CALGARY, May 25, 2015 /PRNewswire/ - PENN WEST PETROLEUM LTD. (TSX - PWT; NYSE - PWE) ("Penn West", "we",
"our" or the "Company") is pleased to announce that it has finalized and entered into
definitive amending agreements with the lenders under its syndicated
bank facility and the holders of its senior notes to, among other
things, amend its financial covenants as initially disclosed by the
Company in its press release issued on March 12, 2015 announcing its
year-end financial and operational results for 2014.
Since Penn West announced in March that it had entered into agreements
in principle with its lenders and noteholders, the Company has sold or
entered into agreements to sell assets for aggregate net proceeds of
approximately $415 million, which includes $318 million from its
previously announced royalty transactions which were completed in early
May, and approximately $97 million from non-core asset dispositions
which are expected to be completed by the end of the second quarter of
2015. Pursuant to the terms of the amending agreements with its lenders
and noteholders, in the event that Penn West completes any asset
dispositions prior to March 30, 2017, it has committed to use the net
proceeds from such asset dispositions to repay at par $650 million of
the outstanding principal amounts owing to noteholders, with
corresponding pro rata amounts from such asset dispositions to be used
to repay any outstanding amounts drawn under its syndicated bank
facility.
David Dyck, Senior Vice President and CFO, commented, "We would like to
thank our lenders and noteholders for their commitment to the long-term
success of Penn West. The terms of the amending agreements provide
financial flexibility so that the Company can continue to focus on the
key business, strategic and operational targets that will ultimately
drive the success of the Company for all stakeholders. This marks a key
milestone in our ongoing plan to reduce debt and improve our capital
structure. Strategically, the Company remains focused on achieving a
fully competitive debt to funds flow ratio. Over the past 18 months,
Penn West has repaid its debt by approximately $1.0 billion using the
net proceeds from asset dispositions. Additionally, the aggregate net
proceeds of approximately $415 million from the recently completed
royalty transactions and the asset dispositions to be completed by the
end of the second quarter of 2015 have been committed to debt
repayment. We will continue to strengthen the Company's long-term
financial sustainability and execute our light oil focused strategy,
and we will remain disciplined and focused to achieve our goals and
deliver on all of our targets. I am confident we are making important
and positive steps to ensure a strong future for Penn West."
Penn West is one of the largest conventional oil and natural gas
producers in Canada. Our goal is to be the company that redefines oil &
gas excellence in western Canada. Based in Calgary, Alberta, Penn West
operates a significant portfolio of opportunities with a dominant
position in light oil in Canada on a land base encompassing
approximately 4.5 million acres.
Penn West shares are listed on the Toronto Stock Exchange under the
symbol PWT and on the New York Stock Exchange under the symbol PWE.
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking
statements or information (collectively "forward-looking statements") within the meaning of the "safe harbor" provisions of applicable
securities legislation. Forward-looking statements are typically
identified by words suggesting future events or future performance. In
particular, this document contains forward-looking statements
pertaining to the expected sale of $97 million from non-core asset by
the end of the second quarter of 2015, that in the event that Penn West
completes any asset dispositions prior to March 30, 2017, it has
committed to use the net proceeds from such asset dispositions to repay
at par $650 million of the outstanding principal amount owing to
noteholders, with corresponding pro rata amounts from such asset
dispositions to be used to repay any outstanding amounts drawn under
its syndicated banked facility, the amending agreements providing the
financial flexibility so that the Company can continue to focus on the
key business, strategic and operational targets that will ultimately
drive the success of the Company for all stakeholders, the plan to
reduce debt and improve our capital structure, remaining focused on
achieving a fully competitive debt to funds flow ratio, continuing to
strengthen the Company's long-term financial sustainability and execute
our light oil focused strategy, remaining disciplined and focused to
achieve our goals and deliver on all our targets and the goal to be the
company that redefines oil & gas excellence in western Canada. Although
we believe that the expectations reflected in the forward-looking
statements contained in this document, and the assumptions on which
such forward-looking statements are made, are reasonable, there can be
no assurance that such expectations will prove to be correct. Readers
are cautioned not to place undue reliance on forward-looking statements
included in this document, as there can be no assurance that the plans,
intentions or expectations upon which the forward-looking statements
are based will occur. By their nature, forward-looking statements
involve numerous assumptions, known and unknown risks and uncertainties
that contribute to the possibility that the predictions, forecasts,
projections and other forward-looking statements will not occur, which
may cause our actual performance and financial results in future
periods to differ materially from any estimates or projections of
future performance or results expressed or implied by such
forward-looking statements. These risks and uncertainties include,
among other things: the possibility that we are unable to execute some
or all of our ongoing non-core asset disposition program on favourable
terms or at all, including the dispositions discussed herein, whether
due to the failure to receive requisite regulatory or other third party
approvals or satisfy applicable closing conditions or for other reasons
that we cannot anticipate; the possibility that we will not be able to
successfully execute our long-term plan in part or in full, and the
possibility that some or all of the benefits that we anticipate will
accrue to our Company and our securityholders as a result of the
successful execution of such plan do not materialize; the impact of
weather conditions on seasonal demand and ability to execute capital
programs; risks inherent in oil and natural gas operations;
uncertainties associated with estimating reserves and resources;
competition for, among other things, capital, acquisitions of reserves,
resources, undeveloped lands and skilled personnel; geological,
technical, drilling and processing problems; general economic and
political conditions in Canada, the U.S. and globally; industry
conditions, including fluctuations in the price of oil and natural gas,
price differentials for crude oil produced in Canada as compared to
other markets, and transportation restrictions; royalties payable in
respect of our oil and natural gas production and changes to government
royalty frameworks; changes in government regulation of the oil and
natural gas industry, including environmental regulation; fluctuations
in foreign exchange or interest rates; unanticipated operating events
or environmental events that can reduce production or cause production
to be shut-in or delayed, including wild fires and flooding; failure to
obtain regulatory, industry partner and other third-party consents and
approvals when required, including for dispositions; failure to realize
the anticipated benefits of dispositions; changes in tax and other laws
that affect us and our securityholders; the potential failure of
counterparties to honour their contractual obligations; and the other
factors described in our public filings (including our Annual
Information Form) available in Canada at www.sedar.com and in the
United States at www.sec.gov. Readers are cautioned that this list of
risk factors should not be construed as exhaustive. The forward-looking
statements contained in this document speak only as of the date of this
document. Except as expressly required by applicable securities laws,
we do not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements contained in
this document are expressly qualified by this cautionary statement.
SOURCE Penn West