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CALGARY – Penn West Petroleum, which posted a $1.6-billion net loss for the last three months of 2015, wants some leeway from its lenders.
The Calgary-based crude producer said Thursday that it should finish the very first quarter onside using its debt agreements, but warned that will not be the case by the end of June if low oil prices persist.
The company said hello is within talks with bank lenders and senior noteholders about amending agreements. It’s also looking at more asset sales over the $800-million worth it closed this past year and at selling hedging positions.
“Although we maintain strong relationships with this key lenders and have had initial discussions with them regarding proposed amendments, there can be no assurance that we’ll be able to reach appropriate agreements together,” Penn West cautioned.
Penn West’s staff count is down about 40 per cent from mid-2015 and its capital plan for this year is really a meagre $50 million – 90 per cent less than in 2015.
U.S. benchmark crude is at around US$38 a barrel – a noticable difference from the lows it touched earlier this year but nonetheless an impressive drop from mid-2014 highs of US$108 a barrel and below what many producers need to be profitable.
On a conference call with analysts, CEO David Roberts said painful measures taken as a result of the downturn in crude prices pays off.
“The thing is we’re now a business that is fighting fit for a mid-US$40 oil world,” he said.
“The truth is, the market will turn and it’ll be the likes of ours that use this time around to obtain leaner, get smarter and get tougher that will succeed.”
The Canadian Press
