Penn West Announces The Sale Of Its Non-Operated 9.5% Working Interest In The Weyburn Unit For $205 Million And UpDates Its Annual Production Guidance

CALGARY, Oct 1, 2015 /PRNewswire/ – PENN WEST PETROLEUM LTD. (TSX – PWT; NYSE – PWE) (“Penn West“, “we“, “us” or “our“) is pleased to announce that it has entered into a definitive agreement for the sale of its non-operated 9.5% working interest in the Weyburn Unit in Southeast Saskatchewan for cash consideration of $205 million, subject to closing adjustments customary in transactions of this nature.  We intend to use the proceeds from this disposition to reduce our senior debt.  Upon the completion of the sale of our Weyburn Unit working interest, we will have raised approximately $810 million in total proceeds this year through our non-core asset disposition program.

David Dyck, Senior Vice President and Chief Financial Officer of Penn West, commented, “This disposition further demonstrates the continued success of our non-core asset disposition program.  With this transaction, we have surpassed our $650 million non-core asset disposition target.  We believe that our dispositions this year evidence the quality of our non-core asset base, our ongoing commitment to reduce our debt, and our ability to successfully execute meaningful transactions in a challenging commodity price environment.  We will continue to pursue additional non-core asset divestitures in order to further reduce our leverage and we will continue to focus on our core operations.”

The following are some of the key metrics and implied transaction multiples for the Weyburn Unit working interest for first half 2015:


2,500 bbl/d

Liquids Weighting


Operating Cost


Normalized Operating Cost(1)


Normalized Field Netback(1)


Implied Production Multiple


Implied Normalized Net Operating Income Multiple


(1) Normalized Operating Cost and Field Netback reflect impact of capitalized CO2 injection costs.

The effective date of the sale of our Weyburn Unit working interest will be July 1, 2015 and closing is expected to occur during the fourth quarter, subject to the receipt of all necessary regulatory approvals and the satisfaction of closing conditions customary in transactions of this nature.  RBC Capital Markets acted as our exclusive financial advisor on this disposition.

Updated 2015 Production Guidance

As a result of the divestiture of both our Weyburn Unit working interest and our Mitsue properties, previously announced on September 15, we have updated our annual production guidance range to 84,000 – 88,000 boe/d from 86,000 – 90,000 boe/d.  Our capital budget for the year remains unchanged at $500 million.  We continue to expect our operating costs for the year to be between $19.25/boe and $19.75/boe with our G&A for the year to be between $2.80/boe and $3.05/boe.

About Penn West

Penn West is one of the largest conventional oil and natural gas producers in Canada.  Our goal is to be the company that redefines oil and gas excellence in western Canada.  Based in Calgary, Alberta, Penn West operates a significant portfolio of opportunities with a dominant position in light oil in Canada on a land base encompassing approximately 4.3 million acres.

Penn West shares are listed on the Toronto Stock Exchange under the symbol “PWT” and on the New York Stock Exchange under the symbol “PWE”.  All dollar amounts herein are in Canadian dollars.

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