Penn West Petroleum announces another $175 million in asset sales

CALGARY – Oil and gas producer Penn West Petroleum Ltd. (TSX:PWT) has reached an agreement to sell another $175 million in non-core Alberta assets, adding to the $486 million in deals it closed late last year.

The properties in central and southern Alberta produce about 6,700 barrels of oil equivalent per day and are 58 per cent weighted toward natural gas.

In a release Tuesday, Penn West said the latest transactions are expected to close in mid-March. It did not identify the buyer.

In unveiling a strategic revamp in November, Penn West said it intended to sell between $1.5 billion and $2 billion in assets before the end of 2014.

“Penn West’s (acquisition and divestiture) teams continue to actively pursue further divestments and remain encouraged by our demonstrated ability to get deals done,” the company said.

Taking into account the dispositions so far, Penn West says its 2014 production is expected at between 101,000 and 106,000 barrels of oil equivalent per day, down from an earlier range of 105,000 to 110,000.

Capital spending for 2013 was $816 million, lower than the $900 million Penn West had earlier anticipated.

Its year-end 2013 total debt was $2.9 billion.

Last year, Penn West dramatically cut its workforce, replaced its CEO, halved its dividend and appointed former Suncor CEO Rick George as chairman of the board.

Shares in Penn West were down two per cent at $9.03 on the Toronto Stock Exchange on Tuesday.