Penn West Petroleum Ltd. (PWT), the Canadian energy company that cut more than 25 percent of its workforce this year, fell the most since 2008 after saying its turnaround strategy is expected to continue through 2014.
Penn West declined 16 percent to C$9.74 at the close in Toronto, the most since December 2008. The Calgary-based company is targeting as much as C$2 billion ($1.9 billion) in asset sales in a new plan by Chief Executive Officer David Roberts, who took over in June, according to a presentation to investors today. Penn West called 2014 a “critical transition year.”
“The market has just lost complete faith in this company,” Kyle Preston, an analyst at National Bank Financial in Calgary who rates the company the equivalent of a hold, said in a phone interview today. “The strategic review process is talking about yet another year of transition.”
Penn West forecast an underwhelming per-barrel price on about C$485 million in asset sales this year and announced a disappointing production target for next year, Preston said. The company expects to get about C$38,800 per flowing barrel, which is less than the at least C$50,000 a barrel that Preston would have expected, he said.
The company forecast an average production target of 105,000 to 110,000 barrels a day for next year after announcing it expects to sell assets with output of 12,500 barrels a day by the end of 2013. Analysts had forecast prior to the announcement that Penn West would produce the equivalent of 136,739 barrels of oil a day in the first quarter of 2014, according to four analysts’ estimates compiled by Bloomberg.
Clayton Paradis, a Penn West spokesman, didn’t answer phone calls to his office today, or respond immediately to an e-mail message.
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