Penn West Announces Disposition Of Non-Core Assets - Quick Facts

(RTTNews) - Penn West Petroleum Ltd. (PWE, PWT.TO) Thursday said it has signed an agreement to sell non-core assets located in south central Alberta for expected proceeds of around $355 million to a private company.

The assets are currently producing about 7,500 barrels of oil equivalent per day.

The disposition represents less than 5 percent of the company's proved and probable reserve base, estimated at December 31, 2013, to be 625 million barrels of oil equivalent.

The company expects the transaction to close in early December 2014. CIBC World Markets Inc. acted as financial advisor to Penn West on the deal.

The sale provides attractive sale metrics of approximately $47,000 per flowing barrel. The disposition further reduces Penn West's well bore count by around 2,250 gross wells, which is expected to have a favourable impact on the company's asset retirement obligation.

These assets are considered non-core to Penn West and were not allocated any current or future development capital under the company's long-term plan.

Dave Roberts, President and CEO said, "...We are now directing our disposition efforts to non-producing assets as we continue to increase the focus on our core areas and improve our financial flexibility through a considerably stronger balance sheet."

Including the impact of this disposition, Penn West reiterated full year production guidance of 101,000 - 106,000 boe per day, weighted approximately 66 percent to oil and liquids.

However, the company now expects full year average volumes for 2014 to be above the mid-point of this range, reflecting better than expected performance and reliability in base production and strong performance in new production growth from development programs in each of its three core light oil areas.