Penn West Petroleum Turns To Profit In Q3 - Quick Facts

(RTTNews) - Penn West Petroleum Ltd. (PWT.TO, PWE) reported third-quarter net and comprehensive income of C$27 million, compared to a loss of C$67 million, last year. Profit per share was C$0.06, compared to a loss of C$0.14 per share, a year ago. Funds flow per share was C$0.60, compared to C$0.72, a year ago.

Oil and natural gas sales decreased to C$779 million, from C$785 million, last year.

The company also announced the results of its strategic review process and details of its long-term plan, an update on asset dispositions as well as 2014 capital and production guidance.

Based on the Special Committee's recommendations, the Board of Penn West Petroleum approved a long-term plan to refocus the company's operations on fewer resource plays centered on Cardium development, supported by a strengthened balance sheet and to maintain a business model that provides for the payment of a quarterly dividend. To accomplish the plan, the Board also determined that a significant portfolio rationalization is appropriate, along with continuing the company's ongoing focus on operational improvements including cost reductions.

The conclusion of the Board following the strategic review process was that C$1.5 billion to C$2.0 billion of asset dispositions is appropriate to reduce Penn West's leverage to be consistent with its peer group, to provide a reset level from which reasonable leverage metrics can be maintained and funds flow grown, and to focus its operational teams on fewer, more concentrated plays. Targeted asset dispositions are expected to occur in two phases, with phase 1 expected to be completed by year-end 2013 and phase 2 by year-end 2014.

Penn West announces that it has agreements at various stages of completion to dispose of a number of non-core properties for proceeds of approximately C$485 million with combined production of approximately 12,500 boe per day. Purchase and Sale Agreements have been executed on C$480 million. The assets to be monetized are non-core positions in the Wainwright, Grande Prairie and Southern Alberta areas.

The Board of Penn West has approved a 2014 Capital Budget of C$900 million. The focus of the 2014 Budget will be to improve capital efficiencies and profitability over short-term production. The company expects to drill 210 net wells in 2014.