SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ ~~X ]~~X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the period ended ~~June~~September 30, 2002

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from

Commission File Number 1-13283

PENN VIRGINIA CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Virginia

23-1184320

~~(State~~(State or Other Jurisdiction of

~~(I.R.S.~~(I.R.S. Employer

~~Incorporation or Organization)~~

Identification No.)

Incorporation of Organization)

100 MATSONFORD ROAD SUITE 200

RADNOR, PA

19087

(Address of Principal Executive Offices)

~~(Zip~~(Zip Code)

(610) 687-8900

(Registrant's Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of

the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant

was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Number of shares of common stock of Registrant outstanding at ~~August 8,~~October 29, 2002: ~~8,943,716~~8,944,833

PENN VIRGINIA CORPORATION

INDEX

PART I Financial Information	PAGE

Item 1. Financial Statements

Consolidated Statements of Income for the three and nine months ended September 30, 2002 and 2001	3

Consolidated Balance Sheets as of September 30, 2002 and December 31, 2001	4

Consolidated Cash Flow Statements for the three and nine months ended September 30, 2002 and 2001	6

Condensed Notes to Consolidated Financial Statements	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	14

PART II Other Information

Item 4. Controls and Procedures	28

Item 6. Exhibits and Reports on Form 8-K	28

PART I.I Financial Information

Item 1. Financial Statements

PENN VIRGINIA CORPORATION AND SUBSIDIARIES
~~CONDENSED~~ CONSOLIDATED STATEMENTS OF INCOME - Unaudited
(in thousands, except share data)

Three Months

Six Months

Ended June 30,

Ended June 30,

2002

2001

2002

2001
Revenues:

        Natural gas
$      15,683

$        14,506

$      27,020

$      31,547
        Oil and condensate
     1,875

         77

3,869

     159
        Coal royalties
6,693

7,928

15,184

15,261
        Timber
499

397

1,081

758
        Other
898

1,833

2,877

4,137
               Total revenues
25,648

24,741

50,031

51,862

Expenses:

        Lease operating expenses
2,568

1,792

5,382

3,571
        Exploration expenses
2,026

1,948

2,164

2,655
        Taxes other than income
1,610

1,238

3,122

2,615
        General and administrative
5,519

2,927

10,058

5,963
        Depreciation, depletion, amortization
7,010

3,474

13,612

6,761
               Total expenses
18,733

11,379

34,338

21,565

Operating income
6,915

13,362

15,693

30,297

Other income (expense):

        Interest expense
(489)

(289)

(959)

(1,096)
        Interest and other income
522

457

1,075

844
        Gain on sale of securities
-

54,688

-

54,688
Income from continuing operations before minority

    interest, income taxes and discontinued operations
6,948

68,218

15,809

84,733

        Minority interest in Penn Virginia Resource Partners, L.P.
2,377

-

5,942

-
        Income tax expense
1,629

25,200

3,555

31,005
Income from continuing operations
2,942

         43,018

         6,312

        53,728

Income from discontinued operations (including gain on

   sale and net of taxes)
221

-

221

-

Net income
$        3,163

$       43,018

$        6,533

$       53,728

Income from continuing operations per share, basic
$          0.33

$          4.88

$          0.71

$           6.19
Net income per share, basic
$          0.35

$          4.88

$          0.73

$           6.19
Income from continuing operations per share, diluted
$          0.33

$          4.79

$          0.70

$           6.09
Net income per share, diluted
$          0.35

$          4.79

$          0.73

$           6.09

Weighted average shares outstanding, basic
8,927

8,820

8,918

8,679
Weighted average shares outstanding, diluted
8,984

8,982

8,968

8,827

	Three Months		Nine Months
	Ended September 30,		Ended September 30,
	2002	2001	2002	2001
Revenues:
Natural gas	$ 16,012	$ 11,627	$ 43,032	$ 43,174
Oil and condensate	2,085	1,687	5,954	1,846
Coal royalties	8,253	9,154	23,437	24,415
Timber	360	358	1,441	1,116
Other	2,044	1,205	4,921	5,342
Total revenues	28,754	24,031	78,785	75,893


Expenses:
Lease operating	3,417	2,735	8,799	6,306
Exploration	1,682	3,747	3,846	6,402
Taxes other than income	1,653	1,245	4,775	3,860
General and administrative	5,567	4,062	15,303	9,903
Impairment of oil and gas properties	501	-	501	-
Depreciation, depletion, amortization	8,146	5,401	21,758	12,162
Total expenses	20,966	17,190	54,982	38,633


Operating income	7,788	6,841	23,803	37,260

Other income (expense):
Interest expense	(707)	(721)	(1,988)	(1,939)
Interest and other income	508	371	1,583	1,215
Gain on sale of securities	-	-	-	54,688
Income from continuing operations before minority
interest, income taxes and discontinued operations	7,589	6,491	23,398	91,224

Minority interest in Penn Virginia Resource Partners, L.P.	3,379	-	9,321	-
Income tax expense	1,002	2,244	4,557	33,249
Income from continuing operations	3,208	4,247	9,520	57,975

Income from discontinued operations (including gain on
sale and net of taxes)	-	-	221	-

Net income	$ 3,208	$ 4,247	$ 9,741	$ 57,975

Income from continuing operations per share, basic	$ 0.36	$ 0.48	$ 1.07	$ 6.64
Net income per share, basic	$ 0.36	$ 0.48	$ 1.09	$ 6.64
Income from continuing operations per share, diluted	$ 0.36	$ 0.47	$ 1.07	$ 6.53
Net income per share, diluted	$ 0.36	$ 0.47	$ 1.09	$ 6.53

Weighted average shares outstanding, basic	8,944	8,869	8,926	8,736
Weighted average shares outstanding, diluted	8,992	9,007	8,975	8,880

The accompanying notes are an integral part of these condensed consolidated financial statements.

PENN VIRGINIA CORPORATION AND SUBSIDIARIES
~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS ~~- Unaudited~~
(in thousands)

June 30,

December 31,

2002

2001

ASSETS

Current assets

      Cash and cash equivalents

$         11,799

$             9,621
      Accounts receivable

14,773

              15,403
      Current portion of long-term notes receivable

505

                   599
      Price risk management assets

284

                3,674
      Other

1,229

            1,105
          Total current assets

           28,590

      30,402

Property and equipment

Oil and gas properties (successful efforts method)

354,589

            335,494
Other property and equipment

120,597

            117,789
Less: Accumulated depreciation, depletion and amortization
(85,732)

          (72,095)
          Net property and equipment

389,454

           381,188

Restricted U.S. Treasury Notes

43,387

                43,387
Other assets

5,260

               5,194

            Total assets

$      466,691

$         460,171

September 30,

December 31,

2002

2001

(Unaudited)

ASSETS

Current assets

      Cash and cash equivalents

$           9,377

$             9,621
      Accounts receivable

16,816

              15,403
      Current portion of long-term notes receivable

516

                   599
      Price risk management assets

142

                3,674
      Other

705

1,105
          Total current assets

27,556

             30,402

Property and equipment

Oil and gas properties (successful efforts method)

366,412

            335,494
Other property and equipment

132,732

            117,789
Less: Accumulated depreciation, depletion and amortization
(93,870)

          (72,095)
          Net property and equipment

405,274

          381,188

Restricted U.S. Treasury Notes

31,387

              43,387
Other assets

5,039

                5,194

            Total assets

$       469,256

$         460,171
The accompanying notes are an integral part of these condensed consolidated financial statements.

43

PENN VIRGINIA CORPORATION AND SUBSIDIARIES
~~CONDENSED~~ CONSOLIDATED BALANCE SHEETS ~~- Unaudited~~
(in thousands, except share data)

June 30,

December 31,

2002

2001

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt

$                  66

$          1,235
Accounts payable

             752

             3,987
Accrued liabilities

7,822

           13,831
Price risk management liabilities

1,347

                     -
Taxes on income

1,424

                     -
            Total current liabilities

11,411

          19,053

Other liabilities

12,021

             8,877
Deferred income taxes

56,182

           55,861
Long-term debt

14,000

           �� 3,500
Long-term debt secured by U.S. Treasury Notes
43,387

           43,387

Minority interest in Penn Virginia Resource Partners, L.P.
143,149

         144,039

Shareholders' equity

Preferred stock of $100 par value-

     authorized 100,000 shares; none issued

-

-
Common stock of $6.25 par value-

     16,000,000 shares authorized; 8,943,376 shares issued
55,895

           55,762
Other paid in capital

11,495

             9,869
Retained earnings

121,643

         119,125
Accumulated other comprehensive income
(1,139)

             1,756

187,894

         186,512
Less: 23,765 shares of common stock held in treasury,

      at cost on December 31, 2001

-

                599
Unearned compensation

1,353

                459

     Total shareholders' equity

186,541

         185,454

     Total liabilities and shareholders' equity
$      466,691

$      460,171

September 30,

December 31,

2002

2001

(Unaudited)

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt

$                15

$          1,235
Accounts payable

2,165

             3,987
Accrued liabilities

7,503

           13,831
Price risk management liabilities

1,201

                     -
            Total current liabilities

10,884

          19,053

Long-term debt

23,000

             3,500
Long-term debt secured by U.S. Treasury Notes
31,387

           43,387
Other liabilities

12,714

             8,877
Deferred income taxes

60,455

           55,861

Minority interest in Penn Virginia Resource Partners, L.P.
142,803

         144,039

Shareholders' equity

Preferred stock of $100 par value-

     authorized 100,000 shares; none issued

-

-
Common stock of $6.25 par value-

     16,000,000 shares authorized; 8,944,833 and 8,921,866 shares issued
     at September 30, 2002 and December 31, 2001, respectively
55,904

           55,762
Other paid in capital

11,558

             9,869
Retained earnings

122,841

         119,125
Accumulated other comprehensive income
(1,044)

             1,756

189,259

         186,512
Less:  23,765 shares of common stock held in treasury,

      at cost on December 31, 2001

-

                599
Unearned compensation

1,246

                459

            Total shareholders' equity

188,013

         185,454

            Total liabilities and shareholders' equity
$       469,256

$      460,171
The accompanying notes are an integral part of these condensed consolidated financial statements.

54

PENN VIRGINIA CORPORATION AND SUBSIDIARIES
~~CONDENSED~~ CONSOLIDATED CASH FLOW STATEMENTS - Unaudited
(in thousands)

Three Months

Six Months
Three Months

Nine Months

Ended June 30,

Ended June 30,
Ended September 30,

Ended September 30,

2002

2001

2002

2001
2002

2001

2002

2001

Cash flow from operating activities:

Net Income
$     3,163

$    43,018

$     6,533

$    53,728
$      3,208

$      4,247

$    9,741

$    57,975
Adjustments to reconcile net income to net

cash provided by operating activities:

Depreciation, depletion, and amortization
7,035

3,474

13,637

6,761
8,146

5,401

21,758

12,162
Impairment of oil and gas properties
501

-

501

-
Minority interest in Penn Virginia Resource Partners, L.P.
2,377

-

5,942

-
3,379

-

9,321

-
Gain on sale of properties
(341)

(807)

(341)

(834)
Discontinued operations gain on sale of properties and depletion
-

-

(312)

-
Loss (Gain) on sale of properties
11

(313)

7

(1,147)
Gain on sale of securities
-

(54,688)

-

(54,688)
-

-

-

(54,688)
Deferred income taxes
1,523

840

1,880

3,023
4,221

1,929

6,101

4,952
Dry hole and unproved leasehold expense
118

1,344

159

1,454
Dry hole and leasehold amortization
5

2,846

149

4,300
Tax benefit from stock option exercises
150

1,148

220

2,716
4

-

224

2,716
Other
508

36

836

84
399

78

1,250

162

14,533

(5,635)

28,866

12,244
19,874

14,188

48,740

26,432

Changes in operating assets and liabilities:

Current assets
(719)

(3,446)

390

(2,338)
(1,577)

1,101

(1,187)

(1,237)
Current liabilities
(3,513)

19,220

(7,318)

16,144
(330)

(15,117)

(7,648)

1,027
Other assets
(226)

(6)

(672)

(36)
(64)

(336)

(736)

(372)
Other liabilities
1,144

146

1,386

186
693

1,894

2,079

2,080
Net cash flows provided by operating activities
11,219

10,279

22,652

26,200
18,596

1,730

41,248

27,930

Cash flows from investing activities:

Proceeds from sale of U.S. Treasury Notes
12,000

-

12,000

-
Payments received on long-term notes receivable
109

246

335

491
110

245

445

736
Proceeds from sale of properties
1,236

1,181

1,300

1,246
14

37

1,314

1,283
Proceeds from sale of securities
-

57,525

-

57,525
-

-

-

57,525
Additions to property and equipment
(12,290)

(47,747)

(21,262)

(54,971)
(24,477)

(125,267)

(45,739)

(180,238)
Net cash flows provided by (used in) investing activities
(10,945)

11,205

(19,627)

4,291
Net cash flows used in investing activities
(12,353)

(124,985)

(31,980)

(120,694)

Cash flows from financing activities

Dividends paid
(2,010)

(1,997)

(4,015)

(3,932)
(2,012)

(1,996)

(6,027)

(5,928)
Distributions paid to minority interest holders of subsidiary
(3,747)

-

(6,295)

-
(3,746)

-

(10,041)

-
Proceeds from (repayments of) borrowings
3,077

(22,297)

9,331

(35,722)
(3,051)

124,546

6,280

88,824
Purchase of units of Penn Virginia Resource Partners, L.P.
-

-

(1,067)

-
-

-

(1,067)

-
Purchase of treasury stock
(521)

-

(557)

-
-

-

(557)

-
Issuance of stock
1,241

3,388

1,756

9,025
144

108

1,900

9,133
Net Cash used in financing activities
(1,960)

(20,906)

(847)

(30,629)
Net Cash provided by (used in) financing activities
(8,665)

122,658

(9,512)

92,029

Net increase (decrease) in cash and cash equivalents
(1,686)

578

2,178

(138)
Net decrease in cash and cash equivalents
(2,422)

(597)

(244)

(735)
Cash and cash equivalents-beginning of period
13,485

19

9,621

735
11,799

597

9,621

735
Cash and cash equivalents-end of period
$    11,799

$        597

$    11,799

$        597
$      9,377

$              -

$      9,377

$              -

Supplemental disclosures of cash flow information:

Cash paid during the periods for:

Interest
$         563

$        188

$         822

$    1,011
$         478

$          598

$      1,300

$      1,569
Income taxes
$           75

$     4,411

$           75

$    9,978
$            10

$     18,000

$         113

$    26,000
Noncash financing activities:

Restricted subsidiary partnership units granted as unearned compensation
$             -

$            -

$      1,067

$            -
$               -

$               -

$      1,067

$             -

Deferred tax liabilities related to acquisition
$               -

$     43,807

$              -

$   43,807
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
6
PENN VIRGINIA CORPORATION

CONDENSED NOTES TO ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2002

1. INTRODUCTION
      The accompanying unaudited condensed consolidated financial statements include the accounts of Penn Virginia Corporation ("Penn Virginia" or the "Company"), all wholly-owned subsidiaries, and Penn Virginia Resource Partners, L.P. (the "Partnership" or "PVR") in which we have an approximate 52 percent ownership interest. Penn Virginia Resource GP, LLC, a wholly-owned subsidiary of Penn Virginia, serves as the Partnership's sole general partner. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and SEC regulations. These statements involve the use of estimates and judgments where appropriate. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the Company's consolidated financial statements and footnotes included in the Company's ~~December 31, 2001~~ Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2001. Operating results for the ~~six~~nine months ended ~~June~~September 30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. Certain reclassifications have been made to conform to the current period's presentation.

2. ACQUISITIONS
     On July 23, 2001, the Company acquired all of the outstanding stock of Synergy Oil and Gas, Inc., a Texas Corporation. Cash consideration for the stock was $112 million (subject to certain post closing adjustments) and was funded by long-term debt. As of July 23, 2001, Synergy Oil and Gas, Inc. had net proved oil and gas reserves of approximately 58 Bcfe. The operations have been included in the Company's statement of income as of the closing date. The following unaudited pro forma results of operations have been prepared to give effect to (1) the sale of 3,307,200 shares of Norfolk Southern Corporation common stock on April 26, 2001 and (2) the acquisition of Synergy Oil & Gas, Inc. on July 23, 2001 had such transactions been completed on January 1, 2001. The unaudited pro forma results of operations consist of the following (in thousands, except share data):

Three Months Ended

Nine Months Ended

September 30, 2001

September 30, 2001

Revenues
$  23,718

$  92,534
Net income
$    3,680

$  66,377
Net income per share, diluted
$      0.41

$      7.47
The summarized pro forma information has been prepared for comparative purposes only.
3. PRICE RISK MANAGEMENT ACTIVITIES
      From time to time, we enter into derivative financial instruments to mitigate our exposure to natural gas and crude oil price volatility. The derivative financial instruments, which are placed with a major financial ~~institution~~institutions that we believe ~~is a~~are minimum credit ~~risk,~~risks, take the form of costless collars and swaps. All derivative financial instruments are recognized in the financial statements at fair value in accordance with Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Certain Hedging Activities, as amended by SFAS No. 137 and SFAS No. 138, Accounting for Certain Derivative Instruments and Certain Hedging Activities, and Amendment of FASB Statement No. 133.
      All derivative instruments are recorded on the balance sheet at fair value. If the derivative does not qualify as a hedge or is not designated as a hedge, the gain or loss on the derivative is recognized currently in earnings. To qualify for hedge accounting, the derivative must qualify either as a fair value hedge, cash flow hedge or foreign currency hedge. Currently, ~~the Company is~~we are utilizing only cash flow hedges and the remaining discussion will relate exclusively to this type of derivative instrument. All hedge transactions are subject to our risk management policy, which has been reviewed and approved by the Board of Directors.
7
      We formally document all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as cash flow hedges to forecasted transactions. We also formally assess, both at inception of the ~~hedge's inception~~hedge and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged transactions. We measure hedge effectiveness on a period basis. When it is determined that a derivative is not highly effective as a hedge, or that it has ceased to be a highly effective hedge, we discontinue hedge accounting prospectively.
      When hedge accounting is discontinued because it is probable that a forecasted transaction will not occur, the derivative will continue to be carried on the balance sheet at its fair value, and gains and losses that were accumulated in other comprehensive income will be recognized in earnings immediately. In all other situations in which hedge accounting is discontinued, the derivative will be a carried at its fair value on the balance sheet, with changes in its fair value recognized in earnings prospectively.
      Gains and losses on hedging instruments when settled are included in natural gas or crude oil production revenues in the period that the related production is delivered.

6

      The fair value of our hedging instruments is determined based on third party forward price quotes for NYMEX Henry Hub ~~closing~~ and West Texas ~~intermediate price~~Intermediate closing price's as of ~~June~~September 30, 2002. The following table sets forth our positions as of ~~June~~September 30, 2002:

Notional
Fixed Price or

Time Period
Quantities
Effective Floor/Ceiling Price
Fair Value

(in millions)
Natural Gas
(MMbtu per Day)

     Costless collars

        July 1 - October 31, 2002
5,000
$2.75 / $3.00
$                 (0.2)
       July 1 - December 31, 2002
2,301
$4.00 / $5.70
0.3
        July 1 - December 31, 2002
1,315
$4.00 / $6.25
0.2
        July 1 - September 30, 2002
3,000
$3.17 / $3.72
-
        November 1 - December 31, 2002
8,000
$2.96 / $5.05
-
        January 1 - March 31, 2003
10,000
$2.96 / $5.05
(0.2)
        April 1 - October 31, 2003
5,000
$2.92 / $4.42
(0.3)
    Fixed price swap

       July 1 - October 31, 2002
13,000
$2.74
                     (0.6)

Crude Oil
(Bbls per Day)

    Costless collars

        July 1 - December 31, 2002
263
$20.00 / $24.50
                   (0.1)
        July 1 - December 31, 2002
197
$22.00 / $26.60
   (0.1)
        July 1 - December 31, 2002
303
$22.00 / $26.20
(0.1)

Total
$                   (1.1)

Notional
Fixed Price or

Time Period
Quantities
Effective Floor/Ceiling Price
Fair Value

(in thousands)
Natural Gas
(MMbtu per Day)

     Costless collars

        October 1 - December 31, 2002
2,301
$4.00 / $5.70
$                 56
        October 1 - December 31, 2002
1,315
$4.00 / $6.25
34
        November 1 - December 31, 2002
8,000
$2.96 / $5.05
(74)
        January 1 - March 31, 2003
10,000
$2.96 / $5.05
(253)
        January 1 - September 30, 2003
5,000
$3.47 / $5.20
(84)
        April 1- October 31, 2003
5,000
$2.92 / $4.42
(325)

Crude Oil
(Bbls per Day)

    Costless collars

        October 1 - December 31, 2002
263
$20.00 / $24.50
(177)
        October 1 - December 31, 2002
197
$22.00 / $26.60
(85)
        October 1 - December 31, 2002
303
$22.00 / $26.20
(89)
        January 1 - September 30, 2003
500
$23.00 / $28.75
(60)

Total

$         (1,057)
    Based upon our assessment of our derivative contracts at ~~June~~September 30, 2002, we reported (i) an approximate liability of ~~$1.4~~$1.2 million and an asset of ~~$0.3~~$0.1 million and (ii) a loss in accumulated other comprehensive income of ~~$0.9~~$0.8 million, net of related income taxes of ~~$0.5~~$0.4 million. In connection with monthly settlements, we recognized net hedging ~~gains~~losses in natural gas and oil revenues of ~~$0.3~~$0.4 million for the ~~six~~nine months ended ~~June~~September 30, 2002. Based upon future oil and natural gas prices as of ~~June~~September 30, 2002, $1.1 million of hedging losses are expected to be realized within the next 1613 months. The amounts ultimately realized will vary due to changes in the fair value of the open derivative contracts prior to settlement.
8
3.4. LONG-TERM DEBT
      At September 30, 2002 and December 31, 2002, long-term debt consists of the following (in thousands):

September 30,

December 31,

2002

2001

(Unaudited)

Penn Virginia revolving credit facility
$   11,000

$     3,500
PVR unsecured term loan
  12,000

   -

$   23,000

$     3,500
PVR term loan secured by U.S. Treasury Notes
$   31,387

$   43,387
5. CONTINGENT LIABILITIES
    We are involved in various legal proceedings arising in the ordinary course of business. While the ultimate results of these proceedings cannot be predicted with certainty, we believe these claims will not have a material effect on our financial position, liquidity or operations.
    On March 25, 2002, we entered into an agreement with an investment banking firm to provide financial advisory services in connection with our receipt and consideration of various shareholder proposals. The fees payable under this agreement cannot be calculated with certainty until the time of actual payment which will occur on or before November 30, 2003. As of September 30, 2002, based on a range of probable payment amounts, we have recognized expenses of approximately $0.8 million for services rendered in connection with this agreement. We will continue to accrue additional expenses under this agreement in accordance with our best estimate of the amount due for such services.
7

4.6. EARNINGS PER SHARE
    The following is a reconciliation of the amounts used in the calculation of basic and diluted earnings per share for income from continuing operations and net income at ~~June~~September 30, 2002 and 2001 (in thousands, except share data).

Three Months

Six Months

Ended June 30,

Ended June 30,

2002

2001

2002

2001

Income from continuing operations
$    2,942

$  43,018

$     6,312

$  53,728
Income from discontinued operations
221

-

221

-
Net income
$    3,163

$  43,018

$     6,533

$  53,728

Weighted average shares, basic
8,927

8,820

8,918

8,679
Dilutive securities:

Stock options
57

162

50

148
Weighted average shares, diluted
8,984

8,982

8,968

8,827

Income from continuing operations per share, basic
$      0.33

$      4.88

$       0.71

$      6.19
Income from discontinued operations per share, basic
  0.02

      -

  0.02

    -
Net income per share, basic
$      0.35

$      4.88

$       0.73

$      6.19

Income from continuing operations per share, diluted
$      0.33

$      4.79

$       0.70

$      6.09
Income from discontinued operations per share, diluted
0.02

-

0.03

-
Net income per share, diluted
$      0.35

$      4.79

$       0.73

$      6.09

Three Months

Nine Months

Ended September 30,

Ended September 30,

2002

2001

2002

2001

Income from continuing operations
$    3,208

$    4,247

$   9,520

$  57,975
Income from discontinued operations
-

-

221

-
Net income
$    3,208

$    4,247

$   9,741

$  57,975

Weighted average shares, basic
8,944

8,869

8,926

8,736
Dilutive securities:

     Stock options
48

138

49

144
Weighted average shares, diluted
8,992

9,007

8,975

8,880

Income from continuing operations per share, basic
$      0.36

$      0.48

$      1.07

$      6.64
Income from discontinued operations per share, basic
-

     -

0.02

    -
Net income per share, basic
$      0.36

$      0.48

$      1.09

$      6.64

Income from continuing operations per share, diluted
$      0.36

$      0.47

$      1.07

$      6.53
Income from discontinued operations per share, diluted
-

-

0.02

-
Net income per share, diluted
$      0.36

$      0.47

$      1.09

$      6.53

9
5.7. COMPREHENSIVE INCOME
    Comprehensive income represents changes in retained earnings during the reporting period, including net income and charges made directly to retained ~~earnings, which are excluded from net income.~~earnings. For the three- and ~~six-month~~nine-month periods ended ~~June~~September 30, 2002 and 2001, the components of comprehensive income are as follows (in thousands):

Three Months

Six Months

Ended June 30,

Ended June 30,

2002

2001

2002

2001

Net income
$    3,163

$  43,018

$     6,533

$  53,728

Holding gains on available-for-sale securities

     during period, net of tax
-

1,348

-

8,741
Unrealized gains (losses) on price risk

     management, net of tax
219

512

(2,702)

649
Reclassification adjustment for available-for-sale

     securities, net of tax
-

(35,547)

-

(35,547)
Reclassification adjustment for price risk management,

     net of tax
629

-

(193)

-

$    4,011

$    9,331

$     3,638

$  27,571

Three Months

Nine Months

Ended September 30,

Ended September 30,

2002

2001

2002

2001

Net income
$    3,208

$    4,247

$    9,741

$  57,975

Holding gains on available-for-sale securities

     during period, net of tax
-

-

-

8,741
Unrealized gains (losses) on price risk

     management, net of tax
(332)

1,122

(3,034)

1,896
Reclassification adjustment for available-for-sale

     securities, net of tax
-

-

-

(35,547)
Reclassification adjustment for price risk management,

     net of tax
427

(1,101)

234

(1,226)
Total comprehensive income
$    3,303

$    4,268

$     6,941

$  31,839

8

6.8. LONG-TERM INCENTIVE PLAN
    In January 2002, pursuant to the PVR long-term incentive plan ~~detailed~~described in its ~~2001~~Annual Report on Form 10-K for the year ended December 31, 2001, we purchased and awarded PVR common units to certain directors and employees of the general partner of PVR as restricted units. The units are restricted for a five-year period, with 25 percent vested by the end of 2004, another 25 percent vested by the end of 2005, and the remaining 50 percent vested during 2006. Amounts related to this transaction are reported in the Unearned Compensation balance in the Shareholder's Equity section of the Balance Sheet. Compensation expense related to these awards ~~will be~~is amortized into earnings ratably over the vesting ~~period,~~period. PVR reimburses usthe Company for the cost ~~we incurr~~it incurred to purchase and award the PVR common units.

7.9. SEGMENT INFORMATION
Penn Virginia's operations are classified into two operating segments:
    Oil and Gas - crude oil and natural gas exploration, development and production.
    Coal Royalty and Land Management - the ~~leasing~~management of coal ~~mineral rights and subsequent~~properties resulting in collection of coal royalties and service fees and the ~~development~~harvesting and ~~harvesting~~sale of timber. ~~This segment's~~The activities related to this segment are conducted through Penn Virginia's ownership interest in Penn Virginia Resource Partners, L.P.
      All ~~other -~~Other - primarily represents corporate assets and related expenses.

Coal Royalty

Coal Royalty

and Land

All

and Land

All

Oil and Gas

Management

Other

Consolidated
Oil and Gas

Management

Other

Consolidated
(in thousands)
(in thousands)
For the six months ended June 30, 2002:

For the three months ended September 30, 2002:

Revenues
$        18,182

$         10,404

$              168

$         28,754
Operating costs and expenses
7,823

2,370

2,126

12,319
Depreciation, depletion and amortization
7,098

995

53

8,146
Impairment of oil and gas properties
501

-

-

501
Operating income (loss)
$          2,760

$           7,039

$          (2,011)

        7,788
Interest expense

(707)
Interest and other income

508
Income from continuing operations

before minority interest and taxes

$           7,589
Additions to property and equipment
$       12,329

$        12,106

$               42

$         24,477

For the three months ended September 30, 2001:

Revenues
$           30,994

$           18,546

$                491

$           50,031
$         13,691

$          9,974

$              366

$         24,031
Operating costs and expenses
12,263

4,837

3,626

20,726
8,169

2,185

1,435

11,789
Depreciation, depletion and amortization
11,943

1,563

106

13,612
4,537

845

19

5,401
Operating income (loss)
$             6,788

$           12,146

$           ( 3,241)

$           15,693
$             985

$          6,944

$         (1,088)

           6,841
Interest expense

(959)

(721)
Interest income

1,075
Income from continuing operations

before minority interest and taxes

$           15,809
Identifiable assets
$         294,585

$         165,344

$             6,762

$         466,691

For the six months ended June 30, 2001:

Revenues
$           32,636

$           18,444

$                782

$           51,862
Operating costs and expenses
8,449

4,177

2,178

14,804
Depreciation, depletion and amortization
5,450

1,271

40

6,761
Operating income (loss)
$           18,737

$           12,996

$           (1,436)

$           30,297
Interest expense

(1,096)
Gain on sale of securities

54,688
Interest and other income

844

371
Income before taxes

$           84,733

$           6,491
Identifiable assets
$         160,616

$         111,874

$             1,202

$         273,692
Additions to property and equipment
$      125,046

$             162

$                59

$       125,267
~~Identifiable assets are those assets used in the Company's operations in each segment.~~
9

11

Coal Royalty

and Land

All

Oil and Gas

Management

Other

Consolidated
(in thousands)
For the nine months ended September 30, 2002:

Revenues
$        49,176

$         28,950

$              659

$        78,785
Operating costs and expenses
20,086

7,207

5,430

32,723
Depreciation, depletion and amortization
19,041

2,558

159

21,758
Impairment of oil and gas properties
501

-

-

501
Operating income (loss)
$          9,548

$         19,185

$         (4,930)

        23,803
Interest expense

(1,988)
Interest and other income

1,583
Income from continuing operations

   before minority interest and taxes

$        23,398
Additions to property and equipment
$        32,542

$         12,887

$              310

$        45,739

For the nine months ended September 30, 2001:

Revenues
$         46,329

$         28,418

$           1,146

$         75,893
Operating costs and expenses
16,620

6,362

3,489

26,471
Depreciation, depletion and amortization
9,987

2,116

59

12,162
Operating income (loss)
$         19,722

$         19,940

$         (2,402)

$         37,260
Interest expense

(1,939)
Interest and other income

1,215
Gain on sale of securities

54,688
Income before taxes

$         91,224
Additions to property and equipment
$       146,419

$        33,719

$             100

$       180,238
8.10. DISCONTINUED OPERATIONS
       During the second quarter of 2002, we sold certain marginal oil and gas properties that were considered a component of the Company under SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived ~~Assets.~~Assets. The properties sold included various interests in South Texas properties acquired in the third quarter of last ~~year.~~year, the operations of which were insignificant in 2001. The net carrying amount of properties sold was $0.5 million. We adopted the provisions ~~of SFAS~~ofSFAS No. ~~144effective~~144effective January 1, 2002. Accordingly, the components of discontinued operations ~~are~~were as follows for the ~~three-months~~nine-months ended ~~June~~September 30, 2002 (in thousands). ~~The results of operations for the first quarter of 2002 were insignificant.~~
Revenues

     Natural gas
$         48
     Oil and condensate
332
        Total revenues
      380
Expenses

     Operating expenses
352
     Depreciation, depletion and amortization
25
        Total expenses
377
Income from discontinued operations
3
Gain on sale of properties
337

      340
Income taxes
(119)
Net income from discontinued operations
$        221

12

9.11. IMPAIRMENT OF OIL AND GAS PROPERTIES
     In accordance with SFAS No. 144, Accounting for the Impairment of Disposal or Long-Lived Assets, we review oil and gas properties for impairment when events and circumstances indicate a decline in the recoverability of the carrying value of such properties. Due to a downward revision of the reserve estimates of one Texas oil and gas field, we estimated the future cash flows expected in connection with the property and compared such future cash flows to the carrying amount of the property to determine if the carrying amount was recoverable. We found that the carrying amount of the property exceeded the estimated undiscounted future cash flows. Therefore, we adjusted the carrying amount of the property to its fair value as determined by discounting its estimated future cash flows, and we recognized a pretax charge of $0.5 million related to the impairment of such property. The factors used to determine fair value included, but were not limited to, estimates of proved reserves, future commodity prices, timing of future production, future capital expenditures and a discount rate reflective of the current market for oil and gas properties.
12. NEW ACCOUNTING STANDARDS
      In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143, Accounting for Asset Retirement Obligations. This ~~Statement~~statement requires companies to record a liability relating to the future retirement and removal of assets used in their business. The liability is discounted to its present value, and the related asset value is increased by the amount of the resulting liability. Over the life of the asset, the liability will be accreted to its future value and eventually extinguished when the asset is taken out of service. The provisions of this ~~Statement~~statement are effective for fiscal years beginning after June 15, 2002. We are currently evaluating the ~~effects~~future financial reporting effect of ~~this pronouncement.~~adopting SFAS No. 143 and will complete such assessment during the fourth quarter of 2002. We will adopt the standard effective January 1, 2003.
      In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This statement rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt, which required all gains and losses from extinguishment of debt to be aggregated and, if material, classified as an extraordinary item of debt to be aggregated and, if material, classified as an extraordinary item, net of income taxes. As a result, the criteria in Accounting Principles Board Opinion (APB) Opinion No. 30 will now be used to classify those gains and losses. Any gain or loss on the extinguishment of debt that was classified as an extraordinary item in prior periods presented that does not meet the criteria in APB Opinion No. 30 for classification as an extraordinary item shall be reclassified. The provisions of this ~~Statement~~statement are effective for fiscal years beginning after January 1, 2003. ~~We are currently evaluating~~Under present conditions, management does not expect the ~~effects~~initial adoption of ~~this pronouncement.~~SFAS No. 145 to have a material effect on the financial position, results of operations or liquidity of the Company.
      In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This ~~Statement~~statement requires the recognition of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The provisions of this ~~Statement~~statement are effective for exit or disposal activities initiated after December 31, 2002. ~~We are currently evaluating~~Under present conditions, management does not expect the ~~effects~~initial adoption of ~~this pronouncement.~~
SFAS No. 146 to have a material effect on the financial position, results of operations or liquidity of the Company.
1013

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
    We operate in two business segments: oil and gas and coal royalty and land management. The oil and gas segment includes the exploration for, development and production of crude oil, condensate and natural gas in the eastern and southern portions of the United ~~States. We also own~~States, and our ownership of mineral rights to oil and gas reserves. The coal royalty and land management segment includes coal reserves, timber and other land assets owned by Penn Virginia Resource Partners, L.P. (the "Partnership" or "PVR"). The assets, liabilities and earnings of PVR are included in our consolidated financial statements, with the public unitholders' 48 percent interest in PVR reflected as a minority interest. Selected operating and financial data by segment is presented below.
      The Company's Annual Report on Form 10-K for the year ended December 31, 2001 describes the accounting policies that we believe are critical to the reporting of our financial position and operating results and that require management's judgments. Estimates include, but are not limited to, remaining proved oil and gas reserves, timing of our future drilling activities, and future costs to develop and abandon our oil and gas properties.

Results of Operations - ~~Second Quarters of~~Three Months Ended September 30, 2002 ~~and~~Compared to Three Months Ended September 30, 2001 ~~Compared~~
    We    The Company reported ~~2002 second quarter consolidated~~ net income of $3.2 million, or ~~$0.35~~$0.36 per share (diluted), for the three months ended September 30, 2002, compared with ~~$43.0~~$4.2 million, or ~~$4.79~~$0.47 per share (diluted), for the ~~second quarter of~~three months ended September 30, 2001. ~~On a consolidated basis, revenues~~Revenues increased ~~$1.0~~$4.7 million, primarily as a result of increased natural gas and crude oil production, offset in part by a decrease in coal tons produced and a decrease in natural gas and crude oil prices received. ~~Expenses on a consolidated basis~~Operating expenses were ~~$7.4~~$3.8 million higher during the three months ended September 30, 2002 than the 2001 comparable period primarily due to expense increases related to our acquisition of certain South Texas oil and gas properties in July 2001 and increased expenses related to the ~~third quarter~~consideration of ~~last year.~~various shareholder proposals, offset in part by decreased exploration expenses.
Variances in revenues and operating expenses are explained in more detail in the segment discussions following.
Interest expense. ~~On a consolidated basis, interest~~Interest expense was ~~$0.5~~$0.7 million for the ~~quarter~~three months ended ~~June~~September 30, 2002, compared with ~~$0.3~~$0.7 million for the ~~same period in 2001, an increase of $0.2 million or 67 percent. The increase is primarily due to additional borrowings during the first six~~three months ~~of this year.~~ended September 30, 2001. The 2002 interest expense primarily ~~relates~~related to the ~~$43.4 million~~ PVR term loan secured by U.S. Treasury Notes.
Interest income. Interest income was ~~approximately~~ $0.5 million for ~~both periods.~~the three months ended September 30, 2002, compared with $0.4 million for the three months ended September 30, 2001. The 2002 interest income was earned on the U.S Treasury Notes and a note receivable related to the sale of coal properties in 1986.
Minority interest. Minority interest for the ~~quarter~~three months ended ~~June~~September 30, 2002 was ~~$2.4~~$3.4 million, representing the public unitholders' 48 percent interest in PVR's net income of ~~$5.0 million.~~
$7.0 million for the same period. PVR was created in October 2001; therefore, no comparable amount exists for the same period in 2001.
Income tax expense. Income tax expense for the three months ended September 30, 2002 was $1.0 million compared with $2.2 million for the three months ended September 31, 2001. The 2002 tax provision was reduced by the expected benefit of Section 29 tax credits available to the Company.
Results of Operations - ~~Six~~Nine Months ofEnded September 30, 2002 ~~and 2001~~ Compared to Nine Months Ended September 30, 2002
    WeThe Company reported ~~2002 six months consolidated~~ net income of ~~$6.5~~$9.7 million, or ~~$0.73~~$1.09 per share (diluted), for the nine months ended September 30, 2002, compared with ~~$53.7~~$58.0 million, or ~~$6.09~~$6.53 per share (diluted), for the ~~same period~~nine months ended September 30, 2001. Net income for the nine months ended September 30, 2001 included a gain on sale of ~~2001. On a consolidated basis, revenues decreased $1.8~~securities of $54.7 million ($35.5 million net of taxes). Revenues increased $2.9 million, primarily ~~from~~as a result of increased natural gas and crude oil production, offset in part by a decrease in ~~natural gas prices partially offset by increases~~coal tons produced and a decrease in natural gas and crude oil ~~production. Expenses on a consolidated basis~~prices received. Operating expenses were ~~$12.8~~$16.3 million higher during the nine months ended September 30, 2002 than the 2001 comparable period primarily due to the additional operational and administrative expenses related to our acquisition of certain South Texas oil and gas properties in the third quarter of ~~2001.~~2001 and increased expenses related to the consideration of various shareholder proposals, offset in part by decreased exploration expense.
14
Variances in revenues and operating expenses are explained in more detail in the segment discussions following.
Interest expense. Interest expense was ~~$1.0~~$2.0 million for the ~~six~~nine months ended ~~June~~September 30, 2002, compared with ~~$1.1~~$1.9 million for the ~~same period in~~nine months ended September 30, 2001. The 2002 interest expense primarily ~~relates~~related to the ~~$43.4 million~~ PVR term loan secured by U.S. Treasury ~~Notes.~~Notes, while the 2001 amount related to higher credit facility borrowings outstanding in that period.
Interest income: Interest income was ~~$1.1~~$1.6 million for the ~~first six~~nine months ofended September 30, 2002, compared with ~~$0.8~~$1.2 million for the ~~same period in~~nine months ended September 30, 2001. The increase iswas due to the U.S. Treasury Notes purchased by PVR to secure its term loan in late 2001.
Minority interest. Minority interest for the three months ended September 30, 2002 was $9.3 million, representing the public unitholders' 48 percent interest in PVR's net income for that period of $19.5 million. PVR was created in October 2001; therefore, no comparable amount exists for the same period in 2001.
Income tax expense. Income tax expense for the nine months ended September 30, 2002 was $4.6 million compared with $33.2 million for the nine months ended September 31, 2001. The decrease was due to lower income levels as explained in this section and the expected benefit of Section 29 tax credits available to the Company.
Selected operating and financial data by segment is presented below.
1115

Oil and Gas Segment
~~Quarter~~Three Months Ended ~~June~~September 30, 2002 Compared to ~~Quarter~~Three Months Ended ~~June~~September 30, 2001
    ~~Operating income for the oil and gas segment was $4.1 million for the second quarter of 2002, compared with $7.7 million for the second quarter of 2001. Operational~~The following table sets forth operational and financial data for the Company's oil and gas segment for the ~~first quarter of~~three months ended September 30, 2002 and ~~2001 is summarized as follows:~~2001:
Operations and Financial Summary

Three Months
Three Months

Ended June 30,
Ended September 30,
Production
2002

2001
2002

2001
Natural gas (MMcf)
4,643*

2,932
5,008

3,482
Oil and condensate (Mbbls)
     76*

       4
     91

     73
Equivalent production, MMcfe
5,099

2,956
Equivalent production (MMcfe)
5,554

3,920

(in thousands, except unit cost)
(in thousands, except unit cost)
Revenues:

Natural gas (including $/Mcf)
$     15,683

$         3.38

$     14,506

$         4.95
$     16,012

$         3.20

$     11,627

$         3.34
Oil and condensate (including $Bbl)
1,875

24.67

77

19.25
2,085

22.91

1,687

23.11
Other income
58

-

877

-
85

377

Total revenues (including $/Mcfe)
17,616

3.45

15,460

5.23
18,182

3.27

13,691

3.49

Expenses (including $/Mcfe):

Lease operating expenses
1,974

0.39

1,052

0.36
Exploration expenses
2,005

0.39

1,804

0.61
Lease operating
2,712

0.49

1,917

0.48
Exploration
1,614

0.29

3,627

0.93
Taxes other than income
1,315

0.26

1,015

0.34
1,355

0.24

1,083

0.28
General and administrative
1,930

0.38

1,071

0.36
2,142

0.39

1,542

0.39
Impairment of oil and gas properties
501

0.09

-

-
Depreciation and depletion
6,288

1.23

2,804

0.95
7,098

1.28

4,537

1.16
Total expenses
13,512

2.65

7,746

2.62
15,422

2.78

12,706

3.24

Operating Income (including $/Mcfe)
$       4,104

$         0.80

$       7,714

$         2.61
$       2,760

$         0.49

$       985

$         0.25
* Excludes 18 MMcf natural gas and 16 Mbbls oil and condensate production related to discontinued operations.
    In
    For the ~~second quarter~~three months ended September 30, 2002, 51approximately 53 percent of our natural gas and crude oil production was sold at market prices. The remainder was sold subject to cash flow hedges at an average floor price of ~~$2.96~~$2.98 per MMbtu and ceiling price of ~~$3.36~~$3.38 per MMbtu for natural gas, and an average floor price of ~~$21.33~~$21.29 per barrel and ceiling price of ~~$25.73~~$25.70 per barrel for crude oil. The effects of these hedges were to decrease the average natural gas prices received by ~~$0.20~~$0.10 per Mcf and the average crude oil prices received by ~~$0.68~~$1.97 per ~~barrel for crude oil.~~barrel.
    See "Note 2. Price Risk Management Activities" in the Notes to the Condensed Consolidated Financial Statements for details of costless collars and a fixed price swap for the period ~~July~~October 2002 through October 2003. We will continue, when circumstances warrant, hedging the price received for market-sensitive production through the use of similar type transactions.
Natural gas. Natural gas sales increased ~~$1.2~~$4.4 million, or 838 percent, to $16.0 million in the ~~first quarter of~~three months ended
September 30, 2002,compared with $11.6 million in the ~~same period of~~three months ended September 30, 2001. The average natural gas price ~~received~~realized of $3.20 per Mcf was 324 percent lower in the ~~second~~third quarter of 2002, compared with $3.34 per Mcf in the same quarter of the prior year. ~~However, more~~More than offsetting the price decrease was a production increase of ~~1,711~~1,526 MMcf, or 5844 percent, to 5,008 MMcf in the ~~second~~third quarter of 2002 compared with 3,482 MMcf in the same period in 2001. The production increase was due to added production from the acquisition of certain South Texas oil and gas properties in ~~the third quarter~~late July of ~~last year~~2001 and to increased production from the ~~Gwinville Field.~~2002 drilling program.
16
Oil and condensate. Oil sales increased ~~$1.8~~$0.4 million, or 24 percent, to $2.1 million in the ~~second quarter of~~three months ended September 30, 2002, compared with $1.7 million in the ~~same period of~~three months ended September 30, 2001. The increase was a direct result of ~~increased~~added production, to 91 Mbbls in the three months ended September 30, 2002 from 73 Mbbls in the same period of 2001, primarily related to the acquisition of certain South Texas oil and gas properties in ~~the third quarter~~late July of ~~last year.~~2001.
12

Lease ~~operating expenses.~~operating. ~~Operating~~Lease operating expenses for the ~~second quarter of~~three months ended September 30, 2002 ~~were $2.0~~increased $0.8 million, or 41 percent, to $2.7 million, compared with ~~$1.1~~$1.9 million infor the ~~first quarter of~~three months ended September 30, 2001. The increase was primarily attributable to the ~~third quarter 2001~~ acquisition of certain South Texas oil and gas ~~properties.~~properties in late July of 2001 and the related higher operating costs of properties in that region.
~~Exploration expenses.~~Exploration. Exploration expenses for the ~~second quarter of~~three months ended September 30, 2002 ~~increased to~~decreased $2.0 million, ~~compared with $1.8~~or 56 percent, to $1.6 million infrom $3.6 million for the ~~second quarter of~~three months ended September 30, 2001. This variance was a result of the timing and makeup of exploration activities between the two periods.
Taxes other than on income. Taxes other than on income increased $0.3 million, or 25 percent, to ~~$1.3~~$1.4 million infor the ~~second quarter of~~three months ended September 30, 2002 from ~~$1.0~~$1.1 million infor the three months ended September 30, 2001. The increase was primarily due to higher production. However, on a unit of production basis, severance and ad valorem taxes decreased due to the lower prices received for natural gas.
General and administrative. General and administrative expenses increased $0.6 million, or 39 percent, to ~~$1.9~~$2.1 million infor the ~~second quarter of~~three months ended September 30, 2002 from ~~$1.1~~$1.5 million infor the three months ended September 30, 2001. The increase was attributable to the acquisition of certain South Texas oil and gas properties in ~~the third quarter~~late July of 2001 and personnel expenses related to our ~~anticipated~~ expansion in Gulf Coast region activity.
Impairment of oil and gas properties. Due to a downward revision of the reserve estimates of one Texas oil and gas field, we reviewed certain oil and gas properties for impairment. The carrying amount of the property exceeded the estimated undiscounted future cash flows and, consequently, we adjusted the carrying amount of this property to its fair value as determined by discounting its estimated future cash flows. As a result, we recognized a pretax charge of $0.5 million related to the impairment of oil and gas property for the three months ended September 30, 2002.
Depreciation and depletion. Depreciation and depletion increased $2.6 million, or 56 percent, to ~~$6.3million in~~$7.1 million for the ~~second quarter of~~three months ended September 30, 2002 from ~~$2.8~~$4.5 million infor the three months ended September 30, 2001. The increase was a result of higher production and the ~~third quarter~~late July 2001 acquisition of certain South Texas oil and gas properties, ~~and its~~which have a higher cost basis ~~of related assets.~~than our other properties.
17
~~Six~~Nine Months Ended ~~June~~September 30, 2002 Compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2001
    The following table sets forth operational and financial data for the Company's oil and gas segment for the nine months ended September 30, 2002 and 2001:
Operations and Financial Summary

Six Months
Nine Months

Ended June 30,
Ended September 30,
Production
2002

2001
2002

2001
Natural gas (MMcf)
8,908

5,695
13,916 *

9,177
Oil and condensate (Mbbls)
    168

       7
     259 *

     80
Equivalent production, MMcfe
9,916

5,737
Equivalent production (MMcfe)
15,470 *

9,657

(in thousands, except unit cost)
(in thousands, except unit cost)
Revenues:

Natural gas (including $/Mcf)
$          27,020

$              3.03

$          31,547

$              5.54
$     43,032

$         3.09

$     43,174

$         4.70
Oil and condensate (including $Bbl)
3,869

23.03

159

22.71
5,954

22.99

1,846

23.08
Other income
105

-

930

-
190

1,309

Total revenues (including $/Mcfe)
30,994

3.13

32,636

5.69
49,176

3.18

46,329

4.80

Expenses (including $/Mcfe):

Lease operating expenses
3,763

0.38

1,870

0.33
Exploration expenses
2,049

0.21

2,476

0.43
Expenses (including $/Mcfe):

Lease operating
6,475

0.42

3,787

0.39
Exploration
3,663

0.24

6,104

0.64
Taxes other than income
2,567

0.26

2,073

0.36
3,922

0.25

3,156

0.33
General and administrative
3,884

0.39

2,030

0.35
6,026

0.39

3,573

0.37
Impairment of oil and gas properties
501

0.03

-

-
Depreciation and depletion
11,943

1.20

5,450

0.95
19,041

1.23

9,987

1.03
Total expenses
24,206

2.44

13,899

2.42
39,628

2.56

26,607

2.76

Operating Income (including $/Mcfe)
$            6,788

$              0.69

$           18,737

$              3.27
$     9,548

$         0.62

$     19,722

$         2.04
  In
* Excludes 18 MMcf natural gas and 16 Mbbls oil and condensate production related to discontinued operations.
For the ~~first half of~~nine months ended September 30, 2002, 41approximately 48 percent of our natural gas and crude oil production was sold at market prices. The remainder was sold subject to cash flow hedges at an average floor price of ~~$2.94~~$2.95 per MMbtu and ceiling price of ~~$3.39~~$3.38 per MMbtu for natural gas, and an average floor price of ~~$21.35~~$21.33 per barrel and ceiling price of ~~$25.74~~$25.73 per barrel for crude oil. The effects of these hedges were to ~~increase~~decrease the average price received for natural gas by ~~$0.03~~$0.02 per Mcf and the average crude oil price received by $0.42 per ~~barrel for crude oil.~~barrel.
13
    See "Note 2. Price Risk Management Activities" in the Notes to the Condensed Consolidated Financial Statements for details of costless collars and a fixed price swap for the period ~~July~~October 2002 through October 2003. We will continue, when circumstances warrant, hedging the price received for market-sensitive production through the use of similar type transactions.

Natural gas. Natural gas sales decreased ~~$4.5~~less than one percent, to $43.0 million, ~~or 14 percent, in~~for the ~~first half of~~nine months ended September 30, 2002,compared with $43.2 million for the ~~same period of~~nine months ended September 30, 2001. The average natural gas price ~~received~~realized of $3.09 per Mcf was 4534 percent lower in ~~the first half of~~ 2002, compared with $4.70 per Mcf in the same ~~quarter~~period of the prior year. Offsetting the price decrease was a production increase of ~~3,213~~4,739 MMcf, or 5652 percent, to 13,916 MMcf in ~~the first half of~~ 2002 compared with 9,177 MMcf in the same period in 2001. The production increase was due to added production from the acquisition of certain South Texas oil and gas properties in the third quarter of ~~last year~~2001 and to increased production from the ~~Gwinville Field.~~2002 drilling program.
18
Oil and condensate. Oil sales increased ~~$3.7~~$4.1 million, inor 222 percent, to $6.0 million for the ~~first half of~~nine months ended September 30, 2002, compared with $1.8 million for the ~~same period of~~nine months ended September 30, 2001. The increase in sales was a direct result of added production, which increased ~~production~~to 259 Mbbls for the three months ended September 30, 2002 from 80 Mbbls for the same period of 2001, primarily related to the acquisition of certain South Texas oil and gas properties in the third quarter of ~~last year.~~2001.
Lease ~~operating expenses.~~operating. ~~Operating~~Lease operating expenses for the ~~first half of~~nine months ended September 30, 2002 ~~were $3.8~~increased $2.7 million, or 71 percent, to $6.5 million, compared with ~~$1.9~~$3.8 million infor the ~~first quarter of~~nine months ended September 30, 2001. The increase was primarily attributable to the acquisition of certain South Texas oil and gas properties in the third quarter of ~~last year.~~2001 and the related higher operating costs of properties in that region.
~~Exploration expenses.~~Exploration. Exploration expenses for the ~~first six~~nine months ofended September 30, 2002 decreased $2.4 million, or 40 percent, to ~~$2.0~~$3.7 million ~~compared with $2.5~~from $6.1 million infor the ~~first six~~nine months ofended September 30, 2001. This variance is a result of the timing and makeup of exploration activities between the two periods.
Taxes other than on income. Taxes other than on income increased $0,8 million, or 24 percent, to ~~$2.6~~$3.9 million infor the ~~first half of~~nine months ended September 30, 2002 from ~~$2.1~~$3.2 million infor the nine months ended September 30, 2001. The increase was primarily due to higher production. However, on a unit of production basis, severance and ad valorem taxes decreased due to the lower prices received for natural gas.
General and administrative. General and administrative expenses increased $2.4 million, or 69 percent, to ~~$3.9~~$6.0 million infor the ~~first half of~~nine months ended September 30, 2002 from ~~$2.0~~$3.6 million ~~in 2001. On a Mcfe basis, general and administrative expenses increased to $0.39 in 2002 as compared to $0.35 in~~for the nine months ended September 30, 2001. The increase was attributable to the acquisition of certain South Texas oil and gas properties in the third quarter of ~~last year~~2001 and personnel expenses related to our ~~anticipated~~ expansion in Gulf Coast region activity.
Impairment of oil and gas properties. Due to a downward revision of the reserve estimates of one Texas oil and gas field, we reviewed certain oil and gas properties for impairment. The carrying amount of the property exceeded the estimated undiscounted future cash flows and, consequently, we adjusted the carrying amount of this property to its fair value as determined by discounting its estimated future cash flows. As a result, we recognized a pretax charge of $0.5 million related to the impairment of oil and gas property for the nine months ended September 30, 2002.
Depreciation and depletion. Depreciation and depletion increased $9.0 million, or 91 percent, to ~~$11.9~~$19.0 million infor the ~~first six~~nine months ofended September 30, 2002 from ~~$5.5~~$10.0 million infor the nine months ended September 30, 2001. The increase was a result of higher production and the third quarter 2001 acquisition of certain South Texas oil and gas properties, ~~in the third quarter of last year and its~~which have a higher cost basis ~~of related assets.~~
than our other properties.
19
Coal Royalty and Land Management
    The coal royalty and land management segment includes PVR's mineral rights to coal reserves, its timber assets and its land assets. The assets, liabilities and earnings of PVR are included in our consolidated financial statements, with the public unitholders' 48 percent interest in PVR reflected as a minority interest.
      In January and February 2002, two of PVR's significant lessees filed for bankruptcy protection under Chapter 11 of the U. S. Bankruptcy Code. One of the lessees, Horizon Resources (formerly AEI Resources, Inc.) has reorganized, is no longer in bankruptcy and has made all payments to PVR as required under its lease on a timely basis. The other lessee, Pen Holdings, Inc. remains in bankruptcy and has paid all required post-petition minimum rental payments through June 30, 2002, while deciding whether to accept or reject PVR's lease. Pen Holdings must determine whether to accept or reject the lease by August 31, 2002. PVR continues to evaluate its business alternatives with respect to this lessee. PVR cannot be certain as to the timing or actual amount of revenues it will receive from this lessee or whether the lease will be accepted or rejected. A reduction in 2002 cash received from these lessees will cause a reduction in cash available for distribution to PVR unitholders in 2002. However, PVR believes it will be able to pay all minimum quarterly distributions on all units in 2002.
14

~~Quarter~~Three Months Ended ~~June~~September 30, 2002 Compared to ~~Quarter~~Three Months Ended ~~June~~September 30, 2001

The following table sets forth operational and financial data for the Company's coal segment for the ~~second quarter~~three months ended ~~June~~September 30, 2002 ~~compared with the same period in~~and 2001:

Operations and Financial Summary

Three Months

Ended June 30,

2002

2001
Production:

Coal tons (000's)
3,096

3,716

(in thousands, except unit cost)
Revenues:

Coal royalties (including $/ton)
$       6,693

$         2.16

$       7,928

$         2.13
Timber sales
499

-

397

-
Gain on sale of properties
-

-

-

-
Other income
599

-

572

-
            Total revenues (including $/ton)
7,791

2.52

8,897

2.39

Expenses (including $/ton):

Lease operating expenses
446

0.14

664

0.18
Taxes other than income
261

0.08

159

0.04
General and administrative
1,537

0.50

1,168

0.31
Depreciation and depletion
668

0.22

649

0.17
            Total expenses
2,912

0.94

2,640

0.70

Operating Income (including $/ton)
$       4,879

$         1.58

$       6,257

$         1.69

	Three Months
	Ended September 30		Percent
	2002	2001	Change
	(in thousands)

Coal tons	3,716	4,131	(10%)
Average royalty per ton	$ 2.22	$ 2.22	-

Revenues:
Coal royalties	$ 8,253	$ 9,154	(10%)
Timber sales	360	358	1%
Other income	1,791	462	288%
Total revenues	10,404	9,974	4%

Expenses
Operating	555	716	(22%)
Taxes other than income	241	131	84%
General and administrative	1,574	1,338	18%
Depreciation and depletion	995	845	18%
Total expenses	3,365	3,030	11%

Operating Income	$ 7,039	$ 6,944	1%

~~Revenues.~~ Coal royalties.~~Revenues in the second quarter of 2002 were $7.8 million compared with $8.9 million for the same period in 2001, representing a 12 percent decrease.~~ Coal royalty ~~revenues~~revenue for the three months ended ~~June~~September 30, 2002 ~~were $6.7~~was $8.3 million compared to ~~$7.9~~$9.2 million for the same period in 2001, a decrease of ~~$1.2~~$0.9 million, or 1610 percent. While the average ~~gross royalties~~royalty per ton remained stable over the respective periods, the production ~~from~~by PVR lessees decreased ~~17 percent. The 0.6~~0.4 million ~~tonnage decrease in lessee production was~~tons, or 10 percent, primarily due to ~~a reduction~~the bankruptcy of one of PVR's lessees in ~~general market demand for coal. The majority~~the first quarter of ~~lessees experienced reduced production for the comparable periods.~~2002.

Timber ~~revenues increased to $0.5~~sales. Timber revenue remained constant at $0.4 million for the three months ended ~~June~~September 30, 2002 ~~from $0.4 million for the same period in 2001, an increase of 26 percent.~~and September 30, 2001. Volume sold ~~was 2,676~~declined 215 thousand board feet (Mbf), or 11 percent, to 1,690 Mbf in the ~~second~~third quarter of 2002, compared with ~~2,124~~1,905 Mbf for the same period in 2001. ~~The~~This decrease was mitigated by an increase in the average ~~realized prices increased from $154~~price received, which totaled $204 per Mbf in the ~~second~~third quarter of ~~2001 to $177~~2002 compared with $154 per Mbf in the comparable period of ~~2002.~~2001. The ~~increase~~decrease in volume sold was due to the timing of parcel sales and anthe increase in the average price received ~~resulting~~primarily resulted from ~~slightly better geographic and economic conditions.~~higher quality hardwoods being sold.

Other income. Minimum rentals revenue, a component of other income, ~~remained relatively constant at $0.6~~increased to $1.1 million for the three months ended ~~June~~September 30, 2002 ~~and~~from zero in the comparable period of 2001. The ~~primary components of other income were fees generated~~increase was primarily due to a lessee rejecting a PVR lease in bankruptcy on August 31, 2002; consequently, all deferred revenue from ~~the Partnership's unit-train loadout facility, forfeited minimums received from the Partnership's lessees and miscellaneous land rentals.~~

~~Operating Costs and Expenses.~~ ~~Aggregate operating costs and expenses for the second quarter of 2002 were $2.9 million, compared with $2.6 million for the same period in 2001, an increase of $0.3~~this lessee ($0.8 million) was recognized as income. Also, coal services revenue increased $0.1 million, or ~~12 percent. The increase in operating costs and expenses related primarily to increases in general and administrative expenses.~~

~~Operating expenses (including lease operating expenses and taxes other than income) decreased by 14~~36 percent, to ~~$0.7~~$0.5 million in the ~~second~~third quarter of 2002, compared with ~~$0.8~~$0.4 million in the same period of 2001. The increase was attributable to a small preparation plant being added by one of PVR's lessees and a slight increase in throughput fees from tonnage going through PVR's loadout facility. Additionally, for the periods compared, there was a $0.1 million increase due to the timing of rebates received for the use of a specific portion of railroad by one of PVR's lessees.

Operating. Operating expenses ~~incurred~~decreased by $0.1 million, or 22 percent, to $0.6 million for the three months ended September 30, 2002, compared with $0.7 million in ~~both years were consistent~~the same period of 2001. The decrease was primarily due to less preventative maintenance necessary on certain properties.

Taxes other than income. Taxes other than income increased $0.1 million, or 84 percent, to $0.2 million for the three months ended September 30, 2002, compared with $0.1 million in the ~~amount~~same period of 2001. The variance was attributable to an increase in West Virginia franchise taxes, which was caused by a change from a corporation to a partnership structure in the last half of 2001 for the coal ~~tons produced by our lessees at $0.22 per ton.~~royalty and land management segment of the business.

General and administrative. General and administrative expenses increased ~~$0.4~~$0.2 million, or 3218 percent, into $1.6 million for the ~~second quarter of~~three months ended September 30, 2002, compared with $1.3 million for the same period of 2001. The increase was primarily attributable to recurring fees and expenses associated with being a public entity, such as director's fees, tax reporting for the ~~partnership~~partners and fees for professional services.

Depreciation and depletion. Depreciation and depletion for the ~~quarter~~three months ended ~~June~~September 30, 2002 was ~~$0.7~~$1.0 million compared with ~~$0.6~~$0.8 million for the same period of 2001, an increase of 318 percent. The increase in depreciation and depletion primarily resulted from an increase in the depletion rate per ton caused by a downward revision of coal reserves in 2001 and additional depreciation related to coal services capital projects.

~~Six~~Nine Months Ended ~~June~~September 30, 2002 Compared to ~~Six~~Nine Months Ended June 30, 2001

The following table sets forth operational and financial data for the Company's coal segment for the ~~six~~nine months ended ~~June~~September 30, 2002 ~~compared with the same period in~~and 2001:

Operations and Financial Summary

Six Months

Ended June 30,

2002

2001
Production:

Coal tons (000's)
6,898

7,551

(in thousands, except unit cost)
Revenues:

Coal royalties (including $/ton)
$     15,184

$         2.20

$     15,261

$         2.02
Timber sales
1,081

-

758

-
Gain on sale of properties
-

-

26

-
Other income
2,281

-

2,399

-
            Total revenues (including $/ton)
18,546

2.69

18,444

2.44

Expenses (including $/ton):

Lease operating expenses
1,331

0.19

1,497

0.20
Taxes other than income
422

0.06

347

0.05
General and administrative
3,084

0.45

2,333

0.31
Depreciation and depletion
1,563

0.23

1,271

0.17
            Total expenses
6,400

0.93

5,448

0.73

Operating Income (including $/ton)
$     12,146

$         1.76

$     12,996

$         1.71

	Nine Months
	Ended September 30		Percent
	2002	2001	Change
	(in thousands)

Coal tons	10,614	11,682	(9%)
Average royalty per ton	$ 2.21	$ 2.09	6%

Revenues:
Coal royalties	$ 23,437	$ 24,415	(4%)
Timber sales	1,441	1,116	29%
Other income	4,072	2,887	41%
Total revenues	28,950	28,418	2%

Expenses
Operating	1,886	2,213	(15%)
Taxes other than income	663	478	39%
General and administrative	4,658	3,671	27%
Depreciation and depletion	2,558	2,116	21%
Total expenses	9,765	8,478	15%

Operating Income	$ 19,185	$ 19,940	(4%)

~~Revenues.~~ Coal royalties.~~Revenues~~ Coal royalty revenue for the ~~six~~nine months ended ~~June~~September 30, 2002 ~~were $18.5~~was $23.4 million, compared with ~~$18.4 million for the same period in 2001, a 1 percent increase. Coal royalty revenues for the first half of 2002 were $15.2 million compared to $15.3~~$24.4 million for the same period in 2001, a decrease of ~~$0.1~~$1.0 million, or 14 percent. ~~While the~~The average ~~gross royalties~~royalty per ton increased by 96 percent over the respective periods ~~the production from lessees decreased 9 percent. The majority~~because many of lessees experienced reduced production for the comparable periods, which accounted for the 0.7 million tonnage decrease. Although lessee production decreased due to a reduction in general market demand for coal, the average gross royalty received was higher because manyPVR's lessees entered into higher priced long-term contracts in the last half of 2001. However, production from PVR's lessees decreased 1.1 million tons, or 9 percent for the respective periods due to four mines being idled and a reduction in general market demand for coal.

Timber ~~revenues~~sales. Timber revenue increased to ~~$1.1~~$1.4 million for the ~~six~~nine months ended ~~June~~September 30, 2002 from ~~$0.8~~$1.1 million for the same period in 2001, an increase of 43$0.3 million, or 29 percent. Volume sold ~~was 5,802~~increased 1,613 Mbf, or 27 percent, to 7,492 Mbf in the first ~~half~~nine months of 2002 ~~compared with 3,974~~from 5,879 Mbf for the same period in 2001. The increase in volume sold was due to the timing of parcel sales. In addition, an increase of 17 percent in the average price received primarily resulted from higher quality hardwoods being sold during the 2002 period.

Other income. Minimum rentals revenue, a component of other income, ~~remained relatively constant at $2.3 million compared~~increased to ~~$2.4~~$2.0 million for the ~~six~~nine months ended ~~June~~September 30, 2002 ~~and 2001, respectively. The primary components of other income were fees generated~~ from ~~the Partnership's unit-train loadout facility (coal services), forfeited minimums received from the Partnership's lessees and miscellaneous land rentals. Coal services revenue decreased to~~ $0.9 ~~million~~ in ~~the first half of 2002 from $1.0 million for~~ the comparable period of ~~2001, representing~~2001. The increase was primarily due to a 14lessee rejecting PVR's lease in bankruptcy on August 31, 2002; consequently, all deferred revenue from this lessee ($0.8 million) was recognized as income. Additionally, for the periods compared there was a $0.1 million increase due to the timing of rebates received for the use of a specific portion of railroad by one of PVR's lessees.

Operating. Operating expenses decreased by $0.3 million, or 15 percent, ~~decrease.~~to $1.9 million for the nine months ended September 30, 2002, compared with $2.2 million in the same period of 2001. The decrease ~~related primarily~~was due to ~~one of our~~fewer tons mined by lessees ~~entering into industrial contracts, which allows a portion of their production to be hauled by truck~~on PVR subleased properties and ~~by-pass our unit-train loadout facility.~~less preventative maintenance necessary on certain properties.

~~Operating Costs and Expenses.~~Taxes other than income. ~~Aggregate operating costs and expenses~~Taxes other than income increased $0.2 million, or 39 percent, to $0.7 million for the ~~first half of~~nine months ended September 30, 2002, ~~were $6.4 million,~~ compared with ~~$5.4~~$0.5 million in the same period of 2001. The variance was attributable to an increase in West Virginia franchise taxes, which was caused by a change from a corporate structure to a partnership structure in the third quarter of 2001 for the coal royalty and land management segment of the business.

General and administrative. General and administrative expenses increased to $4.7 million for the nine months ended September 30, 2002 from $3.7 million for the same period in 2001, an increase of $1.0 million, or 1727 percent. ~~The increase in operating costs and expenses primarily related to increases in general and administrative expenses.~~

Operating expenses (including lease operating expenses and taxes other than income) remained relatively stable at $1.8 million for the six months ended June 30, 2002 and 2001. The expenses incurred in both years were consistent with the amount of coal tons produced by our lessees at $0.25 per ton.

~~General and administrative expenses increased $0.8 million, or 32 percent, in the first half of 2002, compared with the same period of 2001.~~ The increase was primarily attributable to recurring fees and expenses associated with being a public entity, such as director's fees, tax reporting for the ~~partnership~~partners and fees for professional services.

Depreciation and depletion. Depreciation and depletion for the ~~six~~nine months ended ~~June~~September 30, 2002 was ~~$1.6~~$2.6 million compared with ~~$1.3~~$2.1 million for the same period of 2001, an increase of 2321 percent. The increase in depreciation and depletion resulted from an increase in the depletion rate per ton caused by a downward revision of coal reserves in 2001 and additional depreciation related to coal services capital projects.

~~Capital Expenditures, Capital Resources and Liquidity~~

~~Cash Flows from Operating Activities~~

Corporate and Other

Revenues and expenses not directly related to either the oil and gas or coal royalty and land management segments are classified as corporate and other (or "All Other" in footnote 9. Segment Information in the accompanying unaudited financial statements).

For the three months ended September 30, 2002, net operating expenses related to corporate and other activities amounted to $2.0 million compared with $1.1 million for the same period of 2001, for an expense increase of $0.9 million, or 85 percent, primarily due to increased expenses related to the consideration of various shareholder proposals.

For the nine months ended September 30, 2002, net operating expenses related to corporate and other activities amounted to $4.9 million compared with $2.4 million for the same period of 2001, for an expense increase of $2.5 million, or 105 percent, primarily due to increased expenses related to the consideration of various shareholder proposals.

Liquidity and Capital Resources

Funding for our activities has historically been provided by operating cash flows and bank borrowings. Net cash provided by operating activities was ~~$22.7~~$41.2 million infor the ~~first six~~nine months ofended September 30, 2002, compared with ~~$26.2~~$27.9 million for the nine months ended September 30, 2001. Excluding a pre-tax gain of $54.7 million on the sale of 3.3 million shares of Norfolk Southern Corporation common stock in ~~the first six months of 2001. The decrease was~~April 2001, cash flows from operating activities decreased primarily due to ~~lower natural gas prices and increased~~the added expenses ~~due to~~related the acquisition of certain South Texas oil and gas properties in the third quarter of 2001.

1722

~~Cash Flows from Investing Activities~~

~~During~~For the ~~first half of~~nine months ended September 30, 2002, we used ~~$19.6~~$32.0 million in investing activities, compared with ~~$4.3~~$120.7 million ~~provided by investing activities in~~for the ~~first half of~~nine months ended September 30, 2001. Additions to property and equipment totaled ~~$21.3~~$45.7 million infor the ~~first half of~~nine months ended September 30, 2002, compared with ~~$55.0~~$180.2 million in the same period in 2001. The 2001 additions included the effects of the acquisition of certain South Texas oil and gas properties in the third quarter of 2001. The following table sets forth additions to property and equipment made during the periods indicated.

	Six Months		Nine Months
	Ended June 30,		Ended September 30,
	2002	2001	2002	2001
	(in thousands)		(in thousands)
Oil and gas
Development drilling	$ 17,130	$ 13,986	$ 25,271	$ 25,762
Exploratory drilling	554	1,575	1,056	6,677
Lease acquisitions	1,531	5,675	4,718	113,442
Support equipment and facilities	998	137
Seismic	1,789	905
Field projects			1,497	538
Seismic and other *			3,578	1,759
Oil and gas capital expenditures	22,002	22,278	36,120	148,178

Coal royalty and land management
Coal royalty and land management (PVR)
Lease acquisitions	80	33,257	12,129	33,320
Support equipment and facilities	701	300	758	399
Coal royalty and land management capital expenditures	781	33,557	12,887	33,719

Other	268	41	310	100

Total capital expenditures	23,051	55,876	49,317	181,997
Less: Seismic	(1,789)	(905)
Less: Seismic and other *			(3,578)	(1,759)
Additions to property and equipment	$ 21,262	$ 54,971	$45,739	$ 180,238

* Included in exploration expense on the consolidated statements of income.

We drilled 6374 gross ~~(48.6)~~(53.2 net) wells infor the ~~first six~~nine months ofended September 30, 2002, compared to 77128 gross ~~(61.6~~(100.3 net) wells in the same period in 2001. All wells drilled in 2002 were development wells, including 71 gross successful wells and three gross wells that were unsuccessful for a success rate of 96 percent. Capital expenditures for the remainder of ~~fiscal~~ year ~~2002, before lease and proved property acquisitions,~~ are expected to be ~~$24~~$28.5 to ~~$28~~$32.0 million, predominantly for the drilling of exploration and ~~the~~ development of wells in the oil and gas segment ~~with approximately $0.2 million allocated~~($17.5 to ~~the coal royalty~~$20.0 million), lease acquisitions and ~~land management segment. In addition, we plan~~support equipment ($4.1 to ~~invest $4 to $5 million in the~~$4.3 million), acquisition and evaluation of seismic ~~data. We plan~~data ($2.2 to ~~drill approximately 45~~$2.5 million), and the purchase of mining-related infrastructure in PVR ($4.8 to ~~55 gross (18 to 27 net) wells during the remainder of 2002.~~$5.0 million). We continually review drilling expenditures and may increase, decrease or reallocate amounts based on industry conditions. We believe our cash flow from operations and sources of debt financing are sufficient to fund our total 2002 planned capital expenditure program.

~~Cash Flows from Financing Activities~~ As of September 30, 2002, we had approximately $63 million of unproved leasehold costs included in oil and gas properties on our consolidated balance sheet. We expect to complete our evaluation of our unproved leaseholds over the next two to three years. We assess our unproved leasehold costs on a property by property basis and a loss is recognized to the extent, if any, the cost of unproved leasehold has been impaired. Unproved leasehold costs for projects that are determined to be productive are transferred to proved leaseholds in the oil and gas properties section of our consolidated balance sheet.

Net cash used in financing activities totaled ~~$0.8~~$9.5 million infor the ~~six~~nine months ofended September 30, 2002, compared to ~~$30.6~~$92.0 million net cash ~~used in~~provided by financing activities in the same period in 2001. In addition to cash flow from operating activities, for the ~~first six~~nine months ofended September 30, 2002, we received ~~$9.3~~$6.3 million in proceeds from borrowing, which was used to finance capital expenditures. ~~Dividends~~Proceeds from borrowings in 2001 were used to ~~our shareholders~~finance the third quarter 2001 acquisition of certain South Texas oil and ~~distributions to minority interest holders in PVR were also paid.~~gas properties.

Penn Virginia has a $150 million secured revolving credit facility (the "Revolver") with a final maturity of October 2004. The Revolver currently has a borrowing base of $140 million and we had ~~$14.0~~borrowed $11.0 million ~~borrowed~~ against it as of ~~June~~September 30, 2002. We have the option to elect interest at (i) LIBOR plus a Eurodollar margin ranging from 1.375 to 1.875 percent, based on the percentage of the borrowing base outstanding or (ii) the greater of the prime rate or federal funds rate plus a margin ranging from 0.375 to 0.875 percent. The Revolver contains financial covenants requiring the Company to maintain certain levels of net worth and to comply with certain debt-to-capitalization and dividend limitation restrictions, among other requirements. We are currently in compliance with all of the covenants in the Revolver. We also currently have a $5$5.0 million line of credit ~~with a financial institution~~and we had borrowed $15 thousand against it as of September 30, 2002. The line of credit is due in ~~December 2002,~~March 2003, renewable annually.

The Partnership has a credit ~~agreement~~facility expiring in October 2004 comprised of a $50 million unsecured revolving credit loan (the "Partnership Revolver"), which was undrawn as of ~~June~~September 30, 2002, and a $43.4 million term loan (the "Term Loan"), $31.4 million of the $43.4 million outstanding under the term loan at September 30, 2002 was secured by ~~restricted U.S. Treasury Notes, which was fully drawn in the amount of $43.4 million as of June 30, 2002.~~United States treasury securities. The Partnership Revolver ~~includes~~provides for the option to elect interest at (i) LIBOR plus a Euro-rate margin ranging from 1.25 percent to 1.75 percent, based on certain financial data or (ii) the greater of the prime rate or federal funds rate plus 0.5 percent. The Partnership has the option to elect interest on the ~~term loan~~secured portion of the Term Loan at (i) LIBOR plus a Euro-rate margin of 0.5 percent, based on certain financial data or (ii) the greater of the prime rate or federal funds rate plus 0.5 percent. The unsecured portion of the Term Loan has the same interest rate election options as the Partnership Revolver. The financial covenants of the Partnership's credit ~~agreement~~facility include, but are not limited to, maintaining: (i) a ratio of not more than 2.5:1.0 of total debt to consolidated EBITDA (as defined by the credit ~~agreements)~~facility) and (ii) a ratio of not less than 4.00:1.00 of consolidated EBITDA to fixed charges. The Partnership is currently in compliance with all of its covenants.

In January and February 2002, two of PVR's lessees filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. One of the lessees, Horizon Resources (formerly AEI Resources, Inc.), has reorganized, is no longer in bankruptcy and has made all payments to PVR as required by its lease. The other lessee, Pen Holdings, Inc., remains in bankruptcy and idled operations on PVR's property in March 2002. Pen Holdings paid all required $200 thousand per month post-petition minimum rental payments through August 31, 2002, the date on which PVR recovered its lease from Pen Holdings. Pen Holdings made an additional payment of $200 thousand to PVR in October 2002 in connection with PVR entering into an agreement whereunder PVR agreed to purchase certain infrastructure-related equipment and other assets integral to mining at Fork Creek for approximately $4.8 million plus approximately $0.6 million of stream mitigation obligations and the assumption of reclamation permits associated with the property, which PVR intends to assign to the next lessee of the property. The United States Bankruptcy Court for the Middle District of Tennessee issued an order approving Pen Holdings' sale of the Fork Creek assets to PVR on October 23, 2002. Unless the order is appealed or amended, it will become final in early November 2002, and PVR expects to close the transaction promptly thereafter. The purchase would be funded from the sale of U.S. Treasury notes held by PVR. PVR is currently seeking to find a lessee to replace Pen Holdings and is optimistic that a lessee will be found in the near future. However, PVR may not be able to find a replacement lessee and, if PVR does find a replacement lessee, it may not be able to enter into a new lease on favorable terms within a reasonable period of time. If PVR enters into a new lease, the replacement operator might not achieve the same levels of production or sell coal at the same price as did Pen Holdings at the inception of the Pen Holdings lease.

Management believes its sources of funding are sufficient to meet short and long-term liquidity needs ~~not funded by cash flows from operations.~~
of the Company.

Legal and Environmental

Mountaintop Removal Litigation. On May 8, 2002, the United States District Court for the Southern District of West Virginia ~~ruled that~~issued an order, which it thereafter clarified in response to defendants' motion to do so, enjoining the Huntington, West Virginia office of the U.S. Army Corps of Engineers from issuing permits under Section 404 of the Clean Water Act ~~does not permit placement~~for the construction of ~~coal~~valley fills for the disposal of overburden ~~which~~from mining operations. These valleys typically contain streams that, under the ~~Court described as "waste," in~~Clean Water Act, are considered navigable waters of the United States. ~~This decision currently makes it virtually impossible~~The court held that the filling of these waters with overburden solely for ~~coal mining operators~~waste disposal is a violation of the Clean Water Act. If the injunction is not overturned by an appellate court or subsequent legislation, PVR's lessees may not be able to obtain permits ~~for valley fills~~ in ~~West Virginia. While PVR is not a party~~many cases to ~~this litigation, virtually all mining operators, including PVR's lessees,~~ use ~~valley fills to dispose of excess mining materials. Accordingly, the coal mining industry, including the~~these common fill activities, which could render their mining operations uneconomical. Any consequent reduction or cessation of their operations would reduce mining on PVR's ~~lessees, could be significantly adversely affected if this ruling is not overturned or legislation is not passed which limits~~properties and PVR's coal royalty revenue.

Legislation of Weight. During its ~~impact. The ruling has been appealed to~~2002 session, the ~~United States Fourth Circuit Court of Appeals.~~

~~Upon receiving a report and recommendations from the Truck Safety Task Force,~~ West Virginia ~~Governor Wise called a special session~~House of Representatives considered legislation that, if passed, would have significantly increased the scope of powers available to enforce the current weight restrictions on trucks carrying coal. Past sessions of the legislature ~~in July 2002~~have considered, but not adopted, similar legislation. The legislature and the governor appointed a task force to ~~approve~~study the issue, and the task force issued a report recommending legislation ~~addressing~~that would raise the weight limits on the trucks, but also would increase the number of ~~trucks transporting coal. After four days of debate~~required safety inspections and the ~~adoption~~amounts of ~~an amendment to~~registration fees and fines imposed for violations. The legislature has not yet acted on this recommendation. If there is increased enforcement of existing weight restrictions, the Governor's proposed bill which would have lowered the proposed 120,000 pound weight limit back to the current 80,000 pound limit, the legislature adjourned without taking any action on the matter. This issue remains controversial in West Virginia and will most likely be the subject of future legislative proposals. If trucking weight limits are not increased, PVR's lessees' costs of transporting coal in the state would increase. An increase in transportation ~~will increase, which~~costs could have an adverse effect on PVR's ~~revenues and its~~ lessees' ability to increase or to maintain production on PVR's ~~properties.~~
properties and a similar adverse effect on PVR's coal royalty revenue.

Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143, Accounting for Asset Retirement Obligations. This ~~Statement~~statement requires companies to record a liability relating to the future retirement and removal of assets used in their business. The liability is discounted to its present value, and the related asset value is increased by the amount of the resulting liability. Over the life of the asset, the liability will be accreted to its future value and eventually extinguished when the asset is taken out of service. The provisions of this ~~Statement~~statement are effective for fiscal years beginning after June 15, 2002. We are currently evaluating the ~~effects~~future financial reporting effect of ~~this pronouncement.~~adopting SFAS No. 143 and will complete such assessment during the fourth quarter of 2002. We will adopt the standard effective January 1, 2003.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. This statement rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment of Debt, which required all gains and losses from extinguishment of debt to be aggregated and, if material, classified as an extraordinary item of debt to be aggregated and, if material, classified as an extraordinary item, net of income taxes. As a result, the criteria in Accounting Principles Board Opinion (APB) Opinion No. 30 will now be used to classify those gains and losses. Any gain or loss on the extinguishment of debt that was classified as an extraordinary item in prior periods presented that does not meet the criteria in APB Opinion No. 30 for classification as an extraordinary item shall be reclassified. The provisions of this ~~Statement~~statement are effective for fiscal years beginning after January 1, 2003. ~~We are currently evaluating~~Under present conditions, management does not expect the ~~effects~~initial adoption of ~~this pronouncement.~~SFAS No. 145 to have a material effect on the financial position, results of operations or liquidity of the Company.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This ~~Statement~~statement requires the recognition of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. The provisions of this ~~Statement~~statement are effective for exit or disposal activities initiated after December 31, 2002. ~~We are currently evaluating~~Under present conditions, management does not expect the ~~effects~~initial adoption of ~~this pronouncement.~~
SFAS No. 146 to have a material effect on the financial position, results of operations or liquidity of the Company.

Quantitative and Qualitative Disclosures about Market Risk

Our price risk management program permits the utilization of fixed-price contracts and financial instruments (such as futures, forward and option contracts and swaps) to mitigate the price risks associated with fluctuations in natural gas and crude oil prices as they relate to our anticipated production. These contracts and financial instruments are designed as cash flow hedges and accounted for in accordance with SFAS No. 133, as amended by SFAS No. 137 and SFAS No. 138. The derivative financial instruments are placed with major financial institutions that we believe are of minimum credit risk. The fair value of our price risk management assets and liabilities are significantly affected by energy price fluctuations. The following table sets forth our positions as of September 30, 2002:

	Notional	Fixed Price or
Time Period	Quantities	Effective Floor/Ceiling Price	Fair Value
			(in thousands)
Natural Gas	(MMbtu per Day)
Costless collars
October 1 - December 31, 2002	2,301	$4.00 / $5.70	$ 56
October 1 - December 31, 2002	1,315	$4.00 / $6.25	34
November 1 - December 31, 2002	8,000	$2.96 / $5.05	(74)
January 1 - March 31, 2003	10,000	$2.96 / $5.05	(253)
January 1 - September 30, 2003	5,000	$3.47 / $5.20	(84)
April 1- October 31, 2003	5,000	$2.92 / $4.42	(325)

Crude Oil	(Bbls per Day)
Costless collars
October 1 - December 31, 2002	263	$20.00 / $24.50	(177)
October 1 - December 31, 2002	197	$22.00 / $26.60	(85)
October 1 - December 31, 2002	303	$22.00 / $26.20	(89)
January 1 - September 30, 2003	500	$23.00 / $28.75	(60)

Total			$ (1,057)

Based upon our assessment of our derivative contracts at September 30, 2002, we reported (i) an approximate liability of $1.2 million and an asset of $0.1 million and (ii) a loss in accumulated other comprehensive income of $0.8 million, net of related income taxes of $0.4 million. In connection with monthly settlements, we recognized net hedging losses in natural gas and oil revenues of $0.4 million for the nine months ended September 30, 2002. Based upon future oil and natural gas prices as of September 30, 2002, $1.1 million of hedging losses are expected to be realized within the next 13 months. The amounts ultimately realized will vary due to changes in the fair value of the open derivative contracts prior to settlement. Market risk is the risk of loss arising from adverse changes in market rates and prices. The principal market risks to which PVR is exposed are interest rate risk and coal price risks. PVR's current term loan debt is partially secured by U.S. Treasury notes and has limited interest risk exposure. However, debt incurred in the future under the current PVA and PVR credit ~~facility~~facilities will bear variable interest at either the applicable base rate or a rate based on LIBOR.

From a PVR perspective, we are also exposed to credit risk if lessees do not manage their operations and finances well or if there is a significant decline in coal prices. Lessees may not be able to pay their debts as they become due or coal royalty revenues could decrease due to decreased production volumes. See Item 2. "Liquidity and Capital Resources" for a discussion of recent occurrences related to credit risk.

Forward-Looking Statements

Statements included in this report which are not historical facts (including any statements concerning plans and objectives of management for future operations or economic performance, or assumptions related thereto) are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. In addition, ~~Penn Virginia~~we and our representatives may from time to time make other oral or written statements that are also forward-looking statements.

Such forward-looking statements include, among other things, statements regarding development activities, capital expenditures, acquisitions and dispositions, drilling and exploration programs, expected commencement dates ~~of oil~~ and ~~natural gas production,~~ projected quantities of future oil and natural gas production by Penn Virginia, expected commencement dates and projected quantities of future coal production by lessees producing coal from reserves leased from PVR and costs and expenditures, as well as projected demand, or supply, for coal and oil and natural gas, all of which may affect sales levels, prices and royalties realized by Penn Virginia and PVR.

These forward-looking statements are made based upon management's current plans, expectations, estimates, assumptions and beliefs concerning future events impacting Penn Virginia and PVR and, therefore, involve a number of risks and uncertainties. Penn Virginia cautions that forward-looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements.

Important factors that could cause the actual results of operations or financial condition of Penn Virginia to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to: the cost of finding and successfully developing oil and natural gas reserves; the cost to PVR of finding new coal reserves; the ability of Penn Virginia to acquire new oil and natural gas reserves and of PVR to acquire new coal reserves on satisfactory terms; the price for which such reserves can be sold; the volatility of commodity prices for oil and natural gas and coal; the risks associated with having or not having price risk management programs; PVR's ability to lease new and existing coal reserves; the ability of PVR's lessees to produce sufficient quantities of coal on an economic basis from PVR's reserves; the ability of lessees to obtain favorable contracts for coal produced from PVR's reserves; Penn Virginia's ability to obtain adequate pipeline transportation capacity for its oil and natural gas production; competition among producers in oil and natural gas industries generally and in the coal industry generally and in Appalachia in particular; the extent to which the amount and quality of actual production differs from estimated recoverable ~~coal reserves~~ and proved oil and natural gas reserves and coal reserves; unanticipated geological problems; availability of required

materials and equipment; the occurrence of unusual weather or operating conditions including force majeure events; the failure of equipment or processes to operate in accordance with specifications or expectations; delays in anticipated start-up dates of ~~PVR's lessees' mining operations and~~ Penn Virginia's oil and natural gas ~~production;~~production and PVR's lessees' mining operations; environmental risks affecting the drilling and producing of oil and natural gas wells or the mining of coal reserves; the timing of receipt of necessary governmental permits by Penn Virginia and PVR's lessees; labor relations and costs; accidents; changes in governmental regulation or enforcement practices, especially with respect to environmental, health and safety matters, including with respect to emissions levels applicable to coal-burning power generators; uncertainties relating to the outcome of mountaintop removal litigation and issues regarding coal truck weight restriction enforcement and legislation; risks and uncertainties relating to general domestic and international economic (including inflation and interest rates) and political conditions; and the experience and financial condition of the lessees of PVR's coal reserves, including their ability to satisfy their royalty, environmental, reclamation and other obligations to PVR and others. Many of such factors are beyond Penn Virginia's ability to control or predict. Readers are cautioned not to put undue reliance on forward-looking statements.

While Penn Virginia periodically reassesses material trends and uncertainties affecting Penn Virginia's results of operations and financial condition in connection with the preparation of Management's Discussion and Analysis of Results of Operations and Financial Condition and certain other sections contained in Penn Virginia's quarterly, annual or other reports filed with the Securities and Exchange Commission, Penn Virginia does not undertake any obligation to review or update any particular forward-looking statement, whether as a result of new information, future events or otherwise.

2127

PART ~~II.~~II Other ~~information~~Information

Items 1, 2, 3 and 5 are not applicable and have been omitted.

Item 4. ~~Submission of Matters to a Vote of Security Holders~~Controls and Procedures

(a) ~~The annual meeting~~Evaluation of ~~shareholders~~Disclosure Controls and Procedures:

Within the 90 day period prior to the filing date of ~~Penn Virginia Corporation~~this Quarterly Report on Form 10-Q, the Company, under the supervision, and with the participation, of its management, including its principal executive officer and principal financial officer, performed an evaluation of the design and operation of the Company's disclosure controls and procedures (as defined in Securities and Exchange Act Rule 13a-14(c)). Based on that evaluation, the Company's principal executive officer and principal financial officer concluded that such disclosure controls and procedures are effective to ensure that material information relating to the Company, including its consolidated subsidiaries, is accumulated and communicated to the Company's management and made known to the principal executive officer and principal financial officer, particularly during the period for which this periodic report was ~~held on May 7, 2002.~~being prepared.

(b) ~~All director nominees~~Changes in Internal Controls

No significant changes were ~~elected as~~made in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the evaluation described in Item ~~4(c)~~4(a).

(c) The shareholders approved a proposal to amend the Company's 1999 Employee Stock Incentive Plan to increase the number of shares of the Company's Common Stock issuable thereunder from 250,000 to 800,000 and voted upon the election of directors as follows:

~~Management Proposal to Amend Plan~~

Votes Cast

For
Against
Abstain
Broker
Nonvotes

5,291,312
1,253,760
216,102
1,314,190

~~Election of Directors~~

Director
Votes Received

Votes Withheld

Richard A. Bachmann

7,521,823

553,541
Edward B. Cloues, II
7,528,295

547,069
A. James Dearlove
7,186,119

889,245
Robert Garrett
7,529,821

545,543
Keith D. Horton
7,532,185

543,179
Peter B. Lilly
7,522,327

553,037
Marsha R. Perelman
7,524,578

550,786
Joe T. Rye
7,532,025

543,339

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

99.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes-

Oxley Act of 2002

99.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes-

Oxley Act of 2002

(b) Reports on Form 8-K

On May 3, 2002, Penn Virginia filed a report on Form 8-K. The report involved the dismissal of Arthur Andersen LLC, and the engagement of KPMLG LLP, as the Company's independent public accountants for the year ending December 31, 2002. The Form 8-K was filed under "Item 4. Changes in Registrant's Certifying Accountants." None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



PENN VIRGINIA CORPORATION


Date:	~~August 14,~~November 1, 2002	By:	/s/ Frank A. Pici
			Frank A. Pici
			Executive Vice President and
			Chief Financial Officer



Date:	~~August 14,~~November 1, 2002	By:	/s/ Dana GG. Wright
			Dana GG. Wright, Vice President and
			Principal Accounting Officer

~~PENN VIRGINIA CORPORATION~~

~~INDEX~~29

~~PART I~~CERTIFICATIONS ~~Financial Information~~		~~PAGE~~

~~Item 1. Financial Statements~~

~~Condensed Consolidated Statements of Income for the three~~ ~~and six months ended June 30, 2002 and 2001~~	2

~~Condensed Consolidated Balance Sheets as of June 30, 2002~~ ~~and December 31, 2001~~	3

~~Condensed Cash Flow Statements for the~~ ~~three and six months ended June 30, 2002 and 2001~~	5

~~Notes to Condensed Consolidated Financial Statements~~	6

~~Item 2. Management's Discussion and Analysis of Financial~~ ~~Condition and Results of Operations~~	11

~~PART II~~ ~~Other Information~~

~~Item 4. Submission of Matters to a Vote of Security Holders~~	22

~~Item 6. Exhibits and Reports on Form 8-K~~	22

I, A. James Dearlove, President and Chief Executive Officer of Penn Virginia Corporation (the "Registrant"), certify that:

1. I have reviewed this quarterly report on Form 10-Q of the Registrant;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state

a material fact necessary to make the statements made, in light of the circumstances under which such statements were

made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly

present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and

for, the periods presented in this quarterly report;

4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

a)       designed such disclosure controls and procedures to ensure that material information relating to the
          Registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
          particularly during the period in which this quarterly report is being prepared;
b)       evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90
          days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c)       presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and
          procedures based on our evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's

auditors and the audit committee of Registrant's board of directors:

a)       all significant deficiencies in the design or operation of internal controls which could adversely affect the
          Registrant's ability to record, process, summarize and report financial data and have identified for the
          Registrant's auditors any material weaknesses in internal controls; and
b)       any fraud, whether or not material, that involves management or other employees who have a significant
          role in the Registrant's internal controls; and

6. The Registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant

changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of

our most recent evaluation, including any corrective actions with regard to significant deficiencies and material

weaknesses.

Date: November 1, 2002

/s/ A. James Dearlove

A. James Dearlove

President and Chief Executive Officer

I, Frank A. Pici, Executive Vice President and Chief Financial Officer of Penn Virginia Corporation (the "Registrant"), certify

that:

1. I have reviewed this quarterly report on Form 10-Q of the Registrant;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state

a material fact necessary to make the statements made, in light of the circumstances under which such statements were

made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly

present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and

for, the periods presented in this quarterly report;

4. The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and

procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

a)      designed such disclosure controls and procedures to ensure that material information relating to the
         Registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
         particularly during the period in which this quarterly report is being prepared;
b)     evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90
        days prior to the filing date of this quarterly report (the "Evaluation Date"); and
c)     presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based
        on our evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the

audit committee of Registrant's board of directors:

a)       all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's
          ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any
           material weaknesses in internal controls; and
b)       any fraud, whether or not material, that involves management or other employees who have a significant role in the
           Registrant's internal controls; and

6. The Registrant's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in

internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent

evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 1, 2002

/s/ Frank A. Pici

Frank A. Pici

Executive Vice President and Chief Financial Officer

	June 30,	December 31,
	2002	2001


ASSETS

Current assets
Cash and cash equivalents	$ 11,799	$ 9,621
Accounts receivable	14,773	15,403
Current portion of long-term notes receivable	505	599
Price risk management assets	284	3,674
Other	1,229	1,105
Total current assets	28,590	30,402


Property and equipment
Oil and gas properties (successful efforts method)	354,589	335,494
Other property and equipment	120,597	117,789
Less: Accumulated depreciation, depletion and amortization	(85,732)	(72,095)
Net property and equipment	389,454	381,188

Restricted U.S. Treasury Notes	43,387	43,387
Other assets	5,260	5,194

Total assets	$ 466,691	$ 460,171

	September 30,	December 31,
	2002	2001
	(Unaudited)

ASSETS

Current assets
Cash and cash equivalents	$ 9,377	$ 9,621
Accounts receivable	16,816	15,403
Current portion of long-term notes receivable	516	599
Price risk management assets	142	3,674
Other	705	1,105
Total current assets	27,556	30,402


Property and equipment
Oil and gas properties (successful efforts method)	366,412	335,494
Other property and equipment	132,732	117,789
Less: Accumulated depreciation, depletion and amortization	(93,870)	(72,095)
Net property and equipment	405,274	381,188

Restricted U.S. Treasury Notes	31,387	43,387
Other assets	5,039	5,194

Total assets	$ 469,256	$ 460,171

	Three Months Ended	Nine Months Ended
	September 30, 2001	September 30, 2001

Revenues	$ 23,718	$ 92,534
Net income	$ 3,680	$ 66,377
Net income per share, diluted	$ 0.41	$ 7.47

		Coal Royalty				Coal Royalty
		and Land	All			and Land	All
	Oil and Gas	Management	Other	Consolidated	Oil and Gas	Management	Other	Consolidated
	(in thousands)				(in thousands)
For the six months ended June 30, 2002:
For the three months ended September 30, 2002:
Revenues					$ 18,182	$ 10,404	$ 168	$ 28,754
Operating costs and expenses					7,823	2,370	2,126	12,319
Depreciation, depletion and amortization					7,098	995	53	8,146
Impairment of oil and gas properties					501	-	-	501
Operating income (loss)					$ 2,760	$ 7,039	$ (2,011)	7,788
Interest expense								(707)
Interest and other income								508
Income from continuing operations
before minority interest and taxes								$ 7,589
Additions to property and equipment					$ 12,329	$ 12,106	$ 42	$ 24,477


For the three months ended September 30, 2001:
Revenues	$ 30,994	$ 18,546	$ 491	$ 50,031	$ 13,691	$ 9,974	$ 366	$ 24,031
Operating costs and expenses	12,263	4,837	3,626	20,726	8,169	2,185	1,435	11,789
Depreciation, depletion and amortization	11,943	1,563	106	13,612	4,537	845	19	5,401
Operating income (loss)	$ 6,788	$ 12,146	$ ( 3,241)	$ 15,693	$ 985	$ 6,944	$ (1,088)	6,841
Interest expense				(959)				(721)
Interest income				1,075
Income from continuing operations
before minority interest and taxes				$ 15,809
Identifiable assets	$ 294,585	$ 165,344	$ 6,762	$ 466,691


For the six months ended June 30, 2001:
Revenues	$ 32,636	$ 18,444	$ 782	$ 51,862
Operating costs and expenses	8,449	4,177	2,178	14,804
Depreciation, depletion and amortization	5,450	1,271	40	6,761
Operating income (loss)	$ 18,737	$ 12,996	$ (1,436)	$ 30,297
Interest expense				(1,096)
Gain on sale of securities				54,688
Interest and other income				844				371
Income before taxes				$ 84,733				$ 6,491
Identifiable assets	$ 160,616	$ 111,874	$ 1,202	$ 273,692
Additions to property and equipment					$ 125,046	$ 162	$ 59	$ 125,267

Revenues
Natural gas	$ 48
Oil and condensate	332
Total revenues	380
Expenses
Operating expenses	352
Depreciation, depletion and amortization	25
Total expenses	377
Income from discontinued operations	3
Gain on sale of properties	337
	340
Income taxes	(119)
Net income from discontinued operations	$ 221

Votes Cast
For	Against	Abstain	Broker Nonvotes

5,291,312	1,253,760	216,102	1,314,190

Director	Votes Received	Votes Withheld
Richard A. Bachmann	7,521,823	553,541
Edward B. Cloues, II	7,528,295	547,069
A. James Dearlove	7,186,119	889,245
Robert Garrett	7,529,821	545,543
Keith D. Horton	7,532,185	543,179
Peter B. Lilly	7,522,327	553,037
Marsha R. Perelman	7,524,578	550,786
Joe T. Rye	7,532,025	543,339