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by Stockwatch Business Reporter

West Texas Intermediate crude for July delivery lost 19 cents to $48.88 on the New York Merc, while Brent for August lost 19 cents to $50.35 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.25 to WTI ($36.63), down from a discount of $12.15. Natural gas for July added 2.9 cents to $2.585. The TSX energy index added a fraction to close at 184.25.

Penn West Petroleum Ltd. (PWT) vaulted up 45 cents to $1.61 on 27.5 million shares, following Friday evening's announcement of asset sales totalling $1.1-billion, which will wipe out enough debt to keep the company in comfortable shape for the rest of the year. Penn West was previously on the brink of a debt default, warning investors that it could breach its covenants on June 30 unless it could win relief from its lenders. Media outlets began reporting earlier this month that the company would try to sell its assets in the Saskatchewan Viking light oil play -- one of its two core plays, along with the Alberta Cardium -- to keep the lenders at bay. Analysts figured that a Viking sale could bring in at least $400-million to $500-million. Penn West announced on Friday that it is selling more than just the Viking assets and getting more than twice the predicted proceeds. It has agreed to sell all of its properties in Saskatchewan, including the Viking assets and non-Viking medium and heavy oil assets, to the Canada Pension Plan-backed Teine Energy Ltd. for $975-million. That is an impressive price. Based on the assets' production of 13,650 barrels of oil equivalent a day, each barrel a day is costing Teine about $71,000, "meaningfully above recent precedent transactions in the area," boasts Penn West. (An example of a recent precedent would be Raging River Exploration Ltd.'s (RRX: $10.66) proposed takeover of Rock Energy Inc. (RE: $0.85), which was announced on June 1 and requires Raging River to pay just $43,000 per barrel a day.) How fortunate for Penn West that Teine can access the generous pockets of the Canada Pension Plan. Meanwhile, Penn West is also selling various Alberta assets producing 3,100 barrels a day for $140-million. It will use the total proceeds of $1.1-billion to reduce its net debt to about $600-million, and expects to be within its covenants on June 30 and for the rest of the year.

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