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by Stockwatch Business Reporter

West Texas Intermediate crude for July delivery lost 39 cents to $48.49 on the New York Merc, while Brent for August lost 52 cents to $49.83 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.40 to WTI ($36.09), down from a discount of $12.25. Natural gas for July added 1.9 cents to $2.604. The TSX energy index lost a fraction to close at 183.77.

Penn West Petroleum Ltd. (PWT) added seven cents to $1.68 on 12.9 million shares, on top of the 45 cents it added yesterday after (as discussed in yesterday's Energy Summary) agreeing to sell about 17,000 barrels of oil equivalent a day worth of non-core assets for $1.1-billion, including all of its formerly core assets in the Saskatchewan Viking. Management held a conference call yesterday to discuss the sale and the future of the "transformed" Penn West. The sale was just phase 1 of the transformation, said management; now Penn West must complete phase 2. This also involves selling assets, though at far less lucrative prices. The company wants to sell another 20,000 barrels a day for a total of $100-million to $200-million. The price is lower because these assets are weighted toward B.C. gas rather than Saskatchewan oil, explained management. It added that it is currently talking to potential buyers and expects to sell all of the assets by year-end. Then 2017 will see Penn West "growing our production base." The base, explained management, will consist of about 19,500 barrels a day from the Alberta Cardium ("the foundation of the company"), 1,000 barrels a day from the Alberta Viking (a "key growth area" where Penn West hopes to apply lessons from the Saskatchewan Viking) and 5,000 barrels a day from the Peace River area (where the main goal is steady production and cash flow). At current commodity prices, Penn West should be able to expand by 10 per cent a year while generating free cash flow, trumpeted management. It declined to estimate how much this would cost -- "at this point in time we're not going to get too granular on that," said president and chief executive officer Dave Roberts -- but did note that Penn West is expecting funds flow of about $150-million, so the spending level should be somewhere below that. Management promised to figure out official 2017 guidance in the coming months.

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