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by Stockwatch Business Reporter

West Texas Intermediate crude for March delivery lost 72 cents to $45.59 on the New York Merc, while Brent for March added 27 cents to $48.79 (all figures in this para U.S.). Western Canadian Select traded at a discount of $13.65 to WTI ($31.94), up from a discount of $13.70. Natural gas for February added 15.1 cents to $2.98. The TSX energy index added 2.67 points to close at 216.39.

Saudi Arabia's King Abdullah bin Abdulaziz died Friday, age 90, after nearly 20 years in power. His brother and successor, Salman bid Abdul-Aziz Al Saud, age 79, is unlikely to change OPEC's policy of keeping oil output steady, according to observers.

Penn West Petroleum Ltd. (PWT) lost six cents to $1.90 on 6.86 million shares, on news that it may have trouble meeting its debt covenants. Reuters, BNN and others reported that CEO Dave Roberts spoke at an investment conference in Whistler, B.C., yesterday and said he is seeking relief from bondholders. Bloomberg added that a spokesman promised to give an update on the bondholder talks when Penn West releases its year-end earnings in mid-March. As things stand, according to Mr. Roberts's remarks (made at CIBC's 18th Annual Whistler Institutional Investor Conference from Jan. 21 to 23), Penn West has about $2.1-billion in privately held bonds and is basically undrawn on its $1.7-billion facilities. Its lending agreements say senior net debt to EBITDA must not exceed three times. Mr. Roberts said that in a $50 (U.S.) oil world, "we are going to have trouble with the ceiling test." He emphasized that this is not a solvency issue because Penn West is still producing plenty of oil and gas, around 100,000 barrels a day. "I think we can work through this with our bondholders," he said. Once the short-term fear about capital structure is gone, people will be able to focus on Penn West's business again, which Mr. Roberts would much prefer. He tried to turn the discussion to Penn West's core Cardium and Viking assets, where the company's performance has gone from "dreadful" to "the best in the field." For example, in the Viking, drill times have gone to two days from five days and drilling and completion costs have gone to the low $800,000s from $1.2-million. Very interesting, said the interviewer, who turned the discussion right back to money. First he brought up asset sales. Mr. Roberts said Penn West has assets on the block, but buyers are elusive. He will consider selling anything. The interviewer next mentioned the three-cent quarterly dividend, which yields 6.3 per cent and was lowered from 14 cents in mid-December. Mr. Roberts called that "the most difficult professional and personal decision I've made since I've been at the company." He did not seem at all keen on a repeat. The new dividend costs $60-million a year.

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