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by Stockwatch Business Reporter

West Texas Intermediate crude for April delivery, the benchmark in North America, added 39 cents to $50.00 on the New York Merc, while Brent for April, the international benchmark, lost $1.20 to $58.53 (all figures in this para U.S.). Western Canadian Select, Canada's heavy oil benchmark, traded at a discount of $14.65 to WTI ($35.35), up from a discount of $14.85. Natural gas for April, the international benchmark, lost 16.1 cents to $2.67, amid forecasts of a spring thaw that will soon bring the winter heating season to an end. The TSX energy index lost 5.26 points to close at 213.31.

Penn West Petroleum Ltd. (PWT) lost 14 cents to $2.06 on 6.4 million shares. It was over $2.50 at the beginning of the month. Investors may be worried about its year-end financials, expected on Thursday, March 12, before the open. They may include an update on the company's debt and 2015 outlook. In January, president and CEO Dave Roberts told a CIBC conference that Penn West, which has about $2.1-billion in privately held bonds, is "going to have trouble with the ceiling test" at $50 (U.S.) oil and is seeking relief from bondholders. Mr. Roberts was optimistic that a deal would be reached and investors would then be able to turn their focus back to Penn West's actual business of producing oil and gas. Yet the debt is not the only concern. Penn West has a generous quarterly dividend, even after cutting it in December to three cents from 14 cents. The current payout costs $60-million a year and yields 5.8 per cent. Also in December, Penn West lowered its 2015 budget to $625-million from $840-million. It will likely lower it again when it releases its financials on Thursday, according to RBC analyst Greg Pardy, who put out a report today about his recent talk with Mr. Roberts. Mr. Pardy wrote that Penn West's first quarter spending is leaning toward $220-million, below the $250-million originally planned. The budget for the rest of the year is being reviewed with the goal of improving the balance sheet. Assets are up for sale for the same reason. Penn West emphasized to Mr. Pardy that its liquidity is still good because of a $1.7-billion credit facility that was completely undrawn as of Dec. 17 (and was "essentially undrawn" as of Jan. 5, according to the company's March corporate presentation). Still, the debt is a problem, and Mr. Pardy said that by his calculations, Penn West will breach its covenants in the second quarter. Around the same time, predicted Mr. Pardy, Penn West will suspend its dividend.

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