percent of the Debtors’ prepetition funded debt in principal amount. The 

restructuring transactions contemplated by the Plan will significantly reduce the Debtors’ funded-debt 

obligations and annual interest payments and result in a stronger balance sheet for the Debtors. 

The Plan represents a significant step in the Debtors’ months-long restructuring process. The 

Restructuring Support Agreement together with the Exit Facility and Rights Offering contemplated 

thereby, will allow—indeed, require—the Debtors to proceed expeditiously through chapter 11 to a 

successful emergence. The Plan will significantly deleverage the Debtors’ balance sheet and provide the 

capital injection needed for the Debtors to return to competitive operations going forward. 

B. The Plan 

As discussed in Article III herein, the Plan contemplates payment in full the RBL Claims and

conversion of the Notes and General Unsecured Claims into New Common Stock, effectuated through a 

chapter 11 plan under the following key terms: 

1. New Common Stock

All existing Interests in Penn Virginia shall be cancelled as of the Effective Date and Reorganized 

Penn Virginia shall issue the New Common Stock to holders of Claims entitled to receive New Common 

Stock pursuant to the Plan. The issuance of New Common Stock, including any options for the purchase 

thereof and equity awards associated therewith, shall be authorized without the need for any further 

corporate action and without any further action by the Debtors, Reorganized Debtors, or Reorganized 

Penn Virginia, as applicable. Reorganized Penn Virginia’s New Organizational Documents shall 

authorize the issuance and distribution on the Effective Date of New Common Stock to the Distribution 

Agent for the benefit of holders of Allowed Claims in Classes 5 and 6. 

 

11 The key terms of the Plan are discussed in greater detail in Article IV.B of this Disclosure Statement, entitled “The Plan,” 

immediately following this section.

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All New Common Stock issued under the Plan shall be duly authorized, validly issued, fully paid, 

and non-assessable, and the holders of New Common Stock shall be deemed to have accepted the terms 

of the New Shareholders’ Agreement (solely in their capacity as shareholders of Reorganized Penn 

Virginia) and to be parties thereto without further action or signature. The New Shareholders’ Agreement 

shall be effective as of the Effective Date and, as of such date, shall be deemed to be valid, binding, and 

enforceable in accordance with its terms, and each holder of New Common Stock shall be bound thereby. 

2. Rights Offering

On the Effective Date, the Debtors shall consummate the $50 million Rights Offering pursuant to 

the Backstop Commitment Agreement and in accordance with the Rights Offering Procedures (including 

the Subscription Agreement). The Rights Offering is backstopped by the Backstop Parties—which means 

certain Noteholders that are also parties to the Restructuring Support Agreement and that have agreed to 

backstop the Rights Offering, solely in their capacities as such. Subscription Rights under the Rights 

Offering are available to all Noteholders on a Pro Rata basis pursuant to Section 3.2(e) of the Plan.

Pursuant to the Rights Offering Procedures and Subscription Agreement, each holder of an 

Allowed Note Claim is entitled to subscribe for up to [●] Rights Offering Shares per $1,000 of principal 

amount of the Notes that are part of such holder’s Allowed Note Claim, at a purchase price of $[●] per 

share. Under the terms of the Backstop Commitment Agreement, in addition to agreeing to fully exercise 

all Subscription Rights issued to them pursuant to the Plan, the Backstop Parties have agreed to purchase 

all unsubscribed shares under the Rights Offering, at a per share purchase price that reflects a discount of 

25 percent to the total settled plan equity value of $125 million. Additionally, under the terms of the 

Backstop Commitment Agreement, the Backstop Parties shall receive a premium in an amount equal to 

$3,000,000 (which represents 6% of the $50 million aggregate Rights Offering amount) (the 

“Commitment Premium”).

3. Exit Facility

On the Effective Date, the Reorganized Debtors shall enter into the Exit Facility, the terms of 

which will be set forth in the Exit Facility Documents. The Exit Facility shall be a senior secured 

revolving credit facility with an initial availability of up to $128 million to be provided by the Exit 

Facility Lenders. The proceeds of the Exit Facility shall be used by the Debtors for: (a) financing certain 

fees, costs and expenses in connection with their exit from chapter 11 and refinancing certain debt in 

connection therewith; (b) financing capital expenditures and acquisitions; and (c) working capital and 

general corporate purposes of the Debtors. The Exit Facility shall be secured by a first priority lien on 

substantially all of the Debtors’ assets. 

Confirmation of the Plan shall be deemed approval of the Exit Facility and the Exit Facility 

Documents, and all transactions contemplated thereby, including, without limitation, any supplemental or 

additional syndication of the Exit Facility, and all actions to be taken, undertakings to be made, and 

obligations to be incurred by the Reorganized Debtors in connection therewith, including the payment of 

all fees, indemnities, and expenses provided for therein, and authorization of the Reorganized Debtors to 

enter into and execute the Exit Facility Documents and such other documents as may be required to 

effectuate the treatment afforded by the Exit Facility. On the Effective Date, all of the Liens and security 

interests to be granted in accordance with the Exit Facility Documents (a) shall be deemed to be granted, 

(b) shall be legal, binding, and enforceable Liens on, and security interests in, the collateral granted 

thereunder in accordance with the terms of the Exit Facility Documents, (c) shall be deemed perfected on 

the Effective Date, subject only to such Liens and security interests as may be permitted under the Exit 

Facility Documents, and (d) shall not be subject to recharacterization or equitable subordination for any 

purposes whatsoever and shall not constitute preferential transfers or fraudulent conveyances under the 

Bankruptcy Code or any applicable non-bankruptcy law. The Reorganized Debtors and the persons and 

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entities granted such Liens and security interests shall be authorized to make all filings and recordings, 

and to obtain all governmental approvals and consents necessary to establish and perfect such Liens and 

security interests under the provisions of the applicable state, provincial, federal, or other law (whether 

domestic or foreign) that would be applicable in the absence of the Plan and the Confirmation Order (it 

being understood that perfection shall occur automatically by virtue of the entry of the Confirmation 

Order and any such filings, recordings, approvals, and consents shall not be required), and will thereafter 

cooperate to make all other filings and recordings that otherwise would be necessary under applicable law 

to give notice of such Liens and security interests to third parties. 

4. Use of Proceeds

The Exit Facility and Rights Offering proceeds will be used to fund certain distributions under the 

Plan, the Debtors’ operations, and for general corporate purposes. 

5. Governance 

The initial New Board shall consist of those individuals selected in accordance with Section 4.14

of the Plan. Successors will be elected in accordance with the New Organizational Documents, which 

mean the forms of the certificates or articles of incorporation, bylaws, or such other applicable formation 

documents of Reorganized Penn Virginia, which forms shall be included in the Plan Supplement. 

6. Recoveries to Claim Holders

The DIP Lenders and the RBL Lenders shall both receive payment in full in Cash on the 

Effective Date from Cash on hand, proceeds of the Rights Offering, and proceeds from the Exit Facility. 

Each holder of an Allowed Note Claim shall receive (i) its Pro Rata share of the New Common Stock 

Equity Pool and (ii) if it is an Accredited Investor (as defined in the Securities Act of 1933, as amended), 

its Subscription Rights to purchase its Pro Rata Share of the Rights Offerings Shares in accordance with 

the Rights Offering Procedures on account of such Allowed Note Claim. 

Additionally, each holder of an Allowed General Unsecured Claim shall receive its Pro Rata 

share of the New Common Stock made available in the New Common Stock Equity Pool on account of 

such Allowed General Unsecured Claim.

7. General Settlement of Claims and Interests

Pursuant to sections 363 and 1123 of the Bankruptcy Code and Bankruptcy Rule 9019 and in 

consideration for the distributions and other benefits provided pursuant to the Plan, which distributions 

and other benefits shall be irrevocable and not subject to challenge upon the Effective Date, the 

provisions of the Plan shall constitute a good-faith compromise and settlement of all Claims, Interests, 

and controversies relating to the contractual and legal rights that a holder of a Claim or Interest may have 

with respect to any Allowed Claim or Allowed Interest, or any distribution to be made on account of such 

Allowed Claim or Allowed Interest.

The Plan shall be deemed a motion to approve the good-faith compromise and settlement of all 

such Claims, Interests, and controversies pursuant to Bankruptcy Rule 9019, and the entry of the 

Confirmation Order shall constitute the Bankruptcy Court’s approval of the compromise or settlement of 

all such Claims, Interests, and controversies, as well as a finding by the Bankruptcy Court that such 

compromise or settlement is in the best interests of the Debtors, their Estates, and holders of Claims and 

Interests and is fair, equitable, and reasonable. In accordance with the provisions of the Plan, pursuant to 

Bankruptcy Rule 9019, without any further notice to or action, order, or approval of the Bankruptcy 

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Court, after the Effective Date, the Reorganized Debtors may compromise and settle Claims against, and 

Interests in, the Debtors and their Estates and Causes of Action against other Entities. 

Pursuant to Rule 408 of the Federal Rules of Evidence, the Plan, this Disclosure Statement, the 

Restructuring Support Agreement (and any exhibits or supplements relating to the foregoing) and all 

negotiations relating thereto shall not be admissible into evidence in any proceeding unless and until the

Plan is consummated, and then only in accordance with the Plan. In the event the Plan is not

consummated, provisions of the Plan, this Disclosure Statement, the Restructuring Support Agreement 

(and any exhibits or supplements relating to the foregoing) and all negotiations relating thereto shall not 

be binding or probative. 

8. Releases

The Plan contains certain releases (as described more fully in Article III.R of this Disclosure 

Statement, entitled “Will there be releases and exculpation granted to parties in interest as part of the 

Plan?,” which begins on page 14), including mutual releases among (a) the Debtors; (b) the Reorganized 

Debtors; (c) the RBL Lenders; (d) the Noteholders; (e) the DIP Lenders; (f) the DIP Hedge Lenders; (g) 

the Backstop Parties; (h) the Exit Facility Lenders; (i) the Indenture Trustee; (j) the RBL Agent; (k) the 

DIP Agent; (l) the Exit Facility Agent; (m) the Consenting Noteholders; and (n) the Consenting RBL 

Lenders, each solely in their capacity as such. The Plan also provides that (x) all holders of Claims and 

Interests that are deemed to accept the Plan; (y) all holders of Claims who vote to accept the Plan; and (z) 

all holders of Claims in voting Classes who abstain from voting on the Plan and who do not opt out of the 

release provisions contained in Article VIII of the Plan, will be deemed to have expressly, 

unconditionally, generally, individually, and collectively released and discharged all Claims and Causes 

of Action against the Debtors and the Released Parties.

V. THE DEBTORS’ CORPORATE HISTORY, STRUCTURE, AND BUSINESS 

OVERVIEW

A. The Debtors’ Corporate History

The Debtors’ corporate history dates back to Penn Virginia’s incorporation in 1882 as Virginia 

Coal & Iron Co. Until 2001, the Debtors were engaged principally in the management and leasing of coal 

properties and the subsequent collection of royalties. The Debtors also produced small quantities of 

natural gas from wells located on their leased coal properties. Beginning in 2001, the Debtors formed a 

master limited partnership (the “MLP”), in which they maintained a controlling interest, for their 

coal-related business and, over the next several years, the MLP expanded its business to other resource 

and land management activities, including timber sales, the leasing of fee-based, coal-related 

infrastructure, and midstream services, including natural gas processing, gathering, and other related 

services. 

During the same time period and through 2013, the Debtors grew their oil and natural gas 

exploration and production business significantly, acquiring and/or developing assets in Texas, the midcontinent, Appalachia, Louisiana, and Mississippi. In 2010, the Debtors divested their ownership interest

in the MLP—thereby becoming a “pure play” E&P company. From 2010 through 2014, during which 

time the price of natural gas declined while the price of oil increased, the Debtors successfully 

transitioned from a heavy concentration on natural gas to an oil and NGL-dominant producer. The 

Debtors’ current operations focus most heavily on the exploration and production of crude oil in the Eagle 

Ford, where the vast majority of their assets are located. The Debtors also own more modest oil and 

natural gas-producing properties in Oklahoma and Pennsylvania. 

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As of the Petition Date, the Debtors had approximately 96 full-time employees. None of their 

employees is represented by a collective bargaining unit. A corporate organization chart is attached as 

Exhibit C. Below is a summary of the Debtors’ key assets and operations. 

B. The Debtors’ Key Assets and Operations

The Debtors’ operations consist primarily of the exploration, production, and development of 

crude oil, NGLs, and natural gas, principally in the Eagle Ford. Generally, the Debtors own a working 

interest in leaseholds of properties from which these hydrocarbons are produced and, in most cases, the 

Debtors act as the operator of the properties. In instances where the Debtors own less than 100 percent of 

the leasehold working interest in a property, the Debtors and the other working interest owners generally

enter into joint operating agreements to govern the parties’ rights and responsibilities with respect to the 

development and operation of the acreage, including which party will be the operator. 

As of the Petition Date, the Debtors’ proved reserves were approximately 44 MMBOE, of which 

(a) 75 percent were proved developed reserves and (b) 84 percent were oil and NGLs. As of the Petition 

Date, the Debtors held interests in approximately 255 net productive wells, approximately 86 percent of 

which the Debtors also operate, and owned approximately 120,000 net acres of leasehold and royalty 

interests, approximately 54 percent of which were undeveloped. For the December 31, 2015 fiscal year, 

the Debtors’ total production was comprised of 80 percent crude oil and NGLs and 20 percent natural 

gas—crude oil and NGLs accounted for 90 percent of product revenues.

The Debtors’ assets are concentrated in the core NGL-rich area or “volatile oil window” of the 

Eagle Ford. In 2015, the Debtors spent over $300 million in capital expenditures—substantially all of 

which was on their Eagle Ford operations. The Debtors’ Eagle Ford operations accounted for 

approximately 88 percent of the Debtors’ total production and approximately 82 percent, of the Debtors’ 

net productive wells. The Debtors’ crude oil sales are generally sold at a “CDP” or Central Delivery 

Point using short-term floating price contracts. Generally speaking, the Debtors’ operations are highly 

sensitive to oil, NGL, and natural gas prices—although, as described below, such sensitivity is mitigated 

to a certain extent through the use of hedging arrangements. 

As of the date of this Disclosure Statement, the Debtors’ officers include: (a) Ed Cloues, Interim 

Chief Executive Officer; (b) Steve Hartman, Senior Vice President and Chief Financial Officer; (c) John 

Brooks, Executive Vice President and Chief Operations Officer; (d) Nancy Snyder, Executive Vice 

President and Chief Administrative Officer; and (e) Seth Bullock, Chief Restructuring Officer.

C. The Debtors’ Key Contractual Relationships and Hedging Arrangements.

The Debtors’ most significant contractual arrangements fall into a three broad categories. First, 

the Debtors are party to a number of oil gathering and transportation services and natural gas services 

contracts—commonly referred to as “midstream services” contracts, the risks associated with which are 

described in Article VIII.C.9 of this Disclosure Statement, entitled “The Debtors’ Operations Depend, in 

Part, on the Pricing and Availability of Midstream Services and Access to Water,” with begins on 

page 46. 

Second, the Debtors also have historically entered into well drilling-and-completion contracts in 

the regular course of business. But, in light of the suspension of their drilling program, the Debtors are 

not currently party to any active well-drilling and completion contracts.

Finally, the Debtors routinely enter into hedging arrangements (each, a “Swap Contract,” and, 

collectively, the “Swap Contracts”) with counterparties to insure against declines in oil and natural gas 

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prices. Under the Swap Contracts, depending on market conditions, either: (a) the applicable 

counterparty pays to the Debtors, on a monthly basis, the positive difference, if any, between the fixed 

price under the applicable Swap Contract and the market price of oil during the relevant month; or (b) the 

Debtors pay the absolute value of the price differential to the Swap Contract counterparty if the value is 

negative. The counterparties under the Swap Contracts have historically been either lenders under the 

RBL Facility or affiliates of such lenders. Prior to Petition Date, the Debtors were party to six Swap 

Contracts. As described in more detail below, at the request of the counterparties, the Debtors liquidated 

each of their six prepetition Swap Contracts in the months immediately preceding the Petition Date in an 

ultimately successful effort to facilitate restructuring discussions and manage liquidity. As of the Petition 

Date, the Debtors were not party to any active Swap Contracts, but recognize the importance and value of 

such contracts. 

D. The Debtor’s Prepetition Capital Structure

As of the date hereof, the Debtors’ funded debt is comprised of (a) approximately $113 million 

outstanding under the RBL Facility and (b) approximately $1,075 million in principal and approximately 

$47 million in unpaid interest outstanding under the Notes. The Debtors further have approximately 

3,864 shares and 17,152 shares, respectively, outstanding in Series A Preferred Stock and Series B 

Preferred Stock, with an aggregate liquidation preference of approximately $211 million. Additional 

details regarding the Debtors’ prepetition funded-debt and preferred equity obligations are provided 

below. 

Funded Debt Maturity Balance

RBL Facility September 2017 $113 million

2019 Notes April 15, 2019 $300 million

2020 Notes May 1, 2020 $775 million

Total: $1,188 million

Preferred Equity Shares Liquidation Preference

Series A Preferred Stock 3,864 $39 million

Series B Preferred Stock 17,152 $172 million

Total: $211 million

1. RBL Facility

Debtor Penn Virginia Holding Corp. (“PVH”) is the borrower under that certain Credit 

Agreement, dated as of September 28, 2012 by and among PVH, as borrower, Penn Virginia, as parent, 

the lenders party thereto, and Wells Fargo Bank, National Association (i.e., the RBL Agent), as 

administrative agent. The RBL Credit Agreement provides for a reserve-based revolving credit facility, 

which is scheduled to mature in September 2017. The RBL Facility is guaranteed by Penn Virginia and 

certain of its Debtor subsidiaries (the “RBL Guarantor Subsidiaries”). The Debtor’s obligations under the 

RBL Facility are secured by a first priority lien on substantially all of the Debtors’ proved oil and gas 

reserves and a pledge of the equity interests in the RBL Guarantor Subsidiaries. 

In the months leading up to the Petition Date, the Debtors and RBL Agent agreed to the terms of 

(a) that certain Tenth Amendment to the RBL Facility (the “Tenth RBL Amendment”), dated as of 

January 8, 2016, (b) that certain Eleventh Amendment to the RBL Facility (the “Eleventh RBL 

Amendment,” and together with the Tenth RBL Amendment, the “RBL Amendments”), dated as of 

March 15, 2016, and (c) that certain Amendment to the Eleventh RBL Amendment (the “Amended 

Eleventh RBL Amendment”), dated as of May 6, 2016, the material terms of each of which are set forth 

below. 

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Importantly, availability under the RBL Facility is the lesser of the borrowing base and the 

“commitment amount.” As of the last borrowing base redetermination in November 2015, the borrowing 

base for the RBL Facility was $275 million. But, under the terms of the Eleventh RBL Amendment, the 

commitment amount was reduced to amounts outstanding—approximately $113 million as of the Petition 

Date. Thus, there is no incremental availability under the RBL Facility.

2. 2019 Senior Unsecured Notes

Debtor Penn Virginia is the issuer of certain senior unsecured notes (the “2019 Notes”) under that 

certain Third Supplemental Indenture, dated April 13, 2011, by and among Penn Virginia, as issuer, 

certain of Penn Virginia’s Debtor subsidiaries as guarantors party thereto (the “2019 Notes Guarantors”), 

and Wilmington Savings Fund Society (“WSFS”) as successor indenture trustee. The 2019 Notes bear an 

annual coupon of 7.25% which is payable on April 15 and October 15 of each year. The 2019 Notes are 

senior to the Debtors’ existing and future subordinated indebtedness and are subordinated to the Debtors’ 

secured indebtedness, including the RBL Facility, to the extent of the collateral securing that 

indebtedness. The obligations under the 2019 Notes are fully and unconditionally guaranteed by the 2019 

Notes Guarantors. The 2019 Notes mature on April 15, 2019. As of the Petition Date, approximately 

$300 million in principal and approximately $12 million in unpaid interest remains outstanding under the 

2019 Notes. 

3. 2020 Senior Unsecured Notes 

Debtor Penn Virginia is the issuer of certain senior unsecured notes (the “2020 Notes”) under that 

certain Fourth Supplemental Indenture, dated April 24, 2013, by and among Penn Virginia, as issuer,

certain of Penn Virginia’s Debtor subsidiaries as guarantors party thereto (the “2020 Notes Guarantors”), 

and WSFS as successor indenture trustee. The 2020 Notes bear an annual coupon of 8.50%, which is 

payable on May 1 and November 1 of each year. The 2020 Notes are senior to the Debtors’ existing and 

future subordinated indebtedness and are subordinated to the Debtors’ secured indebtedness, including the 

RBL Facility, to the extent of the collateral securing that indebtedness. The obligations under the 2020 

Notes are fully and unconditionally guaranteed by the 2020 Notes Guarantors. The 2020 Notes mature on 

May 1, 2020. As of the Petition Date, approximately $775 million in principal and approximately 

$35 million in unpaid interest remains outstanding under the 2020 Notes. 

4. Preferred and Common Stock

Penn Virginia has two series of preferred stock issued and outstanding, including: (a) 3,864

shares of Series A Preferred Stock; and (b) 17,152 shares of Series B Preferred Stock. The Preferred 

Stock’s terms require quarterly cash dividend payments at a rate of 6.0 percent per annum to be paid on 

January 15, April 15, July 15, and October 15 of each year. As part of its ongoing efforts to preserve 

liquidity while exploring strategic alternatives, Penn Virginia announced a suspension of quarterly 

dividends on the Series A Preferred Stock and Series B Preferred Stock for the quarter ended September 

30, 2015. Such suspension was extended through March 31, 2016. Penn Virginia’s articles of 

incorporation provide that unpaid preferred stock dividends accumulate if unpaid. Accordingly, as of 

March 31, 2016, Penn Virginia had accumulated a total of approximately $14 million in unpaid preferred 

stock dividends, including approximately $2 million attributable to the Series A Preferred Stock and 

approximately $12 million attributable to the Series B Preferred Stock.

 Until recently, Penn Virginia’s common stock was publicly traded on the New York Stock 

Exchange (the “NYSE”) under the symbol “PVA.” As of the Petition Date, there were approximately 

88 million shares of Penn Virginia common stock outstanding, with a par value of $0.01 per share and a 

total market value as of the Petition Date of approximately $7 million—which reflects a per share price of 

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less than ten cents. On January 12, 2016, the NYSE delisted Penn Virginia’s common stock, which is 

now publicly traded over the counter under the symbol “PVAH.”

VI. EVENTS LEADING TO THE CHAPTER 11 FILINGS

A. Adverse Market Conditions

As noted above, the Debtors’ businesses recently have come under significant pressure from 

macroeconomic forces beyond their control. Rig counts, a common indicator of new upstream drilling 

activity, are down nearly 60 percent over the past year. Demonstrating just how closely the Debtors’

success is tied to commodities prices, the price of the Penn Virginia’s publicly-traded common shares has 

fallen approximately 99 percent since the end of 2014. In response to the recent market contraction, the 

Debtors have drastically reduced their drilling activities, reducing the number of operating rigs from eight 

to one over the course of 2015 and suspended their drilling program completely in February 2016. 

The Debtors’ difficulties are consistent with the difficulties industry-wide. Several E&P 

companies have been forced to file for chapter 11 protection since the downturn in commodities prices, 

including American Eagle Energy Corporation, Quicksilver Resources Inc., Saratoga Resources Inc., 

Sabine Oil & Gas Corporation, Samson Resources Corporation, Magnum Hunter Resources Corporation, 

Swift Energy Company, Energy & Exploration Partners, LLC, Energy XXI, Ltd., Ultra Petroleum 

Corporation, and Midstates Petroleum Company, Inc., have filed for chapter 11 protection in 2015 and 

early 2016. A growing number of other similarly situated companies have defaulted on their debt 

obligations, negotiated amendments or covenant relief with creditors to avoid defaulting, or have 

effectuated out-of-court restructurings. 

B. Proactive Approach to Addressing Liquidity Constraints

In response to deteriorating market conditions, the Debtors commenced various cost-saving 

initiatives and other strategic restructuring efforts in late 2015. As an initial measure, the Debtors sold 

certain non-core assets, including (a) certain assets in East Texas for net proceeds of approximately 

$73 million in August 2015 and (b) certain non-core properties in the southwestern portion of the Eagle 

Ford for net proceeds of approximately $13 million in October 2015. The Debtors have also reduced 

employee headcount by approximately 40 percent from year-end 2014 levels through administrative and 

operations restructuring initiatives taken in May and October 2015, and February 2016. Additional 

liquidity enhancing measures included: (a) reducing drilling and completion costs through (i) contract 

renegotiations, (ii) improved techniques and (iii) capitalizing on lower industry pricing for related 

products and services; and (b) as described above, suspending dividend payments with respect to the 

Class A Preferred Stock and Class B Preferred Stock beginning the quarter ended September 30, 2015. 

Recognizing that a near-term solution to their liquidity constraints may not be achievable without 

a more comprehensive restructuring of their liabilities, the Debtors sought external strategic advice and 

assistance, engaging Jefferies, LLC as investment banker, Kirkland & Ellis LLP as legal advisor, and 

A&M as restructuring advisor in January 2016. Additionally, as stated above, on March 22, 2016, the 

Debtors appointed R. Seth Bullock of A&M as Chief Restructuring Officer. The advisors were retained 

to assist the Debtors with exploring strategic alternatives to their current liquidity situation in a manner 

that will maximize value for all of the Debtors’ stakeholders.

C. The Restructuring Negotiations, RBL Amendments, and Third-Party Process.

The Debtors’ challenges came to a head in early 2016 when their registered independent public 

accountants issued an opinion with an explanatory paragraph expressing substantial doubt as to the 

Debtors’ ability to continue as a “going concern.” The RBL Facility requires that the Debtors deliver 

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audited, consolidated financial statements without such a qualification (i.e., a “clean opinion”). As a 

result of this event of default, and certain cross-default provisions applicable to the Notes, the Debtors 

classified all of their total outstanding funded-debt obligations—more than $1.2 billion—as short-term as 

of December 31, 2015. Such classification gave rise to a breach (upon the March 15, 2016 filing of Penn 

Virginia’s Form 10-K for the fiscal year ended December 31, 2015) of the “current ratio” covenant under 

the RBL Facility. Further, due to the depressed and declining operating conditions, the Debtors realized 

that they may not be able to satisfy certain other financial covenants applicable to the RBL Facility. 

As an initial stopgap, on January 8, 2016, the Debtors and the RBL Agent agreed to the Tenth 

RBL Amendment, under which: (i) the Debtors were permitted to convert to or continue LIBOR loans 

without having to make a solvency representation; and (ii) the RBL Facility’s mortgage requirement was 

increased from 80% to 100% (subject to certain exceptions) of the Debtors’ proved reserves. In search of 

a more lasting solution, during the first two months of 2016, the Debtors and their advisors engaged the 

RBL Agent in discussions regarding an amendment to the RBL Facility that would give the Debtors 

breathing room to explore more comprehensive restructuring alternatives. On March 15, 2016, the 

Debtors and the RBL Agent executed the Eleventh RBL Amendment, the core terms of which are as 

follows: 

• the RBL Agent and the RBL Lenders agreed that certain 

specified defaults would not become events of default (and, 

therefore, that the RBL Lenders would not exercise remedies) 

until April 12, 2016, subject to a possible further extension to 

May 10, 2016; 

• in exchange, the Debtors agreed to liquidate two Swap 

Contracts, and use the proceeds to pay down the RBL Facility

balance; 

• the applicable interest rate for the remaining borrowing base 

under the RBL Facility was increased by 1%; 

• the RBL Facility borrowing base would not be subject to a 

scheduled redetermination until May 15, 2016; and 

• as described above, total commitments under the RBL Facility 

(a) were reduced to $171.8 million, to match then-current loans 

outstanding and letters of credit issued, and (b) would be further 

reduced upon pay down of the RBL Facility balance to match 

outstanding loans and letters of credit issued.

In accordance with the terms of the Eleventh RBL Amendment, in March 2016, the Debtors 

liquidated two Swap Contracts for $22.9 million and used the proceeds to pay down the RBL Facility 

balance. The Debtors’ agreement (made in consultation with the advisors to the Ad Hoc Committee) to 

liquidate the two Swap Contracts and apply the proceeds to the outstanding RBL Facility balance was a 

critical first step toward a broader consensus in these chapter 11 cases. The counterparties to all six of the 

Debtors’ prepetition Swap Contracts were also RBL Lenders or affiliates of RBL Lenders and would have 

argued for setoff rights with respect to the proceeds from the Swap Contracts, although the Debtors felt 

they had certain arguments to the contrary. The Debtors’ agreement, in consultation with the advisors to 

the Ad Hoc Committee, to liquidate the first two Swap Contracts pursuant to the Eleventh RBL 

Amendment reflects their assessment as to the relative strength of such arguments compared to the 

benefits of proceeding toward a consensual resolution. Additionally, since the values of the Swap 

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Contracts were declining in light of recent gains in crude oil prices, the Debtors’ strategic decision to 

liquidate such Swap Contracts avoided further value erosion. 

The Debtors’ ability to exercise the extension of Eleventh RBL Amendment to May 10, 2016 was 

conditioned on a number of factors, most significantly: (a) the representative from the Ad Hoc 

Committee not notifying the RBL Agent that it is not in support of the extension; and (b) the Debtors 

liquidating two further Swap Contracts and using the majority of the proceeds to pay down the RBL 

Facility balance. The Debtors ultimately satisfied these conditions and secured an extension of the 

Eleventh RBL Amendment to May 10, 2016. In April 2016, the Debtors liquidated two additional Swap 

Contracts for $22.6 million. Under the terms of the Eleventh RBL Amendment, the Debtors retained

$6 million from the proceeds of the second Swap Contracts liquidation to fund working capital needs, 

subject to certain conditions. The Debtors used the remaining proceeds to pay down the RBL Facility 

balance.

Again, the Debtors’ decision to liquidate two additional Swap Contracts reflected progress in 

their negotiations with the Ad Hoc Committee and the RBL Lenders and, as with the prior liquidation of 

Swap Contracts liquidation, the Debtors’ decision was made in after input from the advisors to the Ad 

Hoc Committee. 

The Debtors and their advisors took full advantage of the additional runway afforded by the RBL 

Amendments and subsequent extension. In addition to engaging with the RBL Agent and RBL Lenders, 

the Debtors engaged in substantial negotiations with the Ad Hoc Committee. In an exercise of their 

reasonable business judgment, the Debtors focused on a process by which they would liquidate the Swap 

Contracts to pay down the RBL Facility balance in return for certain accommodations from the RBL 

Lenders—most significantly their commitment to fund the Exit Facility. Similarly, the RBL Lenders 

were hesitant to proceed with a restructuring absent an agreement with the Ad Hoc Committee and some 

source of post-emergence, non-Exit Facility working capital. Accordingly, the Debtors negotiated the 

debt-for-equity swap with the Ad Hoc Committee and the terms of the Rights Offering. Ultimately, the 

Debtors brokered a resolution under which significant stakeholders made both concessions and 

accommodations for post-emergence liquidity. The terms of this resolution are embodied in the 

Restructuring Support Agreement, the Plan, and the DIP Facility. 

On May 10, 2016, the Debtors, lenders holding 100 percent of the principal amount loans arising 

under the RBL Facility, and holders of approximately 86 percent of the principal amount of the Notes 

executed the Restructuring Support Agreement. On the Petition Date, in accordance with the Milestones, 

the Debtors commenced these chapter 11 cases. Significantly, as required by the Restructuring Support 

Agreement, the Debtors liquidated their final two prepetition Swap Contracts in the week preceding the 

Petition Date, on May 4, 2016 and May 11, 2016, respectively. The Debtors received an aggregate of

approximately $15.3 million in connection with the final Swap Contracts liquidations. In accordance 

with the Restructuring Support Agreement and the Amended Eleventh RBL Amendment the Debtors 

retained $5 million to fund ongoing liquidity needs, including the administration of these chapter 11 

cases, and used the balance of the aggregate proceeds from the final Swap Contract liquidations to pay 

down the RBL Facility balance. In return, pursuant to the Amended Eleventh RBL Amendment, the RBL 

Agent extended the terms of the Eleventh RBL Amendment to May 12, 2016. The last two Swap 

Contract liquidations represent the final steps in the negotiation process—the Debtors did not agree to 

liquidate the final Swap Contract, a key source of potential funds for a non-consensual chapter 11 

proceeding, until the parties had fully executed the Restructuring Support Agreement. 

While the Debtors reasonably chose to liquidate of the Swap Contracts to facilitate the 

discussions that ultimately led to the Restructuring Support Agreement, the Debtors were left in the 

precarious position of being unhedged to commodity price risk as of the Petition Date. Due to the volatile 

nature of oil and gas prices, E&P companies rarely operate without hedging arrangements in place, and 

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the Debtors have not historically done so. To insure against market risk both during these chapter 11 

cases and beyond, on the Petition Date, the Debtors filed a motion seeking authority to enter into new, 

postpetition Swap Contracts (the “Swap Motion”). On [●], 2016, the Bankruptcy Court entered an order 

approving the Swap Motion and the Debtors entered into new Swap Contracts shortly thereafter. The 

new Swap Contracts will help to avoid business disruption during a sensitive time when the Debtors are 

implementing the terms of an enterprise-saving restructuring transaction. Moreover, as described below, 

securing the new Swap Contracts is a necessary condition to securing the maximum availability of $128 

million under the Exit Facility.

 Finally, parallel to the Restructuring Support Agreement negotiations, the Debtors and their 

advisors engaged in a third-party marketing process. With Jefferies’ assistance, the Debtors contacted 16

potential new investors, including both strategic and financial investors. The Debtors ultimately received

non-binding restructuring term sheets from four outside parties (the “Third-Party Proposals”). The 

Debtors and their advisors engaged in an intense, comparative analysis of the transactions contemplated 

by the Restructuring Support Agreement and the Third-Party Proposals and determined that the 

Restructuring Support Agreement embodies the best alternative to maximize value for all of the Debtors’ 

estates.12

D. The Restructuring Support Agreement and DIP Facility 

As part of the Restructuring Support Agreement, the RBL Lenders, in their capacity as DIP 

Lenders, agreed to fund the DIP Facility. The DIP Facility provides the Debtors with postpetition 

financing in the form of a senior secured, new money facility in the aggregate principal amount of 

$25 million. This amount will be made available in 3 installments, the availability of which is tied to 

certain conditions and funded as follows: 

• $10 million was made available upon entry of an interim order 

approving the DIP Facility on [●], 2016; 

• up to $10 million in additional funds were made available upon 

entry of a final order approving the DIP Facility on [●], 2016; 

and 

• up to $5 million will be made incrementally available to the 

Debtors on a weekly basis following the entry of the Final Order, 

subject to certain conditions set forth in the DIP Facility 

Agreement. 

Further, the DIP Facility and the Restructuring Support Agreement provide the Debtors with 

access to the consensual use of the RBL Lenders’ cash collateral. The Debtors conducted a process to 

gauge third-party interest in providing debtor-in-possession financing, ultimately concluding that such 

third-party financing could not be obtained on terms as favorable as those provided by the RBL 

Lenders.13 In sum, the DIP Facility gives the Debtors sufficient liquidity to stabilize their operations and 

 

12 Additional details regarding the Debtors prepetition third-party marketing process are set forth in the declaration of R. Seth 

Bullock in support of the Debtors’ Motion for Entry of an Order (I) Authorizing the Debtors to Assume (A) the 

Restructuring Support Agreement, (B) the Backstop Commitment Agreement, and (C) the Exit Commitment Letters, (II) 

Authorizing the Debtors to Pay Certain Fees in Connection Therewith, and (III) Granting Related Relief [Docket No. ●], 

filed on the Petition Date (the “Approval Motion”).

13 Additional details regarding the third-party debtor-in-possession financing marketing process are set forth in declaration of 

Richard Morgner in support of the Debtors’ Motion for Entry of Interim and Final Orders (I) Authorizing the Debtors to (A) 

Obtain Senior Secured Superpriority Postpetition Financing and (B) Utilize Cash Collateral of the Prepetition Secured 

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fund the administration of the Chapter 11 Cases as the Debtors seek to implement the restructuring 

embodied in the Restructuring Support Agreement. 

The Restructuring Support Agreement provides for the reorganization of the Debtors as a going 

concern with a substantially deleveraged capital structure and sufficient liquidity to fund the Debtors’ 

postpetition business plan. The key elements of the reorganization contemplated by the Restructuring 

Support Agreement are: (a) the refinancing of the RBL Facility through a complete pay-down with funds 

from the Exit Facility and Rights Offering; (b) the full equitization of the Notes and General Unsecured 

Claims; and (c) the cancellation of the Debtors’ preferred equity obligations. 

In addition to settling certain disputes that, if litigated, could be costly and could significantly 

delay the Debtors’ emergence from chapter 11, the Restructuring Support Agreement provides the 

Debtors’ with significant incremental liquidity by way of the Exit Facility and Rights Offering. The 

availability of the Exit Facility is of particular significance—traditional banks have become increasingly 

unwilling to lend to E&P companies in light of current market conditions. To have a bank-funded exit 

facility fully committed as of the Petition Date is unprecedented in the recent wave of E&P company 

chapter 11 filings. But, availability of the full $128 million capacity under the Exit Facility is dependent, 

in part, on the Debtors’ ability to secure “Minimum Hedges” as of the Effective Date. Accordingly, 

pursuant to the Swap Motion the Debtors sought, and on [●], 2016 were granted, authority from the 

Bankruptcy Court to enter into new, postpetition Swap Contracts, thus ensuring the maximum availability 

under the Exit Facility. 

The Debtors filed the Chapter 11 Cases to implement their prearranged restructuring pursuant to 

the terms of the Restructuring Support Agreement, enhance liquidity, and bolster their long-term growth 

prospects and operating performance. The Plan represents the successful culmination of months of 

restructuring efforts and gives the Debtors the best opportunity to withstand current adverse market 

conditions, generate sufficient liquidity to fund their operations, and maximize value for the benefit of 

their stakeholders.

VII. MATERIAL DEVELOPMENTS AND ANTICIPATED EVENTS OF THE CHAPTER 11 

CASES 

A. Corporate Structure upon Emergence

Except as otherwise provided in the Plan or any agreement, instrument, or other document 

incorporated in the Plan or the Plan Supplement, on the Effective Date, each Debtor shall continue to 

exist after the Effective Date as a separate corporation, limited liability company, partnership, or other 

form of entity, as the case may be, with all the powers of a corporation, limited liability company, 

partnership, or other form of entity, as the case may be, pursuant to the applicable law in the jurisdiction 

in which each applicable Debtor is incorporated or formed and pursuant to the respective certificate of 

incorporation and by-laws (or other analogous formation documents) in effect before the Effective Date, 

except to the extent such certificate of incorporation and bylaws (or other analogous formation 

documents) are amended by the Plan or otherwise, and to the extent such documents are amended, such 

documents are deemed to be amended pursuant to the Plan and require no further action or approval 

(other than any requisite filings required under applicable state, provincial, or federal law). 

 

Parties, (II) Granting Adequate Protection to the Prepetition Secured Parties, (III) Modifying the Automatic Stay, 

(IV) Scheduling a Final Hearing, and (V) Granting Related Relief [Docket No. ●], filed on the Petition Date.

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B. Expected Timetable of the Chapter 11 Cases

The Debtors expect the Chapter 11 Cases to proceed quickly. Should the Debtors’ projected 

timelines prove accurate, the Debtors could emerge from chapter 11 in fewer than four months after the 

Petition Date. Under the terms of the Restructuring Support Agreement, the Debtors are required to 

administer the Chapter 11 Cases in accordance with the Milestones. No assurances can be made, 

however, that the Bankruptcy Court will enter various orders on the timetable anticipated by the 

Debtors. 

C. First Day Relief

On the Petition Date, along with their voluntary petitions for relief under chapter 11 of the 

Bankruptcy Code (the “Petitions”), the Debtors filed several motions (the “First Day Motions”) designed 

to facilitate the administration of the Chapter 11 Cases and minimize disruption to the Debtors’ 

operations, by, among other things, easing the strain on the Debtors’ relationships with employees, 

vendors, and customers following the commencement of the Chapter 11 Cases. A brief description of 

each of the First Day Motions and the evidence in support thereof is set forth in the Declaration of R. Seth 

Bullock, Chief Restructuring Officer of Penn Virginia Corporation, in Support of Chapter 11 Petitions 

and First Day Motions [Docket No. 4], filed on May 12, 2016. 

The First Day Motions, the First Day Declaration, and all orders for relief granted in the Chapter 

11 Cases, can be viewed free of charge at http://dm.epiq11.com/PVA. 

D. Other Procedural and Administrative Motions

The Debtors also filed several other motions subsequent to the Petition Date to further facilitate 

the smooth and efficient administration of the Chapter 11 Cases and reduce the administrative burdens 

associated therewith, including:

• Schedules and Statements Extension Motion. On May 12, 2016, 

the Debtors filed the Debtors’ Motion for Entry of an Order 

(I) Extending Time to File Schedules of Assets and 

Liabilities, Schedules of Current Income and Expenditures, 

Schedules of Executory Contracts and Unexpired Leases, and 

Statements of Financial Affairs and (II) Granting Related Relief 

[Docket No. 5] (the “Schedules Extension Motion”). The 

Schedules Extension Motion seeks to extend the time for filing 

the Debtors’ schedules and statements of financial affairs 

through and including June 6, 2016. A hearing on the Schedules 

Extension Motion will be held on [●], 2016. 

• Ordinary Course Professionals Motion. On [●], 2016, the 

Debtors filed the Debtors’ Motion for Entry of an Order (I) 

Authorizing the Debtors to Retain and Compensate Professionals 

Utilized in the Ordinary Course of Business and (II) Granting 

Related Relief [Docket No. ●] (the “OCP Motion”). The OCP 

Motion seeks to establish procedures for the retention and 

compensation of certain professionals utilized by the Debtors in 

the ordinary course operation of their businesses. A hearing on 

the OCP Motion will be held on [●], 2016.

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• Claims Bar Date Motion. On [●], 2016, the Debtors filed the 

Debtors’ Motion for Entry of an Order (I) Setting Bar Dates for 

Filing Proofs of Claim, Including Requests for Payment under 

Section 503(b)(9), (II) Establishing Amended Schedules Bar 

Date and Rejection Damages Bar Date, (III) Approving the Form 

of and Manner for Filing Proofs of Claim, Including Section 

503(b)(9) Requests, (IV) Approving Notice of Bar Dates, and 

(V) Granting Related Relief [Docket No. ●] (the “Bar Date 

Motion”). The Bar Date Motion seeks entry of an order 

approving: (a) [●], 2016, at 5:00 p.m., prevailing Eastern Time, 

as the deadline for all non-Governmental Units to File Claims in 

the Chapter 11 Cases; (b) [●], 2016, at 5:00 p.m., prevailing 

Eastern Time, as the deadline for all Governmental Units to File 

Claims in the Chapter 11 Cases; (c) procedures for Filing Proofs 

of Claims; and (d) the form and manner of notice of the bar 

dates. A hearing on the Bar Date Motion will be held on [●], 

2016. 

E. Appointment of Official Committee

On [●], 2016, the U.S. Trustee filed the Notice of Appointment of Committee of Unsecured 

Creditors [Docket No. ●], notifying parties in interest that the U.S. Trustee had appointed a statutory 

committee of unsecured creditors (the “Committee”) in the Chapter 11 Cases. The Committee is 

currently composed of the following members: [●]. The Committee has retained [●] as its legal counsel 

and [●] as its financial advisor, subject to Bankruptcy Court approval. 

F. Approval Motion 

As described more fully herein, before commencing the Chapter 11 Cases, the Debtors, certain 

holders of RBL Claims, and certain holders of Note Claims worked diligently to negotiate the terms of a 

global restructuring. The result of these efforts was the Restructuring Support Agreement executed prior 

to the Petition Date, the material terms of which are incorporated in the Plan. The Restructuring Support 

Agreement binds the support of the Restructuring Support Parties for the restructuring contemplated 

thereby so long as the Debtors satisfy the milestone deadlines and other conditions contained in the 

Restructuring Support Agreement. 

On May 12, 2016, the Debtors filed the Approval Motion. Pursuant to the Approval Motion, the 

Debtors request entry of an order authorizing the Debtors to assume: (a) the prepetition Restructuring 

Support Agreement among the Debtors and the Restructuring Support Parties; (b) the Backstop 

Commitment Agreement; and the Exit Commitment Letters. 

G. Other Litigation Matters 

In the ordinary course of business, the Debtors are parties to certain lawsuits, legal proceedings, 

collection proceedings, and claims arising out of their business operations. The Debtors cannot predict 

with certainty the outcome of these lawsuits, legal proceedings, and claims. 

With certain exceptions, the filing of the Chapter 11 Cases operates as a stay with respect to 

the commencement or continuation of litigation against the Debtors that was or could have been 

commenced before the commencement of the Chapter 11 Cases. In addition, the Debtors’ liability with 

respect to litigation stayed by the commencement of the Chapter 11 Cases generally is subject to 

discharge, settlement, and release upon confirmation of a plan under chapter 11, with certain exceptions. 

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Therefore, certain litigation Claims against the Debtors may be subject to discharge in connection with 

the Chapter 11 Cases. 

H. Rejection and Assumption of Executory Contracts and Unexpired Leases 

Prior to the Petition Date and in the ordinary course of business, the Debtors entered into over one 

thousand Executory Contracts and Unexpired Leases. The Debtors, with the assistance of their advisors, 

have reviewed and will continue to review the Executory Contracts and Unexpired Leases to identify 

contracts and leases to either assume or reject pursuant to sections 365 or 1123 of the Bankruptcy Code. 

In accordance with the Milestones, the Debtors are required to deliver a proposal with regard to the 

treatment of material contracts acceptable to the Majority Consenting Noteholders by no later than thirty 

days after the Petition Date. 

The Debtors intend to include information in the Plan Supplement regarding the assumption or 

rejection of the remainder of their Executory Contracts and Unexpired Leases to be carried out as of the 

Effective Date, but may also elect to file additional discrete motions seeking to assume or reject various 

of the Debtors’ Executory Contracts and Unexpired Leases before such time. 

VIII. RISK FACTORS

Holders of Claims should read and consider carefully the risk factors set forth below before 

voting to accept or reject the Plan. Although there are many risk factors discussed below, these factors 

should not be regarded as constituting the only risks present in connection with the Debtors’ businesses or 

the Plan and its implementation. 

A. Bankruptcy Law Considerations 

The occurrence or non-occurrence of any or all of the following contingencies, and any others, 

could affect distributions available to holders of Allowed Claims under the Plan but will not necessarily 

affect the validity of the vote of the Impaired Classes to accept or reject the Plan or necessarily require a 

re-solicitation of the votes of holders of Claims in such Impaired Classes.

1. Parties in Interest May Object to the Plan’s Classification of Claims and 

Interests

Section 1122 of the Bankruptcy Code provides that a plan may place a claim or an equity interest 

in a particular class only if such claim or equity interest is substantially similar to the other claims or 

equity interests in such class. The Debtors believe that the classification of the Claims and Interests under 

the Plan complies with the requirements set forth in the Bankruptcy Code because the Debtors created 

Classes of Claims and Interests each encompassing Claims or Interests, as applicable, that are 

substantially similar to the other Claims or Interests, as applicable, in each such Class. Nevertheless, 

there can be no assurance that the Bankruptcy Court will reach the same conclusion. 

2. The Conditions Precedent to the Effective Date of the Plan May Not Occur

As more fully set forth in Article IX of the Plan, the Confirmation Date and the Effective Date of 

the Plan are subject to a number of conditions precedent. If such conditions precedent are waived or not 

met, the Confirmation Date or the Effective Date will not take place.

3. The Debtors May Fail to Satisfy Vote Requirements

If votes are received in number and amount sufficient to enable the Bankruptcy Court to confirm 

the Plan, the Debtors intend to seek, as promptly as practicable thereafter, Confirmation of the Plan. In 

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the event that sufficient votes are not received, the Debtors may seek to confirm an alternative chapter 11 

plan or proceed with a sale of all or substantially all of the Debtors’ assets pursuant to section 363 of the 

Bankruptcy Code. There can be no assurance that the terms of any such alternative chapter 11 plan or 

sale pursuant to section 363 of the Bankruptcy Code would be similar or as favorable to the holders of 

Allowed Claims as those proposed in the Plan. 

4. The Debtors May Not Be Able to Secure Confirmation of the Plan

Section 1129 of the Bankruptcy Code sets forth the requirements for confirmation of a chapter 11 

plan, and requires, among other things, a finding by the Bankruptcy Court that: (a) such plan “does not 

unfairly discriminate” and is “fair and equitable” with respect to any non-accepting classes; 

(b) confirmation of such plan is not likely to be followed by a liquidation or a need for further financial 

reorganization unless such liquidation or reorganization is contemplated by the plan; and (c) the value of 

distributions to non-accepting holders of claims and equity interests within a particular class under such 

plan will not be less than the value of distributions such holders would receive if the debtors were 

liquidated under chapter 7 of the Bankruptcy Code. 

There can be no assurance that the requisite acceptances to confirm the Plan will be received. 

Even if the requisite acceptances are received, there can be no assurance that the Bankruptcy Court will 

confirm the Plan. A non-accepting holder of an Allowed Claim might challenge either the adequacy of 

this Disclosure Statement or whether the balloting procedures and voting results satisfy the requirements 

of the Bankruptcy Code or Bankruptcy Rules. Even if the Bankruptcy Court determines that this 

Disclosure Statement, the balloting procedures, and voting results are appropriate, the Bankruptcy Court 

could still decline to confirm the Plan if it finds that any of the statutory requirements for Confirmation 

are not met. If a chapter 11 plan of reorganization is not confirmed by the Bankruptcy Court, it is unclear 

whether the Debtors will be able to reorganize their business and what, if anything, holders of Allowed 

Claims against them would ultimately receive on account of such Allowed Claims.

Confirmation of the Plan is also subject to certain conditions as described in Article IX of the 

Plan. If the Plan is not confirmed, it is unclear what distributions, if any, holders of Allowed Claims will

receive on account of such Allowed Claims. 

The Debtors, subject to the terms and conditions of the Plan and the Restructuring Support 

Agreement, reserve the right to modify the terms and conditions of the Plan as necessary for 

Confirmation. Any such modifications could result in less favorable treatment of any non-accepting 

Class, as well as any Class junior to such non-accepting Class, than the treatment currently provided in 

the Plan. Such a less favorable treatment could include a distribution of property with a lesser value than 

currently provided in the Plan or no distribution whatsoever under the Plan. 

5. Nonconsensual Confirmation 

In the event that any impaired class of claims or interests does not accept a chapter 11 plan, a 

bankruptcy court may nevertheless confirm a plan at the proponents’ request if at least one impaired class 

(as defined under section 1124 of the Bankruptcy Code) has accepted the plan (with such acceptance 

being determined without including the vote of any “insider” in such class), and, as to each impaired class 

that has not accepted the plan, the bankruptcy court determines that the plan “does not discriminate 

unfairly” and is “fair and equitable” with respect to the dissenting impaired class(es). The Debtors 

believe that the Plan satisfies these requirements, and the Debtors may request such nonconsensual 

Confirmation in accordance with subsection 1129(b) of the Bankruptcy Code. Nevertheless, there can be 

no assurance that the Bankruptcy Court will reach this conclusion. In addition, the pursuit of 

nonconsensual Confirmation or Consummation of the Plan may result in, among other things, increased 

expenses relating to professional compensation. 

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6. Continued Risk upon Confirmation 

Even if the Plan is consummated, the Debtors will continue to face a number of risks, including 

certain risks that are beyond their control, such as further deterioration or other changes in economic 

conditions, changes in the industry, potential revaluing of their assets due to chapter 11 proceedings, 

changes in demand for, and acceptance of, their oil, natural gas, and NGLs, and increasing expenses. See 

Article VIII.C of this Disclosure Statement, entitled “Risks Related to the Debtors’ and the Reorganized 

Debtors’ Businesses,” which begins on page 40. Some of these concerns and effects typically become 

more acute when a case under the Bankruptcy Code continues for a protracted period without indication 

of how or when the case may be completed. As a result of these risks and others, there is no guarantee 

that a chapter 11 plan of reorganization reflecting the Plan will achieve the Debtors’ stated goals.

In addition, at the outset of the Chapter 11 Cases, the Bankruptcy Code provides the Debtors with 

the exclusive right to propose the Plan and prohibits creditors and others from proposing a plan. The 

Debtors will have retained the exclusive right to propose the Plan upon filing their Petitions. If the 

Bankruptcy Court terminates that right, however, or the exclusivity period expires, there could be a 

material adverse effect on the Debtors’ ability to achieve confirmation of the Plan in order to achieve the 

Debtors’ stated goals.

Furthermore, even if the Debtors’ debts are reduced and/or discharged through the Plan, the 

Debtors may need to raise additional funds through public or private debt or equity financing or other 

various means to fund the Debtors’ businesses after the completion of the proceedings related to the 

Chapter 11 Cases. Adequate funds may not be available when needed or may not be available on 

favorable terms.

7. The Chapter 11 Cases May Be Converted to Cases under Chapter 7 of the 

Bankruptcy Code

If the Bankruptcy Court finds that it would be in the best interest of creditors and/or the debtor in 

a chapter 11 case, the Bankruptcy Court may convert a chapter 11 bankruptcy case to a case under 

chapter 7 of the Bankruptcy Code. In such event, a chapter 7 trustee would be appointed or elected to 

liquidate the debtor’s assets for distribution in accordance with the priorities established by the 

Bankruptcy Code. The Debtors believe that liquidation under chapter 7 would result in significantly 

smaller distributions being made to creditors than those provided for in a chapter 11 plan because of 

(a) the likelihood that the assets would have to be sold or otherwise disposed of in a disorderly fashion 

over a short period of time, when commodities prices are at historically low levels, rather than 

reorganizing or selling the business as a going concern at a later time in a controlled manner, 

(b) additional administrative expenses involved in the appointment of a chapter 7 trustee, and 

(c) additional expenses and Claims, some of which would be entitled to priority, that would be generated 

during the liquidation, including Claims resulting from the rejection of Unexpired Leases and other 

Executory Contracts in connection with cessation of operations.

8. The Debtors May Object to the Amount or Classification of a Claim 

Except as otherwise provided in the Plan, the Debtors reserve the right to object to the amount or 

classification of any Claim under the Plan. The estimates set forth in this Disclosure Statement cannot be 

relied upon by any holder of a Claim where such Claim is subject to an objection. Any holder of a Claim 

that is subject to an objection thus may not receive its expected share of the estimated distributions 

described in this Disclosure Statement.

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9. Risk of Non-Occurrence of the Effective Date

Although the Debtors believe that the Effective Date may occur quickly after the Confirmation 

Date, there can be no assurance as to such timing or as to whether the Effective Date will, in fact, occur. 

10. Contingencies Could Affect Votes of Impaired Classes to Accept or Reject 

the Plan

The distributions available to holders of Allowed Claims under the Plan can be affected by a 

variety of contingencies, including, without limitation, whether the Bankruptcy Court orders certain 

Allowed Claims to be subordinated to other Allowed Claims. The occurrence of any and all such 

contingencies, which could affect distributions available to holders of Allowed Claims under the Plan, 

will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require 

any sort of revote by the Impaired Classes.

The estimated Claims and creditor recoveries set forth in this Disclosure Statement are based on 

various assumptions, and the actual Allowed amounts of Claims may significantly differ from the 

estimates. Should one or more of the underlying assumptions ultimately prove to be incorrect, the actual 

Allowed amounts of Claims may vary from the estimated Claims contained in this Disclosure Statement. 

Moreover, the Debtors cannot determine with any certainty at this time, the number or amount of Claims 

that will ultimately be Allowed. Such differences may materially and adversely affect, among other 

things, the percentage recoveries to holders of Allowed Claims under the Plan. 

11. Releases, Injunctions, and Exculpations Provisions May Not Be Approved

Article VIII of the Plan provides for certain releases, injunctions, and exculpations, including a 

release of liens and third-party releases that may otherwise be asserted against the Debtors, Reorganized 

Debtors, or Released Parties, as applicable. The releases, injunctions, and exculpations provided in the 

Plan are subject to objection by parties in interest and may not be approved. If the releases are not 

approved, certain Released Parties may withdraw their support for the Plan. 

B. Risks Related to Recoveries under the Plan

1. The Total Amount of Allowed General Unsecured Claims May Be Higher 

Than Anticipated By the Debtors 

With respect to holders of Allowed General Unsecured Claims, the claims filed against the 

Debtors’ estates may be materially higher than the Debtors have estimated. 

2. The Debtors May Not Be Able to Achieve their Projected Financial Results

The Reorganized Debtors may not be able to achieve their projected financial results. The 

Financial Projections set forth in this Disclosure Statement represent the Debtors’ management team’s 

best estimate of the Debtors’ future financial performance, which is necessarily based on certain 

assumptions regarding the anticipated future performance of the Reorganized Debtors’ operations, as well 

as the United States and world economies in general, and the industry segments in which the Debtors 

operate in particular. While the Debtors believe that the Financial Projections contained in this 

Disclosure Statement are reasonable, there can be no assurance that they will be realized. If the Debtors 

do not achieve their projected financial results, the value of the New Common Stock may be negatively 

affected and the Debtors may lack sufficient liquidity to continue operating as planned after the Effective 

Date. Moreover, the financial condition and results of operations of the Reorganized Debtors from and 

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after the Effective Date may not be comparable to the financial condition or results of operations reflected 

in the Debtors’ historical financial statements. 

3. The New Common Stock Initially Will Not Be Publicly Traded

The New Common Stock to be issued under the Plan will not initially be listed or traded on any 

nationally recognized market or exchange. Accordingly, there can be no assurance that an active trading 

market for the New Common Stock will develop, nor can any assurance be given as to the prices at which 

such stock might be traded. In the event an active trading market does not develop, the ability to transfer 

or sell New Common Stock may be substantially limited. 

4. Certain Holders of New Common Stock May Be Restricted in their Ability 

to Transfer or Sell their Securities 

To the extent that the New Common Stock issued under the Plan is covered by section 1145(a)(1)

of the Bankruptcy Code, it may be resold by the holders thereof without registration under the Securities 

Act unless the holder is an “underwriter,” as defined in section 1145(b) of the Bankruptcy Code with 

respect to such securities. Resales by Persons who receive New Common Stock pursuant to the Plan that 

are deemed to be “underwriters” would not be exempted by section 1145 of the Bankruptcy Code from 

registration under the Securities Act or applicable law. Such Persons would only be permitted to sell such 

securities without registration if they are able to comply with an applicable exemption from registration, 

including Rule 144 under the Securities Act. 

The New Common Stock will not initially be registered under the Securities Act or any state 

securities laws, and the Debtors make no representation regarding the right of any holder of New 

Common Stock to freely resell the New Common Stock. See Article XII to this Disclosure Statement, 

entitled “Certain Securities Law Matters,” which begins on page 55. 

5. Restricted Securities Issued under the Plan May Not Be Resold or Otherwise 

Transferred Unless They Are Registered Under the Securities Act or an 

Exemption from Registration Applies

The Rights Offering Shares will be deemed “restricted securities” that may not be sold, 

exchanged, assigned or otherwise transferred unless they are registered, or an exemption from registration 

applies, under the Securities Act. Holders of Rights Offering Shares (other than the Backstop Parties) 

will not be entitled to have their Rights Offering Shares registered and will be required to agree not to 

resell them except in accordance with the exemption from registration provided by Rule 144 under the 

Securities Act, when available. Rule 144 permits the public resale of restricted securities if certain 

conditions are met, and these conditions vary depending on whether the holder of the restricted securities 

is an “affiliate” of the issuer, as defined in Rule 144. A non-affiliate who has not been an affiliate of the 

issuer during the preceding three months may resell restricted securities after a six-month holding period 

unless certain current public information regarding the issuer is not available at the time of sale, in which 

case the non-affiliate may resell after a one-year holding period. An affiliate may resell restricted 

securities after a six-month holding period but only if certain current public information regarding the 

issuer is available at the time of the sale and only if the affiliate also complies with the volume, manner of 

sale and notice requirements of Rule 144. While the Debtors currently expect that the current public 

information requirement will be met when the six-month holding period expires, they cannot guarantee 

that resales of the restricted securities will qualify for an exemption from registration under Rule 144. In 

any event, Holders of Rights Offering Shares should expect to be required to hold their Rights Offering 

Shares for at least six months. 

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Holders of Rights Offering Shares who are deemed to be “underwriters” under Section 1145(b) of 

the Bankruptcy Code will also be subject to restrictions under the Securities Act on their ability to resell 

those securities. Resale restrictions are discussed in more detail in Article XII to this Disclosure 

Statement, entitled “Certain Securities Law Matters,” which begins on page 55. 

6. Certain Tax Implications of the Plan

Holders of Allowed Claims should carefully review Article XII of this Disclosure Statement, 

entitled “Certain United States Federal Income Tax Consequences of the Plan,” which begins on page 55, 

to determine how the tax implications of the Plan and the Chapter 11 Cases may adversely affect the 

Reorganized Debtors and holders of Claims. 

7. The Debtors May Not Be Able to Accurately Report Their Financial Results

The Debtors have established internal controls over financial reporting. However, internal 

controls over financial reporting may not prevent or detect misstatements or omissions in the Debtors’ 

financial statements because of their inherent limitations, including the possibility of human error, and the 

circumvention or overriding of controls or fraud. Therefore, even effective internal controls can provide 

only reasonable assurance with respect to the preparation and fair presentation of financial statements. If 

the Debtors fail to maintain the adequacy of their internal controls, the Debtors may be unable to provide 

financial information in a timely and reliable manner within the time periods required for the Debtors’ 

financial reporting under SEC rules and regulations and the terms of the agreements governing the 

Debtors’ indebtedness. Any such difficulties or failure could materially adversely affect the Debtors’ 

business, results of operations, and financial condition. Further, the Debtors may discover other internal 

control deficiencies in the future and/or fail to adequately correct previously identified control 

deficiencies, which could materially adversely affect the Debtors’ businesses, results of operations, and 

financial condition.

8. The Debtors May Not Be Able to Obtain Incremental Funding Under the 

DIP Facility 

Under the terms of the DIP Credit Agreement, the $25 million DIP Facility will be made 

available to the Debtors in the form of two loans of up to $10 million each and a third loan of up to 

$5 million, available upon: (i) entry of an interim order by the Bankruptcy Court approving the DIP 

Facility; (ii) entry of a final order by the Bankruptcy Court approving the DIP Facility; and 

(iii) incrementally on a weekly basis thereafter. Availability of incremental funding under the DIP 

Facility is subject to a number of conditions precedent, not all of which may occur. If the Debtors do not 

obtain the incremental funding under the DIP Facility, they may lack sufficient liquidity to continue 

operating in the ordinary course, may be unable to the consummate the Plan or any other plan of 

reorganization, or may be forced to seek alternative sources of financing, which may not be available on 

terms as favorable as those provided under the DIP Facility.

C. Risks Related to the Debtors’ and the Reorganized Debtors’ Businesses

1. The Reorganized Debtors May Not Be Able to Generate Sufficient Cash to 

Service All of their Indebtedness

The Reorganized Debtors’ ability to make scheduled payments on, or refinance their debt 

obligations, depends on the Reorganized Debtors’ financial condition and operating performance, which 

are subject to prevailing economic, industry, and competitive conditions and to certain financial, business, 

legislative, regulatory, and other factors beyond the Reorganized Debtors’ control. The Reorganized 

Debtors may be unable to maintain a level of cash flow from operating activities sufficient to permit the 

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Reorganized Debtors to pay the principal, premium, if any, and interest on their indebtedness, including, 

without limitation, anticipated borrowings under the Exit Facility upon emergence. 

2. The Debtors Will Be Subject to the Risks and Uncertainties Associated with 

the Chapter 11 Cases

For the duration of the Chapter 11 Cases, the Debtors’ ability to operate, develop, and execute a 

business plan, and continue as a going concern, will be subject to the risks and uncertainties associated 

with bankruptcy. These risks include the following: (a) ability to develop, confirm, and consummate the 

Restructuring Transactions specified in the Plan; (b) ability to obtain Bankruptcy Court approval with 

respect to motions filed in the Chapter 11 Cases from time to time; (c) ability to maintain relationships 

with suppliers, service providers, customers, employees, royalty interest holders, working interest holders, 

and other third parties; (d) ability to maintain contracts that are critical to the Debtors’ operations; (e) 

ability of third parties to seek and obtain Bankruptcy Court approval to terminate contracts and other 

agreements with the Debtors; (f) ability of third parties to seek and obtain Bankruptcy Court approval to 

terminate or shorten the exclusivity period for the Debtors to propose and confirm a chapter 11 plan, to 

appoint a chapter 11 trustee, or to convert the Chapter 11 Cases to chapter 7 proceedings; and (g) the 

actions and decisions of the Debtors’ creditors and other third parties who have interests in the Chapter 11 

Cases that may be inconsistent with the Debtors’ plans. 

These risks and uncertainties could affect the Debtors’ businesses and operations in various ways. 

For example, negative events associated with the Chapter 11 Cases could adversely affect the Debtors’ 

relationships with suppliers, service providers, customers, employees, and other third parties, which in 

turn could adversely affect the Debtors’ operations and financial condition. Also, the Debtors will need 

the prior approval of the Bankruptcy Court for transactions outside the ordinary course of business, which 

may limit the Debtors’ ability to respond timely to certain events or take advantage of certain 

opportunities. Because of the risks and uncertainties associated with the Chapter 11 Cases, the Debtors 

cannot accurately predict or quantify the ultimate impact of events that occur during the Chapter 11 Cases 

that may be inconsistent with the Debtors’ plans.

3. Operating in Bankruptcy for a Long Period of Time May Harm the 

Debtors’ Businesses

The Debtors’ future results will be dependent upon the successful confirmation and 

implementation of a plan of reorganization. A long period of operations under Bankruptcy Court 

protection could have a material adverse effect on the Debtors’ businesses, financial condition, results of 

operations, and liquidity. So long as the proceedings related to the Chapter 11 Cases continue, senior 

management will be required to spend a significant amount of time and effort dealing with the 

reorganization instead of focusing exclusively on business operations. A prolonged period of operating

under Bankruptcy Court protection also may make it more difficult to retain management and other key 

personnel necessary to the success and growth of the Debtors’ businesses. In addition, the longer the 

proceedings related to the Chapter 11 Cases continue, the more likely it is that customers and suppliers 

will lose confidence in the Debtors’ ability to reorganize their businesses successfully and will seek to 

establish alternative commercial relationships.

So long as the proceedings related to the Chapter 11 Cases continue, the Debtors will be required 

to incur substantial costs for professional fees and other expenses associated with the administration of 

the Chapter 11 Cases. The chapter 11 proceedings also require the Debtors to seek debtor-in-possession 

financing to fund operations. If the Debtors are unable to obtain final approval of such financing on 

favorable terms or at all, or if the Debtors are unable to fully draw on the availability under the DIP 

Facility, the chances of successfully reorganizing the Debtors’ businesses may be seriously jeopardized, 

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the likelihood that the Debtors will instead be required to liquidate or sell their assets may be increased, 

and, as a result, creditor recoveries may be significantly impaired. 

Furthermore, the Debtors cannot predict the ultimate amount of all settlement terms for the 

liabilities that will be subject to a plan of reorganization. Even after a plan of reorganization is approved 

and implemented, the Reorganized Debtors’ operating results may be adversely affected by the possible 

reluctance of prospective lenders and other counterparties to do business with a company that recently 

emerged from bankruptcy protection. 

4. Financial Results May Be Volatile and May Not Reflect Historical Trends

During the Chapter 11 Cases, the Debtors expect that their financial results will continue to be 

volatile as asset impairments, asset dispositions, restructuring activities and expenses, contract 

terminations and rejections, and/or claims assessments significantly impact the Debtors’ consolidated 

financial statements. As a result, the Debtors’ historical financial performance likely will not be 

indicative of their financial performance after the Petition Date.

In addition, if the Debtors emerge from chapter 11, the amounts reported in subsequent 

consolidated financial statements may materially change relative to historical consolidated financial 

statements, including as a result of revisions to the Debtors’ operating plans pursuant to a plan of 

reorganization. The Debtors also may be required to adopt “fresh start” accounting in accordance with 

Accounting Standards Codification 852 (“Reorganizations”) in which case their assets and liabilities will 

be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded 

values of assets and liabilities on the Debtors’ consolidated balance sheets. The Debtors’ financial results 

after the application of fresh start accounting also may be different from historical trends. The Financial 

Projections contained in Exhibit G hereto do not currently reflect the impact of fresh start accounting, 

which may have a material impact on the Financial Projections. 

5. The Debtors’ Substantial Liquidity Needs May Impact Production Levels 

and Revenue

The Debtors’ principal sources of liquidity historically have been cash flow from operations, sales 

of oil and gas properties, borrowings under the RBL Facility, issuances of debt securities, including the 

Notes, issuances of equity securities, including the Preferred Stock. If the Debtors’ cash flow from 

operations remains depressed or decreases as a result of lower commodity prices or otherwise, the 

Debtors’ ability to expend the capital necessary to replace proved reserves, maintain leasehold acreage, or 

maintain current production may be limited, resulting in decreased production and proved reserves over 

time. 

The Debtors face uncertainty regarding the adequacy of their liquidity and capital resources and 

have extremely limited, if any, access to additional financing. In addition to the cash necessary to fund 

ongoing operations, the Debtors have incurred significant professional fees and other costs in connection 

with preparing for the Chapter 11 Cases and expect to continue to incur significant professional fees and 

costs throughout the Chapter 11 Cases. The Debtors cannot guarantee that cash on hand, cash flow from 

operations, and cash provided by the DIP Facility will be sufficient to continue to fund their operations

and allow the Debtors to satisfy obligations related to the Chapter 11 Cases until the Debtors are able to 

emerge from bankruptcy protection. 

The Debtors’ liquidity, including the ability to meet ongoing operational obligations, will be 

dependent upon, among other things: (a) their ability to comply with the terms and condition of any 

debtor-in-possession financing and/or cash collateral order entered by the Bankruptcy Court in connection 

with the Chapter 11 Cases; (b) their ability to maintain adequate cash on hand; (c) their ability to generate 

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cash flow from operations; (d) their ability to develop, confirm, and consummate a chapter 11 plan or 

other alternative restructuring transaction; (e) the availability of incremental draws under the DIP Facility; 

and (f) the cost, duration, and outcome of the Chapter 11 Cases. The Debtors’ ability to maintain adequate 

liquidity depends, in part, upon industry conditions and general economic, financial, competitive, 

regulatory, and other factors beyond the Debtors’ control. In the event that cash on hand, cash flow from 

operations, and cash provided under the DIP Facility are not sufficient to meet the Debtors’ liquidity 

needs, the Debtors may be required to seek additional financing. The Debtors can provide no assurance 

that additional financing would be available or, if available, offered to the Debtors on acceptable terms. 

The Debtors’ access to additional financing is, and for the foreseeable future likely will continue to be, 

extremely limited if it is available at all. In addition, the Debtors’ ability to consummate the Plan is 

dependent on their ability to satisfy the conditions precedent to the Exit Facility Lenders’ funding under 

the Exit Financing. The Debtors can provide no assurance that such conditions will be satisfied. The 

Debtors’ long-term liquidity requirements and the adequacy of their capital resources are difficult to 

predict at this time. 

6. Oil and Natural Gas Prices Are Volatile, and Continued Low Oil or Natural 

Gas Prices Could Materially Adversely Affect the Debtors’ Businesses, 

Results of Operations, and Financial Condition 

The Debtors’ revenues, profitability and the value of the Debtors’ properties substantially depend 

on prevailing oil, natural gas, and NGL prices. Oil, natural gas, and NGLs are commodities, and 

therefore, their prices are subject to wide fluctuations in response to changes in supply and demand. Oil, 

natural gas, and NGL prices historically have been volatile and are likely to continue to be volatile in the 

future, especially given current economic and geopolitical conditions. During 2015, NYMEX-WTI14 oil 

prices fell from an already depressed $60 per Bbl to as low as $35 per Bbl, ultimately falling to below $27 

per Bbl in February 2016. Oil prices continue to hover at or near historical lows—priced at just $46 per 

Bbl as of close of markets on May 11, 2016. Over the same period, Henry Hub15 natural gas prices fell 

from as high as $3.70 per MMBtu to as low as $1.80 per MMBtu, with prices closing at $2.16 per 

MMBtu on May 11, 2016. In line with the overall market trend, prices of the various NGL components—

which form a portion of the Debtors’ operations and revenues—have fallen to historical lows. The 

Debtors expect such volatility to continue in the future. The prices for oil, natural gas, and NGLs are 

subject to a variety of factors beyond the Debtors’ control, such as:

• the current uncertainty in the global economy; 

• changes in global supply and demand for oil, natural gas, and NGLs; 

• the condition of the United States and global economies; 

• the actions of certain foreign countries; 

• the price and quantity of imports of foreign oil, natural gas, and 

NGLs; 

• political conditions, including embargoes, war or civil unrest in or 

affecting other oil producing activities of certain countries; 

 

14 West Texas Intermediate light sweet crude oil delivered to Cushing, Oklahoma and listed with the New York Mercantile 

Exchange. 

15 Natural gas delivered to the Henry Hub in Louisiana and listed on the New York Mercantile Exchange.

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• the level of global oil and natural gas exploration and production 

activity; 

• the level of global oil, natural gas, and NGLs inventories; 

• production or pricing decisions made by the Organization of 

Petroleum Exporting Countries (“OPEC”);

• weather conditions; 

• technological advances affecting energy consumption; and 

• the price and availability of alternative fuels. 

Oil, natural gas, and NGL prices affect the amount of cash flow available to the Debtors to meet 

their financial commitments and fund capital expenditures. Oil and natural gas prices also impact the 

Debtors’ ability to borrow money and raise additional capital. For example, the amount the Debtors will 

be able to borrow under the Exit Facility will be subject to periodic redeterminations based, in part, on 

then-current oil, natural gas, and NGL prices and on changing expectations of future prices. Lower oil, 

natural gas, and NGL prices may not only decrease the Debtors’ revenues on a per-unit basis, but also 

may reduce the amount of oil, natural gas, and NGLs that the Debtors can produce economically in the 

future. Higher operating costs associated with any of the Debtors’ oil or natural gas fields will make their

profitability more sensitive to oil, natural gas, or NGL price declines. A sustained decline in oil, natural 

gas, or NGL prices may materially and adversely affect the Debtors’ future business, financial condition, 

results of operations, liquidity or ability to finance planned capital expenditures. In addition, a sustained 

decline in oil, natural gas, or NGL prices might result in substantial downward estimates of the Debtors’

proved reserves. As a result, if there is a further decline or sustained depression in commodity prices, the 

Debtors may, among other things, be unable to maintain or increase their borrowing capacity, meet their 

debt obligations or other financial commitments, or obtain additional capital, all of which could materially 

adversely affect the Debtors’ businesses, results of operations, and financial condition.

7. Drilling for and Producing Natural Gas and Oil Are High Risk Activities 

with Many Uncertainties that Could Adversely Affect the Debtors’ Business, 

Financial Condition and Results of Operations

The Debtors’ future success will depend on, among other things, the success of their exploitation, 

exploration, development, and production activities. The Debtors’ oil and natural gas exploration and 

production activities are subject to numerous risks beyond their control, including the risk that drilling 

will not result in commercially viable oil or natural gas production. The Debtors’ decisions to purchase, 

explore, develop, or otherwise exploit prospects or properties will depend in part on the evaluation of data 

obtained through geophysical and geological analysis, production data and engineering studies, the results 

of which are often inconclusive or subject to varying interpretations. The Debtors’ costs of drilling, 

completing, and operating wells are often uncertain before drilling commences. Overruns in budgeted 

expenditures are common risks that can make a particular project uneconomical. Further, the Debtors’

future business, financial condition, results of operations, liquidity, or ability to finance planned capital 

expenditures could be materially and adversely affected by any factor that may curtail, delay, or cancel 

drilling, including the following: 

• delays imposed by or resulting from compliance with regulatory 

requirements; 

• unusual or unexpected geological formations; 

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• pressure or irregularities in geological formations; 

• shortages of or delays in obtaining equipment and qualified 

personnel; 

• equipment malfunctions, failures, or accidents; 

• unexpected operational events and drilling conditions; 

• pipe or cement failures; 

• casing collapses; 

• lost or damaged oilfield drilling and service tools; 

• loss of drilling fluid circulation; 

• uncontrollable flows of oil, natural gas, and fluids; 

• fires and natural disasters; 

• environmental hazards, such as natural gas leaks, oil spills, pipeline 

ruptures, and discharges of toxic gases; 

• adverse weather conditions; 

• reductions in oil, natural gas, and NGL prices; 

• natural gas and oil property title problems; and

• market limitations for oil, natural gas, and NGLs. 

If any of these factors were to occur with respect to a particular field, the Debtors could lose all or 

a part of their investment in the field, or they could fail to realize the expected benefits from the field, 

either of which could materially and adversely affect their revenue and profitability. 

8. The Debtors’ Business is Subject to Complex Laws and Regulations That 

Can Adversely Affect the Cost, Manner, or Feasibility of Doing Business

Exploration, development, production and sale of oil and gas are subject to extensive federal, 

state and local laws and regulations, including complex environmental laws. The Debtors may be 

required to make large expenditures to comply with environmental and other governmental regulations. 

Failure to comply with these laws and regulations may result in the suspension or termination of 

operations and subject the Debtors to administrative, civil and criminal penalties. Matters subject to 

regulation include discharge permits for drilling operations, drilling bonds, spacing of wells, unitization 

and pooling of properties, environmental protection (including laws restricting the emission of 

greenhouse gases and laws regarding the protection of certain species of wildlife or their habitats) and 

taxation. Additionally, in recent years, the practice of hydraulic fracturing has come under increased 

scrutiny by the environmental community. The Debtors’ operations create the risk of environmental 

liabilities to the government or third parties for any unlawful discharge of oil, gas or other pollutants into 

the air, soil or water. In the event of environmental violations, the Reorganized Debtors may be charged 

with remedial costs and land owners may file claims for alternative water supplies, property damage or 

bodily injury. Laws and regulations protecting the environment have become more stringent in recent 

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years, and may, in some circumstances, result in liability for environmental damage regardless of 

negligence or fault. In addition, pollution and similar environmental risks generally are not fully 

insurable. These liabilities and costs could have a material adverse effect on the business, financial 

condition, results of operations and cash flows of the Reorganized Debtors. 

9. The Debtors’ Operations Depend, in Part, on the Pricing and Availability of 

Midstream Services and Access to Water

“Midstream” services include oil and natural gas gathering—i.e., intricate pipelines that transport 

and combine extracted hydrocarbons from the various upstream wellheads to larger transportation 

pipelines—and transportation services. The Debtors frequently enter into long-term agreements with 

midstream providers for these services. Such midstream services agreements frequently include 

protections in favor of the midstream service provider—including acreage dedication and minimum 

volume throughput provisions—that have the effect of locking the Debtors into certain long-term pricing 

for midstream services and, in the case of minimum throughput obligations, potentially paying for 

services the Debtors cannot use. As they do not participate in the midstream sector in any meaningful 

way, the Debtors must contract with third parties for the provision of midstream services. In light of 

current, historically low oil, natural gas, and NGL prices, as described in Article VIII.C.6 of this 

Disclosure Statement, entitled “Oil and Natural Gas Prices Are Volatile, and Continued Low Oil or 

Natural Gas Prices Could Materially Adversely Affect the Debtors’ Businesses, Results of Operations, 

and Financial Condition,” which begins on page 43, the pricing contained in the Debtors’ midstream 

services agreements is, in some instances, well above market. Failure to negotiate for improved economic 

terms could have a material, adverse effect on the Debtors’ businesses. Moreover, any attempt to reject 

certain of the Debtors’ midstream services agreements in the Chapter 11 Cases could lead to costly, 

protracted litigation with the midstream services provider.

The Debtors’ operations also rely on the availability of water, which is crucial to conducting 

hydraulic fracturing. A significant amount of water is necessary for drilling and completing each well 

with hydraulic fracturing in the Eagle Ford. In the past, the Eagle Ford has experienced severe droughts 

that have limited the water supplies that are necessary to conduct hydraulic fracturing. Although the 

Debtors have taken measures to secure their water supply, the Debtors can make no assurances that 

sufficient water resources will be available in the short or long term to carry out future activity.

10. Commodity Prices and Hedging May Present Additional Risks

The Debtors may not be able to enter into new commodity derivatives covering additional 

estimated future production on favorable terms or at all. If the Debtors cannot or choose not to enter into 

commodity derivatives in the future, the Debtors could be more affected by changes in commodity prices 

than their competitors that engage in hedging arrangements. The Debtors’ inability to hedge the risk of 

low commodity prices in the future, on favorable terms or at all, could have a material adverse impact on 

their businesses, financial condition, and results of operations. 

If the Debtors are able to enter into any commodity derivatives, such derivatives may limit the 

benefit the Debtors would receive from increases in commodity prices. These arrangements would also 

expose the Debtors to the risk of financial losses in some circumstances, including the following: (a) the 

Debtors’ production could be materially less than expected; or (b) the counterparties to the contracts 

could fail to perform their contractual obligations. 

If the Debtors’ actual production and sales for any period are less than the production covered by 

any commodity derivatives (including reduced production due to operational delays) or if the Debtors are 

unable to perform their exploration and development activities as planned, the Debtors might be required 

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to satisfy a portion of their obligations under those commodity derivatives without the benefit of the cash 

flow from the sale of that production, which may materially impact the Debtors’ liquidity. Additionally, 

if market prices for production exceed collar ceilings or swap prices, the Debtors would be required to 

make monthly cash payments, which could materially adversely affect their liquidity.

11. The Reorganized Debtors May Be Adversely Affected by Potential 

Litigation, Including Litigation Arising Out of the Chapter 11 Cases 

In the future, the Reorganized Debtors may become parties to litigation. In general, litigation can 

be expensive and time consuming to bring or defend against. Such litigation could result in settlements or 

damages that could significantly affect the Reorganized Debtors’ financial results. It is also possible that 

certain parties will commence litigation with respect to the treatment of their Claims under the Plan. It is 

not possible to predict the potential litigation that the Reorganized Debtors may become party to, nor the 

final resolution of such litigation. The impact of any such litigation on the Reorganized Debtors’ 

businesses and financial stability, however, could be material.

12. The Loss of Key Personnel Could Adversely Affect the Debtors’ Operations

The Debtors’ operations are dependent on a relatively small group of key management personnel, 

including the Debtors’ executive officers. The Debtors’ recent liquidity issues and the Chapter 11 Cases 

have created distractions and uncertainty for key management personnel and employees. As a result, the 

Debtors have experienced and may continue to experience increased levels of employee attrition. 

Because competition for experienced personnel in the oil and gas industry can be significant, the Debtors 

may be unable to find acceptable replacements with comparable skills and experience and the loss of such 

key management personnel could adversely affect the Debtors’ ability to operate their businesses. In 

addition, a loss of key personnel or material erosion of employee morale at the corporate and/or field 

levels could have a material adverse effect on the Debtors’ ability to meet customer and counterparty 

expectations, thereby adversely affecting the Debtors’ businesses and the results of operations.

13. Certain Claims May Not Be Discharged and Could Have a Material Adverse 

Effect on the Debtors’ Financial Condition and Results of Operations

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a 

debtor from substantially all debts arising prior to confirmation. With few exceptions, all Claims that 

arise prior to the Debtors’ filing of their Petitions or before confirmation of the plan of reorganization 

(a) would be subject to compromise and/or treatment under the plan of reorganization and/or (b) would be 

discharged in accordance with the terms of the plan of reorganization. Any Claims not ultimately 

discharged through a plan of reorganization could be asserted against the reorganized entity and may have 

an adverse effect on the Reorganized Debtors’ financial condition and results of operations. 

IX. SOLICITATION AND VOTING PROCEDURES

This Disclosure Statement, which is accompanied by a Ballot or Ballots to be used for voting on 

the Plan, is being distributed to the holders of Claims in those Classes that are entitled to vote to accept or 

reject the Plan. The procedures and instructions for voting and related deadlines are set forth in the 

exhibits annexed to the Disclosure Statement Order, which is attached hereto as Exhibit D. 

The Disclosure Statement Order is incorporated herein by reference and should be read in 

conjunction with this Disclosure Statement in formulating a decision to vote to accept or reject the 

Plan.

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THE DISCUSSION OF THE SOLICITATION AND VOTING PROCESS SET FORTH IN 

THIS DISCLOSURE STATEMENT IS ONLY A SUMMARY. 

PLEASE REFER TO THE DISCLOSURE STATEMENT ORDER ATTACHED HERETO FOR A 

MORE COMPREHENSIVE DESCRIPTION OF THE SOLICITATION AND VOTING PROCESS.

A. Holders of Claims Entitled to Vote on the Plan 

Under the provisions of the Bankruptcy Code, not all holders of claims against a debtor are 

entitled to vote on a chapter 11 plan. The table in Article III.C of this Disclosure Statement, entitled “Am 

I entitled to vote on the Plan?” which begins on page 6, provides a summary of the status and voting 

rights of each Class (and, therefore, of each holder within such Class absent an objection to the holder’s 

Claim) under the Plan. 

As shown in the table, the Debtors are soliciting votes to accept or reject the Plan only from 

holders of Claims in Classes 5 and 6 (collectively, the “Voting Classes”). The holders of Claims in the 

Voting Classes are Impaired under the Plan and may, in certain circumstances, receive a distribution 

under the Plan. Accordingly, holders of Claims in the Voting Classes have the right to vote to accept or 

reject the Plan. 

The Debtors are not soliciting votes from holders of Claims and Interests in Classes 1, 2, 3, 4, 7, 

8, and 9. Additionally, the Disclosure Statement Order provides that certain holders of Claims in the 

Voting Classes, such as those holders whose Claims have been disallowed or are subject to a pending 

objection, are not entitled to vote to accept or reject the Plan.

B. Voting Record Date

The Voting Record Date is June 20, 2016. The Voting Record Date is the date on which it will 

be determined which holders of Claims in the Voting Classes are entitled to vote to accept or reject the 

Plan and whether Claims have been properly assigned or transferred under Bankruptcy Rule 3001(e) such 

that an assignee or transferee, as applicable, can vote to accept or reject the Plan as the holder of a Claim.

C. Voting on the Plan

The Voting Deadline is July 26, 2016, at 5:00 p.m. (prevailing Eastern Time). In order to be 

counted as votes to accept or reject the Plan, all ballots must be properly executed, completed, and 

delivered as directed, so that your ballot or the master ballot containing your vote is actually received by 

the Notice and Claims Agent on or before the Voting Deadline. Ballots or master ballots returned by 

facsimile will not be counted. 

To vote, complete, sign, and date your ballot and return it (with an original signature) promptly in 

the enclosed reply envelope or to one of the below addresses. 

If sent by first-class mail

Penn Virginia Ballot Processing Center

c/o Epiq Bankruptcy Solutions, LLC

P.O. Box 4422

Beaverton, OR 97076-4422

If sent by personal delivery or overnight courier:

Penn Virginia Ballot Processing Center

c/o Epiq Bankruptcy Solutions, LLC

10300 SW Allen Blvd.

Beaverton, OR 97005

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PLEASE SELECT JUST ONE OPTION TO VOTE. 

EITHER RETURN THIS PAPER BALLOT WITH YOUR VOTE 

OR 

VOTE ELECTRONICALLY AS INSTRUCTED BELOW. 

To submit your ballot via the Solicitation Agent’s online portal, please visit 

https://dm.epiq11.com/PVA. Click on the “E-Ballot” section of the website and follow the instructions to 

submit your Ballot. Creditors who cast a ballot using the Solicitation Agent’s online portal should 

NOT also submit a paper Ballot.

If you are a noteholder and received an envelope addressed to your nominee, please return your 

ballot to your nominee, allowing enough time for your nominee to cast your vote on a master ballot 

before the Voting Deadline. 

IF YOU HAVE ANY QUESTIONS ABOUT THE SOLICITATION OR VOTING 

PROCESS, PLEASE CONTACT THE SOLICITATION AGENT AT +1 (646) 282-2500 (ASK FOR 

SOLICITATION GROUP) OR VIA ELECTRONIC MAIL TO TABULATION@EPIQSYSTEMS.COM 

(REFERENCE “PENN VIRGINIA” IN THE SUBJECT LINE).

D. Ballots Not Counted

No ballot will be counted toward Confirmation if, among other things: (1) it is illegible or 

contains insufficient information to permit the identification of the holder of the Claim; (2) it was 

transmitted by facsimile or other means other than as specifically set forth in the ballots; (3) it was cast by 

an entity that is not entitled to vote on the Plan; (4) it was cast for a Claim listed in the Debtors’ schedules 

as contingent, unliquidated, or disputed for which the applicable Bar Date has passed and no proof of 

claim was timely filed; (5) it was cast for a Claim that is subject to an objection pending as of the Voting 

Record Date (unless temporarily allowed in accordance with the Disclosure Statement Order); (6) it was 

sent to the Debtors, the Debtors’ agents/representatives (other than the Notice and Claims Agent), an the 

Indenture Trustee, or the Debtors’ financial or legal advisors instead of the Notice and Claims Agent; 

(7) it is unsigned; or (8) it is not clearly marked to either accept or reject the Plan or it is marked both to 

accept and reject the Plan. Please refer to the Disclosure Statement Order for additional 

requirements with respect to voting to accept or reject the Plan.

ANY BALLOT RECEIVED AFTER THE VOTING DEADLINE OR THAT IS 

OTHERWISE NOT IN COMPLIANCE WITH THE DISCLOSURE STATEMENT ORDER 

WILL NOT BE COUNTED.

X. RIGHTS OFFERING PROCEDURES16

The procedures and instructions for exercising Subscription Rights are set forth in the Rights 

Offering Procedures, which are attached hereto as Exhibit E. The Rights Offering Procedures are 

incorporated herein by reference and should be read in conjunction with this Disclosure Statement in 

formulating a decision to exercise Subscription Rights. The discussion of the Rights Offering 

Procedures set forth in this Disclosure Statement is only a summary. Please refer to the Rights 

Offering Procedures attached hereto for a more comprehensive description.

 

16 Capitalized terms used in this Article X but not otherwise defined in this Disclosure Statement or the Plan shall have the 

meanings ascribed to them in the Subscription Agreement.

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IN ORDER TO PARTICIPATE IN THE RIGHTS OFFERING, A HOLDER OF AN 

ALLOWED NOTE CLAIM MUST BE AN ACCREDITED INVESTOR AND MUST TIMELY 

AND VALIDLY COMPLETE AND RETURN THE ACCREDITED INVESTOR COVER

LETTER CONFIRMING THAT IT IS AN ACCREDITED INVESTOR WITH THE 

SUBSCRIPTION FORM, AS PROVIDED FOR IN THE COVER LETTER OF THE DEBTORS

TO HOLDERS OF ALLOWED NOTE CLAIMS. 

Pursuant to the Plan, each Eligible Holder will receive Subscription Rights to subscribe for its pro 

rata Rights Offering Shares, provided that it timely and properly executes and delivers its Beneficial 

Holder Subscription Form (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as 

applicable) to the Subscription Agent or its Nominee, as applicable in advance of the Subscription 

Expiration Deadline. Each Nominee will receive a Master Subscription Form which it shall use to 

summarize the Subscription Rights exercised by each Eligible Holder that timely returns a properly filled 

out Beneficial Holder Subscription Form to such Nominee. Please note that all Beneficial Holder 

Subscription Forms (with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable) 

must be returned to the applicable Nominee in sufficient time to allow such Nominee to process and 

deliver the Master Subscription Form and copies of all Beneficial Holder Subscription Forms (and 

accompanying IRS Forms) prior to the Subscription Expiration Deadline. 

No Eligible Holder shall be entitled to participate in the Rights Offering unless the aggregate 

Purchase Price (as defined below) for the Rights Offering Shares it subscribes for is received by the 

Subscription Agent (i) in the case of an Eligible Holder that is not a Backstop Party, by the Subscription 

Expiration Deadline, and (ii) in the case of an Eligible Holder that is a Backstop Party, on the second 

(2nd) Business Day following receipt of a written notice (a “Funding Notice”) delivered by the Debtors to

the Backstop Parties in accordance with Section 2.4 of the Backstop Commitment Agreement 

(the “Backstop Funding Deadline”). No interest is payable on any advanced funding of the Purchase 

Price. If the Rights Offering is terminated for any reason, the Purchase Price will be returned to the 

Eligible Holder promptly. No interest will be paid on any returned Purchase Price. Any Eligible Holder 

submitting payment via its Nominee must coordinate such payment with its Nominee in sufficient time to 

allow the Nominee to forward such payment to the Subscription Agent by the Subscription Expiration 

Deadline or the Backstop Funding Deadline, as applicable.

IN ORDER TO PARTICIPATE IN THE RIGHTS OFFERING, EACH ELIGIBLE 

HOLDER MUST COMPLETE ALL THE STEPS OUTLINED IN THE RIGHTS OFFERING 

PROCEDURES. IF ALL OF THE STEPS OUTLINED IN THE RIGHTS OFFERING 

PROCEDURES ARE NOT COMPLETED BY THE SUBSCRIPTION EXPIRATION DEADLINE

OR THE BACKSTOP FUNDING DEADLINE, AS APPLICABLE. IF THE ELIGIBLE HOLDER 

FAILS TO DO SO, IT SHALL BE DEEMED TO HAVE FOREVER AND IRREVOCABLY 

RELINQUISHED AND WAIVED ITS RIGHT TO PARTICIPATE IN THE RIGHTS 

OFFERING. 

In order to validly exercise its Subscription Rights, each Eligible Holder that is not a Backstop 

Party must:

(a) return a duly executed Subscription Agreement along with a duly 

completed and executed Beneficial Holder Subscription Form (with 

accompanying IRS Form W-9 or appropriate IRS Form W-8, as 

applicable) to the Subscription Agent or its Nominee, as applicable, so 

that such documents are actually received by the Subscription Agent by 

the Subscription Expiration Deadline; and 

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(b) at the same time it returns its Subscription Agreement and Beneficial 

Holder Subscription Form to the Subscription Agent or its Nominee, as 

applicable, but in no event later than the Subscription Expiration 

Deadline, pay, or arrange for the payment by its Nominee of, the 

applicable Purchase Price to the Subscription Agent by wire transfer 

ONLY of immediately available funds in accordance with the 

instructions included in Item 4 of the Beneficial Holder Subscription 

Form. 

In order to validly exercise its Subscription Rights, each Eligible Holder that is a Backstop Party 

must:

(a) return a duly executed Subscription Agreement along with a duly 

completed and executed Beneficial Holder Subscription Form (with 

accompanying IRS Form W-9 or appropriate IRS Form W-8, as 

applicable) to the Subscription Agent or its Nominee, as applicable, so 

that such documents are actually received by the Subscription Agent by 

the Subscription Expiration Deadline; and 

(b) no later than the Backstop Funding Deadline, pay the applicable 

Purchase Price to the Subscription Agent by wire transfer ONLY of 

immediately available funds in accordance with the instructions included 

in Item 4 of the Beneficial Holder Subscription Form. 

ALL BACKSTOP PARTIES MUST PAY THEIR APPLICABLE PURCHASE PRICE 

DIRECTLY TO THE SUBSCRIPTION AGENT AND SHOULD NOT PAY THEIR NOMINEES, 

IF ANY.

With respect to the requirements above, for those Eligible Holders that hold Allowed Note 

Claims through a Nominee, such Eligible Holders must duly complete, execute and return their Beneficial 

Holder Subscription Forms in accordance with the instructions in the Rights Offering Procedures to their

Nominees in sufficient time to allow their Nominees to process their instructions and deliver to the 

Subscription Agent the Master Subscription Form, their completed Beneficial Holder Subscription Form 

(with accompanying IRS Form W-9 or appropriate IRS Form W-8, as applicable), Subscription 

Agreement, and, solely with respect to the Eligible Holders that are not Backstop Parties, payment of the 

applicable Purchase Price, payable for the Rights Offering Shares elected to be purchased by such 

Eligible Holder, by the Subscription Expiration Deadline. 

Any Eligible Holder that does not hold an Allowed Note Claim through a Nominee must deliver 

their completed Beneficial Holder Subscription Form (with accompanying IRS Form W-9 or appropriate 

IRS Form W-8, as applicable), Subscription Agreement and payment of the applicable Purchase Price 

payable for the Rights Offering Shares elected to be purchased by such Eligible Holder (with respect to 

the Eligible Holders that are not Backstop Parties) directly to the Subscription Agent on or before the 

Subscription Expiration Deadline. In all cases, Eligible Holders that are Backstop Parties must deliver 

their payment of the applicable Purchase Price payable for the Rights Offering Shares elected to be 

purchased by such Eligible Holder directly to the Subscription Agent no later than the Backstop Funding 

Deadline.

In the event that the funds received by the Subscription Agent from any Eligible Holder do not 

correspond to the Purchase Price payable for the Rights Offering Shares elected to be purchased by such 

Eligible Holder, the number of the Rights Offering Shares deemed to be purchased by such Eligible 

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Holder will be the lesser of (i) the number of the Rights Offering Shares elected to be purchased by such 

Eligible Holder and (ii) a number of the Rights Offering Shares determined by dividing the amount of the

funds received by the Purchase Price. 

The cash paid to the Subscription Agent in accordance with the Rights Offering Procedures will 

be deposited and held by the Subscription Agent in a segregated account until administered in connection 

with the settlement of the Rights Offering on the Effective Date. The Subscription Agent may not use 

such cash for any other purpose prior to the Effective Date and may not encumber or permit such cash to 

be encumbered with any lien or similar encumbrance. The cash held by the Subscription Agent pursuant 

to the Rights Offering Procedures shall not be deemed part of the Debtors’ bankruptcy estates. 

XI. CONFIRMATION OF THE PLAN

A. Requirements for Confirmation of the Plan

Among the requirements for Confirmation of the Plan pursuant to section 1129 of the Bankruptcy 

Code are: (1) the Plan is accepted by all Impaired Classes of Claims or Interests, or if rejected by an 

Impaired Class, the Plan “does not discriminate unfairly” and is “fair and equitable” as to the rejecting 

Impaired Class; (2) the Plan is feasible; and (3) the Plan is in the “best interests” of holders of Claims and 

Interests. 

At the Confirmation Hearing, the Bankruptcy Court will determine whether the Plan satisfies all 

of the requirements of section 1129 of the Bankruptcy Code. The Debtors believe that: (1) the Plan 

satisfies, or will satisfy, all of the necessary statutory requirements of chapter 11; (2) the Debtors have 

complied, or will have complied, with all of the necessary requirements of chapter 11; and (3) the Plan 

has been proposed in good faith. 

B. Best Interests of Creditors/Liquidation Analysis

Often called the “best interests” test, section 1129(a)(7) of the Bankruptcy Code requires that a 

bankruptcy court find, as a condition to confirmation, that a chapter 11 plan provides, with respect to each 

impaired class, that each holder of a claim or an equity interest in such impaired class either (1) has 

accepted the plan or (2) will receive or retain under the plan property of a value that is not less than the 

amount that the non-accepting holder would receive or retain if the debtors liquidated under chapter 7. 

Attached hereto as Exhibit F and incorporated herein by reference is a liquidation analysis 

(the “Liquidation Analysis”) prepared by the Debtors with the assistance of the Debtors’ advisors. As 

reflected in the Liquidation Analysis, the Debtors believe that liquidation of the Debtors’ businesses

under chapter 7 of the Bankruptcy Code would result in substantial diminution in the value to be realized 

by holders of Claims as compared to distributions contemplated under the Plan. Consequently, the 

Debtors and their management believe that Confirmation of the Plan will provide a substantially greater 

return to holders of Claims than would a liquidation under chapter 7 of the Bankruptcy Code. 

If the Plan is not confirmed, and the Debtors fail to propose and confirm an alternative plan of 

reorganization, the Debtors’ businesses may be liquidated pursuant to the provisions of a chapter 11 

liquidating plan. In liquidations under chapter 11, the Debtors’ assets could be sold in an orderly fashion 

over a more extended period of time than in a liquidation under chapter 7. Thus, a chapter 11 liquidation 

may result in larger recoveries than a chapter 7 liquidation, but the delay in distributions could result in 

lower present values received and higher administrative costs. Any distribution to holders of Claims 

under a chapter 11 liquidation plan would most likely be substantially delayed. Most importantly, the 

Debtors believe that any distributions to creditors in a chapter 11 liquidation scenario would fail to 

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capture the significant going concern value of their businesses, which is reflected in the New Common 

Stock to be distributed under the Plan. Accordingly, the Debtors believe that a chapter 11 liquidation 

would not result in distributions as favorable as those under the Plan.

C. Feasibility

Section 1129(a)(11) of the Bankruptcy Code requires that confirmation of a plan of 

reorganization is not likely to be followed by the liquidation, or the need for further financial 

reorganization of the debtor, or any successor to the debtor (unless such liquidation or reorganization is 

proposed in such plan of reorganization). 

To determine whether the Plan meets this feasibility requirement, the Debtors, with the assistance 

of Jefferies, have analyzed their ability to meet their respective obligations under the Plan. As part of this 

analysis, the Debtors have prepared a projected consolidated income statement, which includes the 

following: (a) the Debtors’ consolidated financial statement information for the fiscal year ended 

December 31, 2015 and (b) consolidated, projected, unaudited, financial statement information of the 

Reorganized Debtors (collectively, the “Financial Projections”) for the period beginning 2016 and 

continuing through 2018. The Financial Projections are based on an assumed Effective Date of [●], 2016 

and certain assumptions regarding the Debtors’ ability to obtain Exit Financing. To the extent that the 

Effective Date occurs before or after [●], 2016, recoveries on account of Allowed Claims could be 

impacted. Creditors and other interested parties should review Article VIII of this Disclosure Statement, 

entitled “Risk Factors,” which begins on page 35, for a discussion of certain factors that may affect the 

future financial performance of the Reorganized Debtors.

The Financial Projections are attached hereto as Exhibit G and incorporated herein by reference. 

Based upon the Financial Projections, the Debtors believe that they will be a viable operation following 

the Chapter 11 Cases and that the Plan will meet the feasibility requirements of the Bankruptcy Code.

D. Acceptance by Impaired Classes

The Bankruptcy Code requires, as a condition to confirmation, except as described in the 

following section, that each class of claims or equity interests impaired under a plan, accept the plan. A 

class that is not “impaired” under a plan is deemed to have accepted the plan and, therefore, solicitation of 

acceptances with respect to such a class is not required.17 

Section 1126(c) of the Bankruptcy Code defines acceptance of a plan by a class of impaired 

claims as acceptance by holders of at least two-thirds in dollar amount and more than one-half in a 

number of allowed claims in that class, counting only those claims that have actually voted to accept or to 

reject the plan. Thus, a class of claims will have voted to accept the plan only if two-thirds in amount and 

a majority in number of the Allowed Claims in such class that vote on the Plan actually cast their ballots 

in favor of acceptance. 

 

17 A class of claims is “impaired” within the meaning of section 1124 of the Bankruptcy Code unless the plan (a) leaves 

unaltered the legal, equitable and contractual rights to which the claim or equity interest entitles the holder of such claim or 

equity interest or (b) cures any default, reinstates the original terms of such obligation, compensates the holder for certain 

damages or losses, as applicable, and does not otherwise alter the legal, equitable, or contractual rights to which such claim 

or equity interest entitles the holder of such claim or equity interest.

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E. Confirmation without Acceptance by All Impaired Classes

Section 1129(b) of the Bankruptcy Code allows a bankruptcy court to confirm a plan even if all 

impaired classes have not accepted it; provided, that the plan has been accepted by at least one impaired 

class. Pursuant to section 1129(b) of the Bankruptcy Code, notwithstanding an impaired class’s rejection 

or deemed rejection of the plan, the plan will be confirmed, at the plan proponent’s request, in a 

procedure commonly known as a “cramdown” so long as the plan does not “discriminate unfairly” and is 

“fair and equitable” with respect to each class of claims or equity interests that is impaired under, and has 

not accepted, the plan.

If any Impaired Class rejects the Plan, the Debtors reserve the right to seek to confirm the Plan 

utilizing the “cramdown” provision of section 1129(b) of the Bankruptcy Code. To the extent that any 

Impaired Class rejects the Plan or is deemed to have rejected the Plan, the Debtors may request 

Confirmation of the Plan, as it may be modified from time to time, under section 1129(b) of the 

Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke, or withdraw the Plan or 

any Plan Supplement document, including the right to amend or modify the Plan or any Plan Supplement 

document to satisfy the requirements of section 1129(b) of the Bankruptcy Code. 

1. No Unfair Discrimination

The “unfair discrimination” test applies to classes of claims or interests that are of equal priority 

and are receiving different treatment under a plan. The test does not require that the treatment be the 

same or equivalent, but that treatment be “fair.” In general, bankruptcy courts consider whether a plan 

discriminates unfairly in its treatment of classes of claims of equal rank (e.g., classes of the same legal 

character). Bankruptcy courts will take into account a number of factors in determining whether a plan 

discriminates unfairly. A plan could treat two classes of unsecured creditors differently without unfairly 

discriminating against either class. 

2. Fair and Equitable Test

The “fair and equitable” test applies to classes of different priority and status (e.g., secured versus 

unsecured) and includes the general requirement that no class of claims receive more than 100 percent of 

the amount of the allowed claims in the class. As to the dissenting class, the test sets different standards 

depending upon the type of claims or equity interests in the class. 

The Debtors submit that if the Debtors “cramdown” the Plan pursuant to section 1129(b) of the 

Bankruptcy Code, the Plan is structured so that it does not “discriminate unfairly” and satisfies the “fair 

and equitable” requirement. With respect to the unfair discrimination requirement, all Classes under the 

Plan are provided treatment that is substantially equivalent to the treatment that is provided to other 

Classes that have equal rank. With respect to the fair and equitable requirement, no Class under the Plan 

will receive more than 100 percent of the amount of Allowed Claims in that Class. The Debtors believe 

that the Plan and the treatment of all Classes of Claims and Interests under the Plan satisfy the foregoing 

requirements for nonconsensual Confirmation of the Plan. 

F. Valuation of the Debtors 

In conjunction with formulating the Plan and satisfying its obligations under section 1129 of the 

Bankruptcy Code, the Debtors determined that it was necessary to estimate the post-Confirmation going 

concern value of the Debtors. Accordingly, the Debtors, with the assistance of Jefferies, produced the

Valuation Analysis that is set forth in Exhibit H attached hereto and incorporated herein by reference. As 

set forth in the Valuation Analysis, the Debtors’ going concern value is substantially less than the

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aggregate amount of its funded-debt obligations. Accordingly, the Valuation Analysis further supports 

the Debtors conclusion that the treatment of Classes under the Plan is fair and equitable and otherwise 

satisfies the Bankruptcy Code’s requirements for confirmation. 

XII. CERTAIN SECURITIES LAW MATTERS

A. New Common Stock 

1. The Reorganized Debtors May Not Be Able to Generate Sufficient Cash to 

Service All of their Indebtedness

As discussed herein, the Plan provides for the Reorganized Debtors to distribute New Common 

Stock to holders of Note Claims and Allowed General Unsecured Claims. New Common Stock will also 

be distributed under the Management Incentive Plan after the Effective Date.

The Debtors believe that the class of New Common Stock will be “securities,” as defined in 

section 2(a)(1) of the Securities Act, section 101 of the Bankruptcy Code and any applicable state 

securities law (a “Blue Sky Law”). The Debtors further believe that the offer and sale of the New 

Common Stock pursuant to the Plan is, and subsequent transfers of the New Common Stock by the 

holders thereof that are not “underwriters” (as defined in section 2(a)(11) of the Securities Act and in the 

Bankruptcy Code) will be, exempt from federal and state securities registration requirements under 

various provisions of the Securities Act, the Bankruptcy Code, and any applicable state Blue Sky Law as 

described in more detail below. The New Common Stock underlying the Management Incentive Plan 

will be issued pursuant to a registration statement or another available exemption from registration under 

the Securities Act and other applicable law. 

1. Issuance and Resale of New Common Stock under the Plan

Private Placement Exemption

All shares of New Common Stock issued under the Plan will be issued without registration under 

the Securities Act or any similar federal, state, or local law in reliance upon either (a) section 1145 of the 

Bankruptcy Code or (b) section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. 

All shares of New Common Stock issued pursuant to the exemption from registration set forth in section 

4(a)(2) of the Securities Act or Regulation D promulgated thereunder will be considered “restricted 

securities” and may not be transferred except pursuant to an effective registration statement under the 

Securities Act or an available exemption therefrom. 

Persons who purchase the New Common Stock pursuant to the exemption from registration set 

forth in section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder will hold “restricted 

securities.” Resales of such restricted securities would not be exempted by section 1145 of the 

Bankruptcy Code from registration under the Securities Act or other applicable law. Holders of restricted 

securities would, however, be permitted to resell New Common Stock without registration if they are able 

to comply with the applicable provisions of Rule 144 or Rule 144A or any other registration exemption 

under the Securities Act, or if such securities are registered with the Securities and Exchange 

Commission. 

All shares of New Common Stock issued (a) to Holders of Allowed Note Claims and Holders of 

Allowed General Unsecured Claims on account of their Claims and (b) to any Backstop Parties as a 

backstop premium pursuant to the Backstop Commitment Agreement, will be issued without registration 

under the Securities Act or any similar federal, state, or local law in reliance on Section 1145(a) of the 

Bankruptcy Code. All shares of New Common Stock issued (x) to the Backstop Parties pursuant to the 

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Backstop Commitment Agreement in satisfaction of their obligations to purchase any unsubscribed shares 

in the Rights Offering and (y) to Holders of Allowed Note Claims in the Rights Offering upon exercise of 

their rights will be issued without registration under the Securities Act or any similar federal, state, or 

local law in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. 

Recipients of the New Common Stock are advised to consult with their own legal advisors as to 

the availability of any exemption from registration under the Securities Act and any applicable state Blue 

Sky Law.

Resale of New Common Stock; Definition of Underwriter 

Section 1145(b)(1) of the Bankruptcy Code defines an “underwriter” as one who, except with 

respect to “ordinary trading transactions” of an entity that is not an “issuer”: (a) purchases a claim 

against, interest in, or claim for an administrative expense in the case concerning, the debtor, if such 

purchase is with a view to distribution of any security received or to be received in exchange for such 

claim or interest; (b) offers to sell securities offered or sold under a plan for the holders of such securities; 

(c) offers to buy securities offered or sold under a plan from the holders of such securities, if such offer to 

buy is (i) with a view to distribution of such securities and (ii) under an agreement made in connection 

with the plan, with the consummation of the plan, or with the offer or sale of securities under the plan; or 

(d) is an issuer of the securities within the meaning of section 2(a)(11) of the Securities Act. In addition, 

a person who receives a fee in exchange for purchasing an issuer’s securities could also be considered an 

underwriter within the meaning of section 2(a)(11) of the Securities Act. 

The definition of an “issuer” for purposes of whether a person is an underwriter under section 

1145(b)(1)(D) of the Bankruptcy Code, by reference to section 2(a)(11) of the Securities Act, includes as 

“statutory underwriters” all persons who, directly or indirectly, through one or more intermediaries, 

control, are controlled by, or are under common control with, an issuer of securities. The reference to 

“issuer,” as used in the definition of “underwriter” contained in section 2(a)(11) of the Securities Act, is 

intended to cover “Controlling Persons” of the issuer of the securities. “Control,” as defined in Rule 405 

of the Securities Act, means the possession, directly or indirectly, of the power to direct or cause the 

direction of the management and policies of a Person, whether through the ownership of voting securities, 

by contract, or otherwise. Accordingly, an officer or director of a reorganized debtor or its successor 

under a plan of reorganization may be deemed to be a “Controlling Person” of the debtor or successor, 

particularly if the management position or directorship is coupled with ownership of a significant 

percentage of the reorganized debtor’s or its successor’s voting securities. In addition, the legislative 

history of section 1145 of the Bankruptcy Code suggests that a creditor who owns ten percent or more of 

a class of securities of a reorganized debtor may be presumed to be a “Controlling Person” and, therefore, 

an underwriter. 

Resales of the New Common Stock by entities deemed to be “underwriters” (which definition 

includes “Controlling Persons”) are not exempted by section 1145 of the Bankruptcy Code from 

registration under the Securities Act or other applicable law. Under certain circumstances, holders of 

New Common Stock who are deemed to be “underwriters” may be entitled to resell their New Common

Stock pursuant to the limited safe harbor resale provisions of Rule 144 of the Securities Act. Generally, 

Rule 144 of the Securities Act would permit the public sale of securities received by such Person if the 

required holding period has been met and, under certain circumstances, current information regarding the 

issuer is publicly available and volume limitations, manner of sale requirements and certain other 

conditions are met. Whether any particular Person would be deemed to be an “underwriter” (including 

whether the Person is a “Controlling Person”) with respect to the New Common Stock would depend 

upon various facts and circumstances applicable to that Person. Accordingly, the Debtors express no 

view as to whether any Person would be deemed an “underwriter” with respect to the New Common 

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Stock and, in turn, whether any Person may freely resell New Common Stock. The Debtors recommend 

that potential recipients of New Common Stock consult their own counsel concerning their ability to 

freely trade such securities without compliance with the federal law and any applicable state Blue Sky 

Law.

New Common Stock / Management Incentive Plan 

The percentage of New Common Stock to be set aside for the Management Incentive Plan shall 

be up to a percentage determined by the Debtors and the Backstop Parties prior to the Confirmation 

Hearing, which maximum percentage shall be disclosed either in the Plan Supplement or the 

Confirmation Order. The parameters, incentives, and eligible executives with respect to this Management 

Incentive Plan shall be determined by the compensation committee of the New Board, with input to be 

provided to the New Board designees by the Backstop Parties prior to the Effective Date. The 

Confirmation Order shall authorize the New Board to adopt and enter into the Management Incentive 

Plan, on the terms set forth in Section 4.16 of the Plan. The issuance of New Common Stock under the 

Management Incentive Plan would dilute all of the New Common Stock. 

B. The Rights Offering Shares and Commitment Premium

1. Issuance

Section 4(a)(2) of the Securities Act provides that the issuance of securities by an issuer in 

transactions not involving any public offering are exempt from registration under the Securities Act. 

Regulation D is a non-exclusive safe harbor from registration promulgated by the SEC under section 

4(a)(2) of the Securities Act. 

The Debtors believe that the Rights Offering Shares and any shares of New Common Stock 

issued as the Commitment Premium are issuable without registration under the Securities Act in reliance 

upon the exemption from registration provided under section 4(a)(2) of the Securities Act and/or 

Regulation D promulgated thereunder. These shares will be subject to resale restrictions and may be 

resold, exchanged, assigned or otherwise transferred only pursuant to registration, or an applicable 

exemption from registration, under the Securities Act and other applicable law, as described below. 

2. Subsequent Transfers 

Unlike the securities that will be issued pursuant to section 1145(a)(1) of the Bankruptcy Code, 

the Rights Offering Shares and any shares of New Common Stock issued as the Commitment Premium

will be deemed “restricted securities” that may not be offered, sold, exchanged, assigned or otherwise 

transferred unless they are registered under the Securities Act, or an exemption from registration under 

the Securities Act is available. 

The Rights Offering Shares and any shares of New Common Stock issued as the Commitment 

Premium will not initially be registered under the Securities Act. The Debtors do not plan to register the 

Rights Offering Shares held by persons other than the Backstop Parties. Thus, persons who receive Rights 

Offering Shares (other than the Backstop Parties) will not be permitted to offer, sell or otherwise transfer 

their Rights Offering Shares except pursuant to an available exemption from registration. 

All persons (other than Backstop Parties) who purchase Rights Offering Shares will be required 

to agree that they will not offer, sell or otherwise transfer any Rights Offering Shares except in 

accordance with the exemption from registration provided by Rule 144 under the Securities Act, if and 

when available. 

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Rule 144 provides an exemption for the public resale of “restricted securities” if certain 

conditions are met. These conditions vary depending on whether the holder of the restricted securities is 

an affiliate of the issue. An affiliate is defined as “a person that directly, or indirectly through one or 

more intermediaries, controls, or is controlled by, or is under common control with, the issuer.” 

A non-affiliate who has not been an affiliate of the issuer during the preceding three months may 

resell restricted securities after a six-month holding period if at the time of the sale there is available 

certain current public information regarding the issuer, and may sell the securities after a one-year holding 

period whether or not there is current public information regarding the issuer. Adequate current public 

information is available for a reporting issuer if the issuer has filed all periodic reports required under 

Section 13 or 15(d) of the Securities Exchange Act of 1934 during the twelve months preceding the sale 

of the restricted securities. If the issuer is a non-reporting issuer, adequate current public information is 

available if certain information about the issuer is made publicly available. The Debtors currently expect 

that the Reorganized Debtors will continue to be a reporting issuer and file all such required periodic 

reports and that current public information will be available to allow resales by non-affiliates when the 

six-month holding period expires (approximately six months after the emergence date).

An affiliate may resell restricted securities after the six-month holding period if at the time of the 

sale certain current public information regarding the issuer is available. As noted above, the Debtors 

currently expect that this information requirement will be satisfied. The affiliate must also comply with 

the volume, manner of sale and notice requirements of Rule 144. First, the rule limits the number of 

restricted securities (plus any unrestricted securities) sold for the account of an affiliate (and related 

persons) in any three-month period to the greater of 1% of the outstanding securities of the same class 

being sold, or, if the class is listed on a stock exchange, the greater of 1% of the average weekly reported 

volume of trading in such restricted securities during the four weeks preceding the filing of a notice of 

proposed sale on Form 144. Second, the manner of sale requirement provides that the restricted securities 

must be sold in a broker’s transaction, which generally means they must be sold through a broker and 

handled as a routine trading transaction. The broker must receive no more than the usual commission and 

cannot solicit orders for the sale of the restricted securities except in certain situations. Third, if the sale 

exceeds 5,000 restricted securities or has an aggregate sale price greater than $50,000, an affiliate must 

file with the SEC three copies of a notice of proposed sale on Form 144. The sale must occur within three 

months of filing the notice unless an amended notice is filed. 

The Debtors believe that the Rule 144 exemption will not be available with respect to any Rights 

Offering Shares (whether held by non-affiliates or affiliates) until at least six months after the Effective 

Date. Accordingly, holders of Rights Offering Shares will be required to hold their Rights Offering 

Shares for at least six months and, thereafter, to sell them only in accordance with the applicable 

requirements of Rule 144. 

All Rights Offering Shares will be issued in certificated or book-entry form and will bear a 

restrictive legend. Except with respect to the Backstop Parties, each certificate or book-entry representing, 

or issued in exchange for or upon the transfer, sale or assignment of, any Rights Offering Share shall be 

stamped or otherwise imprinted with a legend in substantially the following form: 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY 

ISSUED ON [ISSUANCE DATE], AND HAVE NOT BEEN AND WILL NOT BE REGISTERED 

UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR 

ANY OTHER APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR 

TRANSFERRED EXCEPT PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER 

THE ACT PROVIDED BY RULE 144 THEREUNDER, WHEN AVAILABLE.” 

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The Reorganized Debtors will reserve the right to require certification or other evidence of 

compliance with Rule 144 as a condition to the removal of such legend or to any resale of the Rights 

Offering Shares. The Reorganized Debtors will also reserve the right to stop the transfer of any Rights 

Offering Shares if such transfer is not in compliance with Rule 144. Any person who purchases Rights 

Offering Shares pursuant to the Rights Offering will be required to acknowledge and agree not to resell 

such securities except in accordance with Rule 144, when available, and that the securities will be subject 

to the other restrictions described above. 

Any persons receiving “restricted securities” under the Plan should consult with their own 

counsel concerning the availability of an exemption from registration for resale of these securities under 

the Securities Act and other applicable law. 

BECAUSE OF THE COMPLEX, SUBJECTIVE NATURE OF THE QUESTION OF 

WHETHER A PARTICULAR PERSON MAY BE AN UNDERWRITER OR AN AFFILIATE 

AND THE HIGHLY FACT-SPECIFIC NATURE OF THE AVAILABILITY OF EXEMPTIONS 

FROM REGISTRATION UNDER THE SECURITIES ACT, INCLUDING THE EXEMPTIONS 

AVAILABLE UNDER SECTION 1145 OF THE BANKRUPTCY CODE AND RULE 144 UNDER 

THE SECURITIES ACT, NONE OF THE DEBTORS OR THE REORGANIZED DEBTORS 

MAKE ANY REPRESENTATION CONCERNING THE ABILITY OF ANY PERSON TO 

DISPOSE OF THE SECURITIES TO BE DISTRIBUTED UNDER THE PLAN. THE DEBTORS 

RECOMMEND THAT POTENTIAL RECIPIENTS OF THE SECURITIES TO BE ISSUED 

UNDER THE PLAN CONSULT THEIR OWN COUNSEL CONCERNING WHETHER THEY 

MAY FREELY TRADE SUCH SECURITIES.

XIII. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE 

PLAN

A. Introduction

The following discussion summarizes certain United States (“U.S.”) federal income tax 

consequences of the implementation of the Plan to the Debtors, the Reorganized Debtors, and certain 

holders of Claims. This summary is based on the Internal Revenue Code of 1986, as amended (the 

“Tax Code”), the U.S. Treasury Regulations promulgated thereunder (the “Treasury Regulations”), 

judicial decisions and published administrative rules, and pronouncements of the Internal Revenue 

Service (the “IRS”), all as in effect on the date hereof (collectively, “Applicable Tax Law”). Changes in 

the rules or new interpretations of the rules may have retroactive effect and could significantly affect the 

U.S. federal income tax consequences described below. The Debtors have not requested, and will not 

request, any ruling or determination from the IRS or any other taxing authority with respect to the tax 

consequences discussed herein, and the discussion below is not binding upon the IRS or the courts. No 

assurance can be given that the IRS would not assert, or that a court would not sustain, a different position 

than any position discussed herein.

This summary does not address foreign, state, or local tax consequences of the Plan, nor does it 

purport to address all aspects of U.S. federal income taxation that may be relevant to a holder in light of 

its individual circumstances or to a holder that may be subject to special tax rules (such as Persons who 

are related to the Debtors within the meaning of the Tax Code, foreign taxpayers, broker-dealers, banks, 

mutual funds, insurance companies, financial institutions, small business investment companies, regulated 

investment companies, tax exempt organizations, pass-through entities, beneficial owners of pass-through 

entities, subchapter S corporations, persons who hold Claims or who will hold the New Common Stock as 

part of a straddle, hedge, conversion transaction, or other integrated investment, persons using a mark-tomarket method of accounting, and holders of Claims who are themselves in bankruptcy). Furthermore, 

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this summary assumes that a holder of a Claim holds only Claims in a single Class and holds a Claim 

only as a “capital asset” (within the meaning of section 1221 of the Tax Code). This summary also 

assumes that the various debt and other arrangements to which any of the Debtors are a party will be 

respected for U.S. federal income tax purposes in accordance with their form, and that the Claims 

constitute interests in the Debtors “solely as a creditor” for purposes of section 897 of the Tax Code. This 

summary does not discuss differences in tax consequences to holders of Claims that act or receive 

consideration in a capacity other than any other holder of a Claim of the same Class or Classes, and the 

tax consequences for such holders may differ materially from that described below. 

For purposes of this discussion, a “U.S. holder” is a holder of a Claim that is: (1) an individual 

citizen or resident of the United States for U.S. federal income tax purposes; (2) a corporation (or other 

entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws 

of the United States, any state thereof or the District of Columbia; (3) an estate the income of which is 

subject to U.S. federal income taxation regardless of the source of such income; or (4) a trust (A) if a 

court within the United States is able to exercise primary jurisdiction over the trust’s administration and 

one or more United States persons have authority to control all substantial decisions of the trust or 

(B) that has a valid election in effect under applicable Treasury Regulations to be treated as a United 

States person. For purposes of this discussion, a “non-U.S. holder” is any holder of a Claim that is not a 

U.S. holder other than any partnership (or other entity treated as a partnership or other pass-through entity 

for U.S. federal income tax purposes). 

If a partnership (or other entity treated as a partnership or other pass-through entity for U.S. 

federal income tax purposes) is a holder of a Claim, the tax treatment of a partner (or other beneficial 

owner) generally will depend upon the status of the partner (or other beneficial owner) and the activities 

of the entity. Partners (or other beneficial owners) of partnerships (or other pass-through entities) that are 

holders of Claims should consult their respective tax advisors regarding the U.S. federal income tax 

consequences of the Plan. 

ACCORDINGLY, THE FOLLOWING SUMMARY OF CERTAIN U.S. FEDERAL 

INCOME TAX CONSEQUENCES IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT 

A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE BASED UPON THE 

INDIVIDUAL CIRCUMSTANCES PERTAINING TO A HOLDER OF A CLAIM OR 

INTEREST. ALL HOLDERS OF CLAIMS OR INTERESTS ARE URGED TO CONSULT 

THEIR OWN TAX ADVISORS AS TO THE FEDERAL, STATE, LOCAL, AND NON-U.S. 

INCOME, ESTATE, AND OTHER TAX CONSEQUENCES OF THE PLAN.

B. Certain U.S. Federal Income Tax Consequences to the Debtors and the Reorganized 

Debtors

1. Cancellation of Debt and Reduction of Tax Attributes

In general, absent an exception, a debtor will realize and recognize cancellation of debt income 

(“COD Income”), for U.S. federal income tax purposes, upon satisfaction of its outstanding indebtedness 

for total consideration less than the amount of such indebtedness. The amount of COD Income, in 

general, is the excess of (a) the adjusted issue price of the indebtedness satisfied, over (b) the sum of 

(i) the amount of Cash paid, (ii) the issue price of any new indebtedness of the taxpayer issued, and (iii) 

the fair market value of any other new consideration (including stock of the debtor) given in satisfaction 

of such indebtedness at the time of the exchange.

Under section 108 of the Tax Code, a debtor is not required to include COD Income in gross 

income if the debtor is under the jurisdiction of a court in a case under chapter 11 of the Bankruptcy Code 

and the discharge of debt occurs pursuant to that proceeding. Instead, as a consequence of such 

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exclusion, a debtor must reduce its tax attributes by the amount of COD Income that it excluded from 

gross income pursuant to the rule discussed in the preceding sentence. In general, tax attributes will be 

reduced in the following order: (a) NOLs and NOL carryforwards; (b) general business credit carryovers; 

(c) minimum tax credit carryovers; (d) capital loss carryovers; (e) tax basis in assets; (f) passive activity 

loss and credit carryovers; and (g) foreign tax credit carryovers. Alternatively, a debtor with COD 

Income may elect first to reduce the basis of its depreciable assets pursuant to section 108(b)(5) of the 

Tax Code. The reduction in tax attributes occurs only after the tax for the year of the debt discharge has 

been determined. Any excess COD Income over the amount of available tax attributes is not subject to 

U.S. federal income tax and has no other U.S. federal income tax impact. 

The Treasury Regulations address the method and order for applying tax attribute reduction to an 

affiliated group of corporations. Under these Treasury Regulations, the tax attributes of each member of 

an affiliated group of corporations that is excluding COD Income is first subject to reduction. To the 

extent the debtor member’s tax basis in stock of a lower-tier member of the affiliated group is reduced, a 

“look through rule” requires that a corresponding reduction be made to the tax attributes of the lower-tier 

member. If a debtor member’s excluded COD Income exceeds its tax attributes, the excess COD Income 

is applied to reduce certain remaining consolidated tax attributes of the affiliated group. 

As a result of the Restructuring Transactions, the Debtors expect to realize significant COD 

Income, which will result in material reductions in NOLs, NOL carryforwards, and other tax attributes. 

2. Limitation of NOL Carryforwards and Other Tax Attributes

As of December 31, 2015, the Debtors had approximately $509.8 million of NOLs. Following 

the Effective Date, the Debtors anticipate that any NOL carryovers, capital loss carryovers, tax credit 

carryovers, and certain other tax attributes (such as losses and deductions that have accrued economically 

but are unrecognized as of the date of the ownership change) of the Reorganized Debtors allocable to 

periods before the Effective Date (collectively, the “Pre-Change Losses”) may be subject to limitation 

under sections 382 and 383 of the Tax Code as a result of an “ownership change” of the Reorganized 

Debtors by reason of the transactions consummated pursuant to the Plan. 

Under sections 382 and 383 of the Tax Code, if a corporation undergoes an “ownership change,” 

the amount of its Pre-Change Losses that may be utilized to offset future taxable income generally is 

subject to an annual limitation. The rules of section 382 of the Tax Code are complicated, but as a 

general matter, the Debtors anticipate that the distribution of the New Common Stock pursuant to the Plan 

will result in an “ownership change” of the Reorganized Debtors for these purposes, and that the 

Reorganized Debtors’ use of their Pre-Change Losses will be subject to limitation unless an exception to 

the general rules of section 382 of the Tax Code applies. 

For this purpose, if a corporation (or consolidated group) has a net unrealized built-in loss at the 

time of an ownership change (taking into account most assets and items of “built-in” income and 

deductions), then generally built-in losses (including amortization or depreciation deductions attributable 

to such built-in losses) recognized during the following five years (up to the amount of the original net 

unrealized built-in loss) will be treated as Pre-Change Losses and similarly will be subject to the annual 

limitation. In general, a corporation’s (or consolidated group’s) net unrealized built-in loss will be 

deemed to be zero unless it is greater than the lesser of (a) $10,000,000 or (b) 15 percent of the fair 

market value of its assets (with certain adjustments) before the ownership change. 

(a) General Section 382 Annual Limitation 

In general, the amount of the annual limitation to which a corporation that undergoes an 

“ownership change” would be subject is equal to the product of (a) the fair market value of the stock of 

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the corporation immediately before the “ownership change” (with certain adjustments) multiplied by 

(b) the “long-term tax-exempt rate” (which is the highest of the adjusted federal long-term rates in effect 

for any month in the 3-calendar-month period ending with the calendar month in which the “ownership 

change” occurs: 2.24 percent for May 2016). The section 382 Limitation may be increased to the extent 

that the Debtors recognize certain built-in gains in their assets during the five-year period following the 

ownership change, or are treated as recognizing built-in gains pursuant to the safe harbors provided in 

IRS Notice 2003-65. Section 383 of the Tax Code applies a similar limitation to capital loss 

carryforwards and tax credits. Any unused limitation may be carried forward, thereby increasing the 

annual limitation in the subsequent taxable year. As discussed below, however, special rules may apply 

in the case of a corporation that experiences an ownership change as the result of a bankruptcy 

proceeding. 

(b) Special Bankruptcy Exceptions

An exception to the foregoing annual limitation rules generally applies when so-called “qualified 

creditors” of a debtor corporation in chapter 11 receive, in respect of their Claims, at least 50 percent of 

the vote and value of the stock of the reorganized debtor (or a controlling corporation if also in 

chapter 11) pursuant to a confirmed chapter 11 plan (the “382(l)(5) Exception”). Under the 

382(l)(5) Exception, a debtor’s Pre-Change Losses are not limited on an annual basis, but, instead, NOL 

carryforwards will be reduced by the amount of any interest deductions claimed during the three taxable 

years preceding the effective date of the plan of reorganization, and during the part of the taxable year 

prior to and including the effective date of the plan of reorganization, in respect of all debt converted into 

stock in the reorganization. If the 382(l)(5) Exception applies and the Reorganized Debtors undergo 

another “ownership change” within two years after the Effective Date, then the Reorganized Debtors’ 

Pre-Change Losses effectively would be eliminated in their entirety. 

Where the 382(l)(5) Exception is not applicable to a corporation in bankruptcy (either because the 

debtor does not qualify for it or the debtor otherwise elects not to utilize the 382(l)(5) Exception), a 

second special rule will generally apply (the “382(l)(6) Exception”). Under the 382(l)(6) Exception, the 

annual limitation will be calculated by reference to the lesser of the value of the debtor corporation’s new 

stock (with certain adjustments) immediately after the ownership change or the value of such debtor 

corporation’s assets (determined without regard to liabilities) immediately before the ownership change. 

This differs from the ordinary rule that requires the fair market value of a debtor corporation that 

undergoes an “ownership change” to be determined before the events giving rise to the change. The 

382(l)(6) Exception also differs from the 382(l)(5) Exception in that under it the debtor corporation is not 

required to reduce its NOL carryforwards by the amount of interest deductions claimed within the prior 

three-year period, and the debtor may undergo an ownership change within two years without triggering 

the elimination of its Pre-Change Losses. 

The Debtors have not yet determined whether that the Restructuring Transactions will qualify for 

the 382(l)(5) Exception, but even if the Restructuring Transactions qualify for the 382(l)(5) Exception, the 

Debtors or the Reorganized Debtors may decide to elect out of the 382(l)(5) Exception, particularly if it 

appears likely that another ownership change will occur within two years after emergence. Regardless of 

whether the Reorganized Debtors take advantage of the 382(l)(6) Exception or the 382(l)(5) Exception, 

the Reorganized Debtors’ use of their Pre-Change Losses after the Effective Date may be adversely 

affected if an “ownership change” within the meaning of section 382 of the Tax Code were to occur after 

the Effective Date.

3. Alternative Minimum Tax

In general, an alternative minimum tax (“AMT”) is imposed on a corporation’s alternative 

minimum taxable income (“AMTI”) at a 20 percent rate to the extent such tax exceeds the corporation’s 

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regular federal income tax for the year. AMTI is generally equal to regular taxable income with certain 

adjustments. For purposes of computing AMTI, certain tax deductions and other beneficial allowances 

are modified or eliminated. For example, except for alternative tax NOLs generated in certain years, 

which can offset 100 percent of a corporation’s AMTI, only 90 percent of a corporation’s AMTI may be 

offset by available alternative tax NOL carryforwards. The effect of this rule could cause the 

Reorganized Debtors to owe some federal income tax on taxable income in future years even if NOL 

carryforwards are available to offset that taxable income. Additionally, under section 56(g)(4)(G) of the 

Tax Code, an ownership change (as discussed above) that occurs with respect to a corporation having a 

net unrealized built-in loss in its assets will cause, for AMT purposes, the adjusted basis of each asset of 

the corporation immediately after the ownership change to be equal to its proportionate share (determined 

on the basis of respective fair market values) of the fair market value of the assets of the corporation, as 

determined under section 382(h) of the Tax Code, immediately before the ownership change, the effect of 

which may increase the amount of AMT owed by the Reorganized Debtors. 

C. Certain U.S. Federal Income Tax Consequences to Certain U.S. Holders of Claims 

The following discussion assumes that the Debtors will undertake the Restructuring Transactions 

currently contemplated by the Plan. Holders of Claims and Interests are urged to consult their tax 

advisors regarding the tax consequences of the Restructuring Transactions.

1. U.S. Federal Income Tax Consequences to U.S. Holders of Allowed Note 

Claims and Allowed General Unsecured Claims

Pursuant to the Plan, except to the extent that a U.S. holder of an Allowed Note Claim or Allowed 

General Unsecured Claim agrees to a less favorable treatment in exchange for full and final satisfaction, 

settlement, release and discharge of the Note Claims or General Unsecured Claims, respectively, the U.S. 

holder of such Claims shall receive a Pro Rata distribution of the New Common Stock Equity Pool and, 

with respect to the U.S. holder of an Allowed Note Claim only, the right to purchase its Pro Rata Share of 

the Rights Offerings Shares. 

Whether and the extent to which the U.S. holder of a Note Claim or General Unsecured Claim 

recognizes gain or loss as a result of the exchange of its claim for the New Common Stock depends on 

whether the debt underlying the Note Claim or General Unsecured Claim surrendered is treated as a 

“security” for purposes of the reorganization provisions of the Tax Code, as further described below. 

(a) Treatment of a Debt Instrument as a “Security”

Where U.S. holder exchanges its Allowed Note Claim or Allowed General Unsecured Claim for 

New Common Stock, such exchange may qualify for tax-free treatment if the debt underlying the 

surrendered Claim is a security of Penn Virginia. Whether a debt instrument constitutes a “security” for 

U.S. federal income tax purposes is determined based on all the relevant facts and circumstances, but 

most authorities have held that the length of the term of a debt instrument is an important factor in 

determining whether such instrument is a security for U.S. federal income tax purposes. These authorities 

have indicated that a term of less than five years is evidence that the instrument is not a security, whereas 

a term of ten years or more is evidence that it is a security. There are numerous other factors that could 

be taken into account in determining whether a debt instrument is a security, including the security for 

payment, the creditworthiness of the obligor, the subordination or lack thereof to other creditors, the right 

to vote or otherwise participate in the management of the obligor, convertibility of the instrument into an 

equity interest of the obligor, whether payments of interest are fixed, variable, or contingent, and whether 

such payments are made on a current basis or accrued. Since the obligations underlying the Note Claims 

were issued by Penn Virginia and have terms of more than five years it is likely that such Note Claims 

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constitute securities of Penn Virginia for U.S. federal income tax purposes. In general, General Unsecured 

Claims are unlikely to be securities of Penn Virginia for U.S. federal income tax purposes.

(b) U.S. Holder Exchanges its Allowed Note Claim or Allowed General 

Unsecured Claim, which Claim is not a Security

If a U.S. holder’s Allowed Note Claim or Allowed General Unsecured Claim is not a security for 

U.S. federal income tax purposes, such U.S. holder will be treated as exchanging such Claim for New 

Common Stock, in a taxable exchange under section 1001 of the Tax Code. Accordingly, each U.S. 

holder of such Claim should recognize gain or loss equal to the difference between (1) the fair market 

value of New Common Stock received in exchange for the Claim; and (2) such U.S. holder’s adjusted 

basis, if any, in such Claim. The character of such gain or loss as capital gain or loss or as ordinary 

income or loss will be determined by a number of factors, including the tax status of the U.S. holder, the 

nature of the Claim in such U.S. holder’s hands, whether the Claim was purchased at a discount, and 

whether and to what extent the U.S. holder previously has claimed a bad debt deduction with respect to its 

Claim. The deductibility of capital losses is subject to certain limitations as discussed below. See

Articles XIII.C.2 and XIII.C.3 of this Disclosure Statement, entitled “Accrued Interest” and “Market 

Discount,” respectively, which begin on page 64. A U.S. holder’s tax basis in any New Common Stock

received should equal the fair market value of such New Common Stock as of the date such New 

Common Stock is distributed to the holder. A U.S. holder’s holding period for the New Common Stock

received should begin on the day following the Effective Date. 

(c) U.S. Holder Exchanges Its Allowed Note Claim, which Claim is a 

Security

If a U.S. holder’s Allowed Note Claim or Allowed General Unsecured Claim is treated as a 

security for U.S. federal income tax purposes, the exchange of such Claim for New Common Stock 

would be treated as an exchange of securities pursuant to a tax-free reorganization to which Reorganized 

Penn Virginia is treated as a party under the reorganization provisions of the Tax Code (a 

“Reorganization”) and a U.S. holder should not recognize loss with respect to the exchange and should 

not recognize gain (subject to “Accrued Interest,” as discussed in Article XIII.C.2 of this Disclosure 

Statement entitled “Accrued Interest,” which begins on page 64). Such U.S. holder’s total combined tax 

basis in its New Common Stock received should equal the U.S. holder’s tax basis in the Allowed Note 

Claim or Allowed General Unsecured Claim surrendered therefor increased by gain, if any, recognized by 

such U.S. holder in the transaction. Subject to Article XIII.C.2 of this Disclosure Statement, entitled 

“Accrued Interest,” which begins on page 64, a U.S. holder’s holding period for its interest in the New 

Common Stock should include the holding period for the Allowed Note Claim or Allowed General 

Unsecured Claim surrendered therefor. 

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING 

THE RECOGNITION OF GAIN OR LOSS, FOR FEDERAL INCOME TAX PURPOSES, ON 

THE SATISFACTION OF THEIR CLAIMS.

2. Accrued Interest 

To the extent that any amount received by a U.S. holder of a Claim is attributable to accrued but 

unpaid interest on the debt instruments constituting the surrendered Claim, the receipt of such amount 

should be taxable to the U.S. holder as ordinary interest income (to the extent not already taken into 

income by the U.S. holder). Conversely, a U.S. holder of a Claim may be able to recognize a deductible 

loss (or, possibly, a write off against a reserve for worthless debts) to the extent that any accrued interest 

previously was included in the U.S. holder’s gross income but was not paid in full by the Debtors. Such 

loss may be ordinary, but the tax law is unclear on this point. 

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If the fair value of the consideration is not sufficient to fully satisfy all principal and interest on 

Allowed Claims, the extent to which such consideration will be attributable to accrued interest is unclear. 

Under the Plan, the aggregate consideration to be distributed to holders of Allowed Claims in each Class 

will be allocated first to the principal amount of Allowed Claims, with any excess allocated to unpaid 

interest that accrued on these Claims, if any. Certain legislative history indicates that an allocation of 

consideration as between principal and interest provided in a chapter 11 plan of reorganization is binding 

for U.S. federal income tax purposes, while certain Treasury Regulations treat payments as allocated first 

to any accrued but unpaid interest. The IRS could take the position that the consideration received by the 

holder should be allocated in some way other than as provided in the Plan. U.S. Holders of Claims 

should consult their own tax advisors regarding the proper allocation of the consideration received by 

them under the Plan. 

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING 

THE ALLOCATION OF CONSIDERATION RECEIVED IN SATISFACTION OF THEIR 

CLAIMS AND THE FEDERAL INCOME TAX TREATMENT OF ACCRUED BUT UNPAID 

INTEREST.

3. Market Discount 

Under the “market discount” provisions of the Tax Code, some or all of any gain realized by a 

U.S. holder of a Claim who exchanges the Claim for an amount on the Effective Date may be treated as 

ordinary income (instead of capital gain), to the extent of the amount of “market discount” on the debt 

instruments constituting the exchanged Claim. In general, a debt instrument is considered to have been 

acquired with “market discount” if it is acquired other than on original issue and if its holder’s adjusted 

tax basis in the debt instrument is less than (a) the sum of all remaining payments to be made on the debt 

instrument, excluding “qualified stated interest” or (b) in the case of a debt instrument issued with 

original issue discount, its adjusted issue price, by at least a de minimis amount (equal to 0.25 percent of 

the sum of all remaining payments to be made on the debt instrument, excluding qualified stated interest, 

multiplied by the number of remaining whole years to maturity). 

Any gain recognized by a U.S. holder on the taxable disposition of a Claim that had been 

acquired with market discount should be treated as ordinary income to the extent of the market discount 

that accrued thereon while the Claim was considered to be held by the U.S. holder (unless the U.S. holder 

elected to include market discount in income as it accrued). To the extent that the Allowed Claims that 

were acquired with market discount are exchanged in a tax-free transaction for other property, any market 

discount that accrued on the Allowed Claims (i.e., up to the time of the exchange) but was not recognized 

by the U.S. holder is carried over to the property received therefor and any gain recognized on the 

subsequent sale, exchange, redemption, or other disposition of the property is treated as ordinary income 

to the extent of the accrued, but not recognized, market discount.

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING 

THE APPLICATION OF THE MARKET DISCOUNT RULES TO THEIR CLAIMS.

4. Limitation on Use of Capital Losses 

A U.S. holder of a Claim who recognizes capital losses as a result of the distributions under the 

Plan will be subject to limits on the use of such capital losses. For a non-corporate U.S. holder, capital 

losses may be used to offset any capital gains (without regard to holding periods), and also ordinary 

income to the extent of the lesser of (a) $3,000 ($1,500 for married individuals filing separate returns) or 

(b) the excess of the capital losses over the capital gains. A non-corporate U.S. holder may carry over 

unused capital losses and apply them against future capital gains and a portion of their ordinary income 

for an unlimited number of years. For corporate U.S. holders, capital losses may only be used to offset 

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capital gains. A corporate U.S. holder that has more capital losses than may be used in a tax year may 

carry back unused capital losses to the three years preceding the capital loss year or may carry over 

unused capital losses for the five years following the capital loss year.

5. Exercise of Rights

A U.S. holder of an Allowed Note Claim that elects not to exercise the Subscription Rights may 

be entitled to claim a (likely short-term capital) loss equal to the amount of tax basis allocated to the 

Subscription Rights, subject to any limitations on such U.S. holder’s ability to utilize capital losses. 

SUCH U.S. HOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX 

ADVISORS AS TO THE TAX CONSEQUENCES OF ELECTING NOT TO EXERCISE THE 

RIGHTS.

A U.S. holder that elects to exercise the Subscription Rights will be treated as purchasing, in 

exchange for its Subscription Rights and the amount of cash funded by the U.S. holder to exercise the 

Subscription Rights, the additional New Common Stock it is entitled to pursuant to the Subscription 

Rights. Such a purchase will generally be treated as the exercise of an option under general tax 

principles, and as such U.S. holder should not recognize income, gain, or loss for U.S. federal income tax 

purposes when it exercises the Subscription Rights. A U.S. holder’s aggregate tax basis in the New 

Common Stock will equal the sum of (i) the amount of Cash paid by the U.S. holder to exercise its 

Subscription Rights plus (ii) such U.S. holder’s tax basis in its Subscription Rights immediately before 

the option is exercised. A U.S. holder’s holding period for the New Common Stock received on the 

Effective Date pursuant to the exercise of the Subscription Rights should begin on the day following the 

Effective Date.

D. Certain U.S. Federal Income Tax Consequences to Certain Non-U.S. Holders of 

Claims

1. Consequences to Non-U.S. Holders of Allowed Note Claims and General 

Unsecured Claims

This following discussion includes only certain U.S. federal income tax consequences of the 

Restructuring Transactions to non-U.S. holders. The discussion does not include any non-U.S. tax 

considerations. The rules governing the U.S. federal income tax consequences to non-U.S. holders are 

complex. Each non-U.S. holders should consult its own tax advisor regarding the U.S. federal, state, and 

local and the foreign tax consequences of the consummation of the Plan to such non-U.S. holders and the 

ownership and disposition of the New Common Stock, as applicable. 

Whether a non-U.S. holder realizes gain or loss on the exchange and the amount of such gain or 

loss is determined in the same manner as set forth above in connection with U.S. holders. 

(a) Gain Recognition 

Any gain realized by a non-U.S. holder on the exchange of its Claim generally will not be subject 

to U.S. federal income taxation unless (i) the non-U.S. holder is an individual who was present in the 

United States for 183 days or more during the taxable year in which the Restructuring Transactions occur 

and certain other conditions are met or (ii) such gain is effectively connected with the conduct by such 

non-U.S. holder of a trade or business in the United States (and if an income tax treaty applies, such gain 

is attributable to a permanent establishment maintained by such non-U.S. holder in the United States). 

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If the first exception applies, to the extent that any gain is taxable and does not qualify for 

deferral pursuant to a Reorganization as described above, the non-U.S. holder generally will be subject to 

U.S. federal income tax at a rate of 30% (or at a reduced rate or exemption from tax under an applicable 

income tax treaty) on the amount by which such non-U.S. holder’s capital gains allocable to U.S. sources 

exceed capital losses allocable to U.S. sources during the taxable year of the exchange. If the second 

exception applies, the non-U.S. holder generally will be subject to U.S. federal income tax with respect to 

any gain realized on the exchange if such gain is effectively connected with the non-U.S. holder’s conduct 

of a trade or business in the United States in the same manner as a U.S. holder. In order to claim an 

exemption from withholding tax, such non-U.S. holder will be required to provide a properly executed 

IRS Form W-8ECI (or such successor form as the IRS designates). In addition, if such a non-U.S. holder 

is a corporation, it may be subject to a branch profits tax equal to 30% (or such lower rate provided by an 

applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain 

adjustments. 

(b) Accrued Interest

Payments to a non-U.S. holder that are attributable to accrued but untaxed interest generally will 

not be subject to U.S. federal income or withholding tax, provided that the withholding agent has received 

or receives, prior to payment, appropriate documentation (generally, IRS Form W-8BEN or W-8BEN-E) 

establishing that the non-U.S. holder is not a U.S. person, unless: 

(i) the non-U.S. holder actually or constructively owns 10% or more 

of the total combined voting power of all classes of Penn 

Virginia’s stock entitled to vote;

(ii) the non-U.S. holder is a “controlled foreign corporation” that is a 

“related person” with respect to Penn Virginia (each, within the 

meaning of the Tax Code);

(iii) the non-U.S. holder is not a bank receiving interest described in 

Section 881(c)(3)(A) of the Tax Code; or 

(iv) such interest is effectively connected with the conduct by the 

non-U.S. holder of a trade or business within the United States 

(in which case, provided the non-U.S. holder provides a properly 

executed IRS Form W-8ECI (or successor form) to the 

withholding agent, the non-U.S. holder (x) generally will not be 

subject to withholding tax, but (y) will be subject to U.S. federal 

income tax in the same manner as a U.S. holder (unless an 

applicable income tax treaty provides otherwise), and a non-U.S. 

holder that is a corporation for U.S. federal income tax purposes 

may also be subject to a branch profits tax with respect to such 

non-U.S. holder’s effectively connected earnings and profits that 

are attributable to the accrued but untaxed interest at a rate of 

30% (or at a reduced rate or exemption from tax under an 

applicable income tax treaty)).

A non-U.S. holder that does not qualify for exemption from withholding tax with respect to 

accrued but untaxed interest that is not effectively connected income generally will be subject to 

withholding of U.S. federal income tax at a 30% rate (or at a reduced rate or exemption from tax under an 

applicable income tax treaty) on payments that are attributable to accrued but untaxed interest. For 

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purposes of providing a properly executed IRS Form W-8BEN or W-BEN-E, special procedures are 

provided under applicable Treasury Regulations for payments through qualified foreign intermediaries or 

certain financial institutions that hold customers’ securities in the ordinary course of their trade or 

business.

E. Information Reporting and Back-Up Withholding

The Debtors will withhold all amounts required by law to be withheld from payments of interest 

and dividends. The Debtors will comply with all applicable reporting requirements of the Tax Code. In 

general, information reporting requirements may apply to distributions or payments made to a holder of a 

Claim under the Plan. In addition, backup withholding of taxes will generally apply to payments in 

respect of an Allowed Claim under the Plan unless, in the case of a U.S. holder, such U.S. Holder 

provides a properly executed IRS Form W-9 and, in the case of non-U.S. holder, such non-U.S. holder 

provides a properly executed applicable IRS Form W-8 (or otherwise establishes such Non-U.S. holder’s 

eligibility for an exemption). 

Backup withholding is not an additional tax. Amounts withheld under the backup withholding 

rules may be credited against a holder’s U.S. federal income tax liability, and a holder may obtain a 

refund of any excess amounts withheld under the backup withholding rules by filing an appropriate claim 

for refund with the IRS (generally, a federal income tax return). 

In addition, from an information reporting perspective, the Treasury Regulations generally 

require disclosure by a taxpayer on its U.S. federal income tax return of certain types of transactions in 

which the taxpayer participated, including, among other types of transactions, certain transactions that 

result in the taxpayer’s claiming a loss in excess of specified thresholds. Holders are urged to consult 

their tax advisors regarding these regulations and whether the transactions contemplated by the Plan 

would be subject to these regulations and require disclosure on the holders’ tax returns. 

THE FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN ARE COMPLEX. 

THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME 

TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF SUCH 

HOLDER’S CIRCUMSTANCES AND INCOME TAX SITUATION. ALL HOLDERS OF 

CLAIMS AND INTERESTS SHOULD CONSULT WITH THEIR TAX ADVISORS AS TO THE 

PARTICULAR TAX CONSEQUENCES TO THEM OF THE TRANSACTIONS 

CONTEMPLATED BY THE PLAN, INCLUDING THE APPLICABILITY AND EFFECT OF 

ANY STATE, LOCAL, OR FOREIGN TAX LAWS, AND OF ANY CHANGE IN APPLICABLE 

TAX LAWS. 

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XIV. RECOMMENDATION

In the opinion of the Debtors, the Plan is preferable to all other available alternatives and provides 

for a larger distribution to the Debtors’ creditors than would otherwise result in any other scenario. 

Accordingly, the Debtors recommend that holders of Claims entitled to vote on the Plan vote to accept the 

Plan and support Confirmation of the Plan. 

Dated: May 12, 2016 PENN VIRGINIA CORPORATION

on behalf of itself and all other Debtors

R. Seth Bullock

Chief Restructuring Officer

Four Radnor Corporate Center, Suite 200

100 Matsonford Road

Radnor, Pennsylvania 19087

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Exhibit A

Plan of Reorganization 

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Exhibit B

Restructuring Support Agreement

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Exhibit C

Corporate Organization Chart

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Exhibit D

Disclosure Statement Order

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Exhibit E

Rights Offering Procedures

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Exhibit F 

Liquidation Analysis

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Exhibit G 

Financial Projections

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Exhibit H 

Valuation Analysis 

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