Penn West profit plunges on weak gas prices

Fri May 4, 2012 8:01am EDT
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(Reuters) - Penn West Petroleum Ltd (PWT.TO: Quote) reported an 80 percent fall in first-quarter profit on cheaper Canadian crude and decade-low natural gas prices.

Penn West, one of Western Canada's largest conventional oil and gas producers, has been spending more on light-oil areas such as the Carbonates, Cardium, Viking and Spearfish to ward off weak natural gas prices.

The price of the fuel fell 40 percent in the January-March quarter.

Net income for the company fell to C$59 million ($59.8 million), or 12 Canadian cents per share, from C$291 million, or 63 Canadian cents per share, a year ago.

Production averaged at 167,420 barrels of oil equivalent per day (boe/d), nearly flat from the year-ago period.

Average liquids production in the quarter was more than 107,000 boe/d, of which about 90 percent was oil, the company said in a statement.

Funds flow fell 5 percent to C$337 million, or 71 Canadian cents per share.

Gross revenue, however, rose 3 percent to C$870 million.

The company reaffirmed its production and capital budget forecast for the year.   Continued...