UPDATE 1-Penn West posts bigger loss on lower production, prices

Thu Mar 12, 2015 7:23am EDT
 
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March 12 (Reuters) - Penn West Petroleum Ltd , one of Canada's largest conventional oil producers, reported a much bigger loss and cut its quarterly dividend for the second time in three months, hurt by lower production and a fall in crude prices.

Penn West's cash flow, a measure of its ability to pay for new projects and drilling, fell to C$137 million ($108 million), or 28 Canadian per share, in the fourth quarter from C$203 million, or 42 Canadian cents, a year earlier.

Chief Executive David Roberts said in January the company may have trouble meeting cash flow covenants on C$2.1 billion bonds and was holding discussions with bondholders to keep doing business as usual.

Penn West said on Thursday it has reached an agreement in principle with its bondholders to amend some of its covenants.

The company said net loss widened to C$1.77 billion, or C$3.57 per share, in the quarter ended Dec. 31 from C$675 million, or C$1.38 per share, a year earlier.

The company said it took a non-cash goodwill impairment of C$1.1 billion in the quarter.

Penn West cut its quarterly dividend to 1 Canadian cent per share from 3 Canadian cents. The company slashed its dividend to 3 Canadian cents from 14 Canadian cents on Dec. 17.

Total production fell 22 percent to 97,143 barrels of oil equivalent per day.

Average sales price for light oil and natural gas liquids fell to C$68.18 per barrel from C$78.46, while heavy oil prices have fallen to C$54.35 from C$58.78. ($1 = C$1.2674) (Reporting by Nia Williams in Calgary and Anannya Pramanick in Bengaluru; Editing by Don Sebastian)