Mr. Dave Roberts reports

PENN WEST REPORTS SECOND QUARTER 2014 AVERAGE PRODUCTION OF 108,130 BOE PER DAY

Penn West Petroleum Ltd. has released second quarter 2014 average production of 108,130 barrels of oil equivalent per day (64 per cent oil and liquids) and has maintained 2014 production guidance of 101,000 to 106,000 barrels of oil equivalent per day. Penn West also reported other key operating results for the second quarter of 2014 and provided a preliminary report on third quarter 2014 operated development activity.

"Our solid second quarter production reflects a significant improvement in the reliability of our base volumes and continued strong development in our core light oil areas," said Dave Roberts, president and chief executive officer. "We remain confident that we are on track to deliver on 2014 production guidance, and we continue to build on the substantial operational and structural improvements we have made to the business in the past year."

In a separate news release today, Penn West announced that the audit committee of the company's board of directors is conducting a voluntary, internal review of certain of its accounting practices and that the board of directors of Penn West, acting on the recommendation of the audit committee, has concluded that certain of the company's historical financial statements must be restated.

Although the review is not yet complete, Penn West wishes to emphasize that the review does not affect previously disclosed cash and debt balances or previously released 2014 production guidance. Neither does the review affect operations, strategy and anticipated growth going forward. Operationally, the enterprise continues to improve, and the company remains on track to deliver on its long-term plan. In accordance with the company's customary practice, the company will be hosting a conference call and webcast presentation to discuss its second quarter results following the filing of the second quarter financial statements and management's discussion and analysis.

Progress against the company's long-term plan

Demonstrating the substantial progress the company has made with respect to the key elements of the company's long-term plan and achievements over the past year, the company has:

• Focused the portfolio;
• Reduced the company's core areas of development from as many as eight down to three: Cardium, Slave Point and Viking;
• Focused on conventional light oil;
• Allocated over 80 per cent of the company's development capital to the company's three core light oil areas;
• Through non-core dispositions, reduced the company's net wellbore count by approximately 3,500 wells (approximately 20 per cent of total wellbores), of which approximately one-third was non-producing;
• Improved capital efficiency; the company believes focusing on fewer core areas has allowed it to become best-in-class operator in the Cardium, Slave Point and Viking;
• Achieved the following drilling cycle time improvements:
• • Cardium: from 22 days to eight days on average;
  • Viking: from eight days to two days on average;
  • Slave Point: pacesetter well drilled in just under 14 days;
• Focused on operational consistency and stability in 2014 across all business areas, which has led to improved efficiency and greater reliability in the company's production performance;
• Improved costs and netbacks;
• Significantly reduced costs in the business;
• Reduced enterprise head count by over 1,000 personnel (approximately 46 per cent) from the company's peak in the fall of 2012, significantly reducing general and administrative expenses;
• Focus on conventional light oil expected to lead to improved netbacks;
• Initiated cultural change -- the enterprise is now aligned in improving the cash generating power of every barrel the company produces;
• Focus on the balance sheet: completed approximately $700-million in divestitures, of which the majority of proceeds have been applied to debt repayment, increasing the company's financial flexibility.

"Improving cycle times and increasing pace in the company's core areas remain the company's key focus for the remainder of 2014," said Mr. Roberts. "Looking beyond 2014, we continue to create processes that streamline the company's drilling inventory build-out -- from idea generation to ready to drill. We now have the company's 2015 development plan largely in place and expect to have the company's 2016 drilling inventory plans completed by year-end 2014."

Operated development activity

Operations were limited during the second quarter of 2014 due to spring breakup, allowing the company to further assess performance from the company's first quarter drilling program and evaluate additional opportunities to continue reductions in the company's cost structures and cycle times. In the second quarter, Penn West drilled 10 (10 net) light oil wells with a success rate of 100 per cent, eight (8.0 net) wells were drilled in the Viking, and one each was drilled in the Cardium (1.0 net) and the Slave Point (1.0 net).

Taking advantage of favourable weather conditions in the field, the company kicked off the company's second-half 2014 development program early in July with eight rigs currently operating in the company's light oil areas. The company remains on track to complete the planned 210-well development program for 2014.

The attached second quarter 2014 light oil development summary table summarizes the second quarter drilling, completions and tie-in activity.

  SECOND QUARTER 2014 LIGHT OIL DEVELOPMENT SUMMARY
                                                     
                           Number of wells             
                  Drilled     Completed On production
Business unit  Gross  Net Gross     Net   Gross   Net  

Cardium          1.0  1.0   8.0     8.0    10.0   8.5  
Viking           8.0  8.0    --      --      --    --   
Slave Point      1.0  1.0   4.0     4.0     4.0   4.0  
Total           10.0 10.0  12.0    12.0    14.0  12.5 

Cardium

In the Cardium, the company has reduced the number of days to drill a well from 22 days to eight days on average, which the company believes is best amongst the company's competitors in the play. With limited activity in the quarter, drilling and completion costs remain unchanged, and the company believes it continues to set the industry benchmark in the play. The drilling program in the second half of 2014 will feature more multiwell pads that will provide cost-efficiencies and drive incremental cost savings.

Importantly, during the second quarter of 2014, the company secured operatorship of the Pembina Cardium unit No. 11 in the Pembina field, which the company believes has significant potential for it. This is a substantial field in the Cardium that has not had any meaningful capital investment over the past several years. The company is currently in the process of completing a technical evaluation of PCU No. 11 and expects to have an initial six-well development program commencing in 2015.

In July, 2014, the company commenced the company's 30-well program in the Willesden Green area and currently has three drilling rigs operating. The company's development plan for the second half of 2014 adds a fourth drilling rig in August and a fifth rig in October to complete all drilling activity for the year.

In the Pembina area, second-half 2014 activities are planned in the Lodgepole and Pembina Cardium unit No. 9 areas. Drilling activity began on a seven-well program in Lodgepole with one rig in July. Once completed, that rig is scheduled to move to PCU No. 9 to begin a nine-well program later in the year.

During the company's second-half 2014 program, water flood activities are scheduled to continue in Willesden Green and Pembina as the company continues to assess expansion of the company's water flood program in 2015. Generally, the company's water flood programs throughout the Cardium area are proceeding, consistent with the company's long-term plan, and are performing in line with expectations. Over time, the company expects that these programs will have the potential to mitigate natural declines and increase the ultimate recovery of light oil resource in the company's Cardium areas.

Viking

During the second quarter of 2014, the company drilled eight wells in the Viking as the company continued to benefit from what the company believes is its industry-leading operational results in the area. The company's second-half 2014 program is significant with 100 wells planned and approximately 75 wells scheduled to be on production by the end of the year. In southwestern Saskatchewan, recent wet weather has caused a minor delay in the company's Viking program, where the company has two rigs currently operating to execute the company's development program in the second half of 2014.

Leveraging off the positive results of the company's 16-well-per-section down-spacing program earlier in the year, the company will continue to test down-spacing programs across the play. As the largest acreage holder in the core of the Viking play, an expanded down-spacing program would significantly increase the existing 400 to 500 drilling locations the company has estimated. In the company's second-half program, the company also plans to reduce the company's cost per well to below $800,000 from what the company believes to already be a best-in-class cost of $840,000.

Slave Point

The company continues to test various drilling and completions techniques in the Slave Point carbonates, as the company focuses on optimizing production performance, recoveries, cycle times and per-well costs. Throughout the second quarter of 2014, the company continued to monitor the results of the company's drilling program from earlier in the year.

In Otter, production performance on the company's first long-reach (3,200-metre) lateral wells is in line with expectations. The company is now monitoring these wells for longer-term performance before broader implementation of this design. In the Red Earth area, the two wells the company drilled in the first quarter of 2014 continue to perform above the company's expectations. In Sawn, the results of the company's first nitrogen fracture wells experienced average 30-day initial production rates that significantly exceeded the company's type curve. As in Otter, the company is now monitoring these wells for longer-term performance.

The company's second-half 2014 development activities in the Slave Point include a selective seven-well drilling program which began in July, 2014, five of which are anticipated to be on production by the end of 2014. The goal of this program is to continue with the assessment of each of the areas within the Slave Point, testing various drilling and completions techniques. To be competitive internally, per-well drilling and completion costs need to be $4.5-million or lower. Currently, average per-well drilling and completion costs in the company's Slave Point program are running in the $5.1-million range. The company believes that the required 12-per-cent reduction in costs is achievable and that the Slave Point will be a significant component of the company's development program in future years as communicated in the company's long-term plan.

Duvernay

Subsequent to the end of the second quarter of 2014, the company spudded the seven to 16 horizontal wells, targeting the Duvernay during the first week of July as planned. The company anticipates having the well completed and on production in late fall of 2014.

Third quarter activity summary

The third quarter of 2014 represents a significant milestone for Penn West as the company progresses toward building the internal capacity to execute on the company's long-term plan. Having attained competitive drilling and completion costs and cycle times in each of the company's core areas over the past six months, the company must now increase the pace and cadence of these activities to achieve the company's goals. The third quarter is the first quarter in which the company plans to increase development activities in the Cardium and Viking, and the company's goal is to do so while maintaining these competitive cost and cycle time measures.

In the Cardium, the third-quarter-operated development plan implies an average of eight new-well spuds per month. As the company progresses through the company's long-term plan, years four and five contemplate the company drilling upward of 200 Cardium wells per year and imply an average of approximately 15 to 20 new-well spuds per month. By design, the strategy contemplates the gradual and measured internal development of this capability to ensure success.

Further to the comments herein within the play discussions, the company's development activities for the third quarter, and in particular the company's on-production activity, are weighted toward September, in which 31 of the 52 planned wells are expected to be tied in. Consequently, the company's drilling and completion efforts early in the third quarter will have a greater impact on fourth quarter production volumes than on third quarter production volumes.

In the third quarter, the company also has regularly scheduled repair and maintenance turnaround activities, which are expected to impact quarterly average volumes by 2,000 to 3,000 barrels of oil equivalent per day.

              THIRD QUARTER 2014 PLANNED LIGHT-OIL-OPERATED DEVELOPMENT SUMMARY
                                        (in $MM)

Business unit              Development capital   Planned wells spud   Planned wells on production

Cardium                                    $87                  $24                            $7
Viking                                      64                   45                            40
Slave Point                                 44                    7                             5
Other                                       20                    8                             0
Total                                      215                   83                            52

Production

Penn West's second quarter 2014 average production of 108,130 boe per day (64 per cent oil and liquids) includes 2,428 boe per day of adjustments resulting primarily from closing amendments on asset divestitures completed earlier in the year. Accordingly, second quarter production performance was 105,702 boe per day, net of adjustments.

Hedging

As of July 1, 2014, the company is now participating fully in the currently strong crude oil price environment with the last of the company's WTI hedge positions expiring on June 30, 2014. This allows the company to immediately realize 100 per cent of current market pricing, which currently exceeds the company's 2014 budget assumption by approximately $10 per barrel. Moving forward, the company's hedging activities on the crude oil side of the business will be focused on physical arrangements with end-users, with a goal to increase the company's netbacks and improve profitability.

We seek Safe Harbor.