February 17, 2011 / 2:37 PM / 7 years ago

UPDATE 2-Penn West Q4 loss narrower than expected

* Q4 loss C$0.05/unit vs est loss of C$0.09/unit

* Faces output losses from Enbridge pipeline apportionments

* Ups FY budget to C$1.1-C$1.2 bln from C$1.0-C$1.2 bln

* Expects quarterly dividend of 27 Canadian cents per share.

(Recasts; adds details, share milestone)

Feb 17 (Reuters) - Canada’s Penn West Petroleum Ltd reported a narrower-than-expected quarterly loss, and said production losses persist from rationing at Enbridge Inc pipelines that ship oil exports to the United States.

Enbridge rationed space on some of its pipes after an electrical problem cut flows on one of its key lines for a week.

Penn West, which does not expect the rationing issues to be resolved before the end of the current quarter, still sees 2011 average production of 172,000-177,000 barrels of oil equivalent (boe) per day.

The company also said the issues at the partner-operated gas facility in the Swan Hills area resulted in an additional loss of about 3,500 boe per day.

The company, which changed its name from Penn West Energy Trust last month as it converted back into a corporate format, raised the lower end of its 2011 exploration and development capital program outlook to C$1.1-C$1.2 billion.

Penn West said its 2011 exploration and development capital program will be about 90 percent focused on light-oil projects.

It plans to focus on its resource plays in the Cardium in Alberta, the Colorado Viking in Alberta and Saskatchewan, Waskada in Manitoba and the Carbonates in northern Alberta.

Penn West, which drilled 319 net wells in 2010, widened net loss in the fourth quarter to C$21 million, or 5 Canadian cents a unit, from C$12 million, or 3 Canadian cents a unit, a year ago. Analysts on average had expected a loss of 9 Canadian cents per unit, according to Thomson Reuters I/B/E/S.

Funds flow, the cash it uses to pay out distributions to investors, fell to C$305 million, or 66 Canadian cents per unit, from C$366 million, or 86 Canadian cents per unit, last year.

Revenue for the company, which has 31 rigs currently running in the Western Canadian Sedimentary Basin (WCSB), fell 6 percent to C$782 million. WCSB includes southwestern Manitoba, southern Saskatchewan, Alberta and northeastern British Columbia.

Penn West’s total production fell to 166,148 barrels of oil equivalent per day from 170,164.

The company expects an initial quarterly dividend as a conventional corporation to be declared payable on April 15, 2011, with an expected initial payout of 27 Canadian cents per share.

Shares of the company closed at C$26.53 on Wednesday on the Toronto Stock Exchange. They have gained a third of their value in the last six months. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Don Sebastian)

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