CALGARY – Penn West Petroleum, which posted a $1.6-billion net loss for the last 3 months of 2015, wants some leeway from the lenders.
The Calgary-based crude producer said Thursday it should finish the first quarter onside with its debt agreements, but warned that will not be the case after June if low oil prices persist.
The company said hello is within talks with bank lenders and senior noteholders about amending agreements. It is also looking at more asset sales over the $800-million worth it closed last year and at selling hedging positions.
“Although we maintain strong relationships with this key lenders and also have had initial discussions with them with respect to proposed amendments, there can be no assurance that we will have the ability to reach appropriate agreements together,” Penn West cautioned.
Penn West’s staff count is down about 40 percent from mid-2015 and it is capital plan for this year is a meagre $50 million – 90 percent lower than in 2015.
U.S. benchmark crude reaches around US$38 a barrel – a noticable difference in the lows it touched captured but nonetheless a dramatic 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 because of the downturn in crude prices pays off.
“The thing is we’re now a company that’s fighting fit for a mid-US$40 oil world,” he explained.
“The truth is, the marketplace will turn and it’ll be companies like ours which use this time to get leaner, get smarter and get tougher that are going to succeed.”
The Canadian Press
