* Q3 production averaged 178,124 boe/d
* Q3 earnings per unit C$0.02 vs C$2.73 a year earlier
* Says sees 2010 avg production 170,000-180,000 boe/d
* Lowers 2009 capital budget but spending more in 2010
* Units drop 0.5 pct (Recasts and adds details)
CALGARY, Alberta, Nov 5 (Reuters) - Profit at Penn West Energy Trust PWT_u.TO was hit by plunging oil and gas prices in the third quarter, dropping 99 percent from a year-before quarter in which earnings had been boosted by one-time gains.
The oil producer, Canada’s largest conventional oil trust, said on Thursday that net income fell to C$7 million ($6.59 million), or 2 Canadian cents per trust unit, in the quarter from C$1.06 billion, or C$2.73 per trust unit, in the same quarter of 2008, when returns were inflated by gains from the company’s hedging program.
Still, the result beat the average analyst forecast for a loss of 6 Canadian cents per unit.
It was Penn West’s first profit of 2009, and came as the company further cut capital spending and production. The trust said it expects its capital spending this year to be between C$650 million and C$700 million, compared with its August forecast of C$600 million to C$825 million.
Penn West said it is budgeting capital spending of C$800 million to C$900 million in 2010 as it looks to benefit from stronger oil prices,.
It forecasts average 2010 production of 170,000 to 180,000 barrels of oil equivalent per day. In the third quarter it pumped 178,124 boed, down 6 percent from the year-before quarter.
Penn West’s funds flow, the cash used for distributions to shareholders and to pay for new projects and drilling, fell 47 percent to C$349 million, or 83 Canadian cents per unit.
Penn West and most other Canadian oil companies have reported lower third-quarter results on sharply lower oil and gas prices.
During the quarter, benchmark oil prices averaged $68.24 a barrel, down 42 percent from a year earlier. Natural gas averaged $3.44 per million British thermal unit on the New York Mercantile Exchange, down 62 percent.
Penn West’s revenue fell 35 percent to C$800 million.
The company said it sees 2009 average production in range of 175,000 to 180,000 barrels of oil equivalent per day.
Penn West units were down 10 Canadian cents at C$18.50 at midday on Thursday on the Toronto Stock Exchange. The units have dropped 11 percent over the past 12 months. ($1=$1.07 Canadian) (Reporting by Scott Haggett and Koustav Samantan; editing by Peter Galloway)