Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Penn West to Sell ‘Non-Core’ Assets for $1.33 Billion

Oct. 17 (Bloomberg) -- Penn West Petroleum Ltd., the Canadian energy company that has dropped 31 percent this year, has agreements in principle to sell unidentified “non-core” assets for C$1.3 billion ($1.33 billion) to reduce debt.

The oil and natural gas producer anticipates the sales will close by year-end, according to a statement today. Calgary-based Penn West won’t identify the buyers until the deals close, said Clayton Paradis, head of investor relations. The assets for sale produce the equivalent of about 12,000 barrels of oil a day.

The company, which is targeting C$1 billion to C$1.5 billion in asset sales, also provided estimates today that two of its projects may hold more than 1 billion barrels of oil. Penn West converted from a trust last year and operates on about 6 million acres in western Canada, according to its website.

“With these resource estimates, Penn West is trying to entice a potential bidder for the whole company,” Michael Zuk, a Calgary-based analyst at Stifel Nicolaus & Co., said in a telephone interview today. “It goes without saying that they needed to reduce their debt load and after that a sale would be more likely.”

Paradis declined to comment on a possible sale of the company, which has a market value of C$6.6 billion. Penn West rose 1.4 percent to C$13.85 at the close in Toronto.

The company’s 55 percent stake in the Peace River project holds about 473 million barrels of bitumen, according to an assessment by engineering firm AJM Deloitte and Sproule Unconventional Ltd. Sovereign wealth fund China Investment Corp. owns the remaining stake in the Alberta project.

Penn West’s Cardium properties in Alberta hold 533 million barrels of oil.

To contact the reporter on this story: Benjamin Haas in New York at bhaas7@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.