May 4, 2012 / 11:00 AM / 5 years ago

Penn West profit plunges on weak gas prices

(Reuters) - Penn West Petroleum Ltd PWT.TO 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.

It still expects production to average 168,500 boe/d to 172,500 boe/d, and capital budget of C$1.3 billion to C$1.4 billion, net of asset acquisition and disposition.

Shares of the Calgary, Alberta-based company, which has a market value of C$7.89 billion, closed at C$16.18 on Thursday on the Toronto Stock Exchange.

($1 = 0.9867 Canadian dollars)

Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Maju Samuel

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