Penn West Shares Fall on Earnings Miss
Penn West Petroleum Ltd. (PWT), the oil and natural gas producer that agreed to sell C$1.3 billion ($1.31 billion) in assets last month, fell to the lowest in three years after a wider-than-expected third-quarter loss.
Penn West dropped 7.2 percent to C$12.09 at the close in Toronto. The Calgary-based company is down 40 percent this year.
The company reported a loss of C$67 million, or 14 cents a share, versus a gain of C$138 million, or 29 cents, a year earlier. The loss was 7 cents larger than the average of four analysts’ estimates compiled by Bloomberg.
Penn West’s production of the equivalent of 160,339 barrels of oil a day in the quarter was below the “conservative forecast” of 162,500 barrels by Allan Stepa, a Calgary-based analyst at Desjardins Securities Inc. The sale of assets producing about 12,000 barrels a day helped “clean up the balance sheet,” he said in a note today.
The company announced a plan to boost 2012 spending by C$100 million to lift its output, though “given its historical track record of over-promising and under-delivering with respect to growth targets, we believe investors will continue to take a wait-and-see approach,” Stepa said.
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