Penn West Reports 2015 Third Quarter Financial and Operational Results

Penn West Petroleum (TSX:PWT,NYSE:PWE) announced its financial and operational results for the third quarter and provided an guidance for the remainder of 2015.
Financial and operational highlights:

• During the third quarter, we entered into agreements to sell our Mitsue properties for proceeds of approximately $193 million and our Weyburn Unit working interest for proceeds of $205 million, prior to closing adjustments.  Subsequent to the end of the third quarter, the Mitsue transaction closed on October 30, 2015 and we anticipate theWeyburn transaction to close in November 2015, with proceeds from both dispositions to be applied against our senior notes and our syndicated bank facility
• As at September 30, 2015, we were in compliance with all of our financial covenants under our lending agreements and had approximately $650 million of undrawn capacity under our syndicated bank facility of $1.2 billion. Senior Debt to EBITDA was 4.3 times, relative to a 5.0 times limit
• Production in the third quarter averaged 82,198 barrels of oil equivalent per day.  The majority of the difference relative to the second quarter was the result of dispositions closed in late June. Third quarter volumes were also impacted by approximately 1,000 barrels of oil equivalent per day of third party infrastructure constraints, including the TransCanada Pipeline and Alliance Pipeline systems.  Additionally, certain turnarounds had been deferred from the second quarter for operational reasons
• Third quarter funds flow from operations, which excludes foreign exchange hedge monetizations/settlements, realized foreign exchange losses and restructuring charges was $45 million ($0.09 per share).  Despite WTI prices of approximately US$46 per barrel, resulting in Edmonton Par prices of approximately $56 per barrel, our field netbacks including risk management activities remained strong at approximately $14 per boe
• Capital expenditures were $116 million during the third quarter of 2015, with our development program selectively focused on the Viking and Cardium plays
• In the third quarter of 2015, we recorded non-cash impairment charges of $435 millionprimarily related to certain non-core properties in the Fort St. John area of northeasternBritish Columbia and in the Swan Hills and Wainwright areas of Alberta. This was mainly due to a decline in forecasted commodity prices compared to December 31, 2014
• Additionally, as a result of entering into definitive sales agreements related to the Mitsue and Weyburn transactions, we recorded non-cash impairment charges of $399 millionon these two transactions as the book value of these assets exceeded the fair value received

Click here to read the full Penn West Petroleum (TSX:PWT,NYSE:PWE) press release.
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