February 16, 2012 / 1:12 PM / 6 years ago

UPDATE 1-Penn West 4th-qtr loss widens on hedging losses

Feb 16 (Reuters) - Canada’s Penn West Petroleum Ltd reported a wider fourth-quarter loss mainly due to hedging losses and said it will continue to focus on light-oil areas.

Penn West, one of Western Canada’s largest conventional oil and gas producers, said it will continue to ramp up operations in the resource plays Cardium, Viking and Carbonates in Alberta.

North American gas companies have faced a challenging 2011, amid a weak gas price environment. Natural gas prices have been depressed for years now, driving oil and gas companies to move to liquids-rich regions.

Last month, natural gas futures on the New York Mercantile Exchange touched $2.231, their lowest since 2002.

For 2012, Penn West forecast capital budget of C$1.6 billion to C$1.7 billion before asset dispositions.

It expects production to average 168,500-172,500 barrels of oil equivalent per day (boe/d) in the year. In 2011, production averaged 163,094 boe/d.

Last year, wildfires had forced oil companies in Alberta -- the country’s largest energy-producing province -- to shut off tens of thousands of barrels of output.

For the October-December quarter, net loss was C$62 million, or 13 Canadian cents per share, compared with a net loss of C$37 million, or 8 Canadian cents per share, a year ago.

Production for the quarter was up about 2 percent at 168,801 boe/d.

Funds flow rose 43 percent to C$437 million, or 93 Canadian cents per share, driven by higher oil and liquids production as well as robust crude oil prices.

Shares of the company, which operates under the trade name Penn West Exploration, closed at C$21.65 on Wednesday on the Toronto Stock Exchange.

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