CALGARY,
May 25, 2015 /CNW/ - PENN WEST
PETROLEUM LTD. (TSX - PWT; NYSE - PWE) ("Penn West", "we",
"our" or the "Company") is pleased to announce that it
has finalized and entered into definitive amending agreements with
the lenders under its syndicated bank facility and the holders of
its senior notes to, among other things, amend its financial
covenants as initially disclosed by the Company in its press
release issued on March 12, 2015
announcing its year-end financial and operational results for
2014.
Since Penn West announced in March that it had
entered into agreements in principle with its lenders and
noteholders, the Company has sold or entered into agreements to
sell assets for aggregate net proceeds of approximately
$415 million, which includes
$318 million from its previously
announced royalty transactions which were completed in early May,
and approximately $97 million from
non-core asset dispositions which are expected to be completed by
the end of the second quarter of 2015. Pursuant to the terms of the
amending agreements with its lenders and noteholders, in the event
that Penn West completes any asset dispositions prior to
March 30, 2017, it has committed to
use the net proceeds from such asset dispositions to repay at par
$650 million of the outstanding
principal amounts owing to noteholders, with corresponding pro rata
amounts from such asset dispositions to be used to repay any
outstanding amounts drawn under its syndicated bank facility.
David Dyck,
Senior Vice President and CFO, commented, "We would like to thank
our lenders and noteholders for their commitment to the long-term
success of Penn West. The terms of the amending agreements
provide financial flexibility so that the Company can continue to
focus on the key business, strategic and operational targets that
will ultimately drive the success of the Company for all
stakeholders. This marks a key milestone in our ongoing plan to
reduce debt and improve our capital structure. Strategically, the
Company remains focused on achieving a fully competitive debt to
funds flow ratio. Over the past 18 months, Penn West has repaid its
debt by approximately $1.0 billion
using the net proceeds from asset dispositions. Additionally,
the aggregate net proceeds of approximately $415 million from the recently completed royalty
transactions and the asset dispositions to be completed by the end
of the second quarter of 2015 have been committed to debt
repayment. We will continue to strengthen the Company's
long-term financial sustainability and execute our light oil
focused strategy, and we will remain disciplined and focused to
achieve our goals and deliver on all of our targets. I am confident
we are making important and positive steps to ensure a strong
future for Penn West."
Penn West is one of the largest conventional oil
and natural gas producers in Canada. Our goal is to be the company that
redefines oil & gas excellence in western Canada. Based in Calgary, Alberta, Penn West operates a
significant portfolio of opportunities with a dominant position in
light oil in Canada on a land base
encompassing approximately 4.5 million acres.
Penn West shares are listed on the Toronto Stock Exchange under
the symbol PWT and on the New York Stock Exchange under the symbol
PWE.
Forward-Looking Statements
Certain statements contained in this document
constitute forward-looking statements or information (collectively
"forward-looking statements") within the meaning of the
"safe harbor" provisions of applicable securities legislation.
Forward-looking statements are typically identified by words
suggesting future events or future performance. In particular, this
document contains forward-looking statements pertaining to the
expected sale of $97 million from
non-core asset by the end of the second quarter of 2015, that in
the event that Penn West completes any asset dispositions prior to
March 30, 2017, it has committed to
use the net proceeds from such asset dispositions to repay at par
$650 million of the outstanding
principal amount owing to noteholders, with corresponding pro rata
amounts from such asset dispositions to be used to repay any
outstanding amounts drawn under its syndicated banked facility, the
amending agreements providing the financial flexibility so that the
Company can continue to focus on the key business, strategic and
operational targets that will ultimately drive the success of the
Company for all stakeholders, the plan to reduce debt and improve
our capital structure, remaining focused on achieving a fully
competitive debt to funds flow ratio, continuing to strengthen the
Company's long-term financial sustainability and execute our light
oil focused strategy, remaining disciplined and focused to achieve
our goals and deliver on all our targets and the goal to be the
company that redefines oil & gas excellence in western
Canada. Although we believe that
the expectations reflected in the forward-looking statements
contained in this document, and the assumptions on which such
forward-looking statements are made, are reasonable, there can be
no assurance that such expectations will prove to be correct.
Readers are cautioned not to place undue reliance on
forward-looking statements included in this document, as there can
be no assurance that the plans, intentions or expectations upon
which the forward-looking statements are based will occur. By their
nature, forward-looking statements involve numerous assumptions,
known and unknown risks and uncertainties that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause our
actual performance and financial results in future periods to
differ materially from any estimates or projections of future
performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among other
things: the possibility that we are unable to execute some or all
of our ongoing non-core asset disposition program on favourable
terms or at all, including the dispositions discussed herein,
whether due to the failure to receive requisite regulatory or other
third party approvals or satisfy applicable closing conditions or
for other reasons that we cannot anticipate; the possibility that
we will not be able to successfully execute our long-term plan in
part or in full, and the possibility that some or all of the
benefits that we anticipate will accrue to our Company and our
securityholders as a result of the successful execution of such
plan do not materialize; the impact of weather conditions on
seasonal demand and ability to execute capital programs; risks
inherent in oil and natural gas operations; uncertainties
associated with estimating reserves and resources; competition for,
among other things, capital, acquisitions of reserves, resources,
undeveloped lands and skilled personnel; geological, technical,
drilling and processing problems; general economic and political
conditions in Canada, the U.S. and
globally; industry conditions, including fluctuations in the price
of oil and natural gas, price differentials for crude oil produced
in Canada as compared to other
markets, and transportation restrictions; royalties payable in
respect of our oil and natural gas production and changes to
government royalty frameworks; changes in government regulation of
the oil and natural gas industry, including environmental
regulation; fluctuations in foreign exchange or interest rates;
unanticipated operating events or environmental events that can
reduce production or cause production to be shut-in or delayed,
including wild fires and flooding; failure to obtain regulatory,
industry partner and other third-party consents and approvals when
required, including for dispositions; failure to realize the
anticipated benefits of dispositions; changes in tax and other laws
that affect us and our securityholders; the potential failure of
counterparties to honour their contractual obligations; and the
other factors described in our public filings (including our Annual
Information Form) available in Canada at www.sedar.com and in the United States at www.sec.gov. Readers are
cautioned that this list of risk factors should not be construed as
exhaustive. The forward-looking statements contained in this
document speak only as of the date of this document. Except as
expressly required by applicable securities laws, we do not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this
cautionary statement.
SOURCE Penn West