CALGARY, April 14, 2015 /PRNewswire/ - PENN WEST
PETROLEUM LTD. (TSX: PWT) (NYSE: PWE) ("Penn West", "we",
"our", "us" or the "Company") is pleased to announce that it
has entered into definitive agreements with Freehold Royalties Ltd.
(TSX:FRU) relating to the sale by Penn West of an 8.5 percent gross
overriding royalty in its working interests in a portion of the
Viking play located in the Dodsland area of Saskatchewan and certain of its existing
royalties and mineral title lands located in Alberta, Saskatchewan and Manitoba spanning through a variety of plays
for an aggregate cash consideration of $321
million, before normal closing adjustments. Closing is
expected to occur on or about May 6,
2015, subject to the receipt of regulatory approvals and the
satisfaction of customary closing conditions. TD Securities Inc.
acted as financial advisor to Penn West on the transaction.
The Company intends to use the proceeds from the sale of these
royalties to reduce its senior debt in accordance with the terms of
the previously announced agreements in principle with its lenders.
The proceeds represent approximately 50 percent of Penn West's
commitment to offer aggregate net proceeds of up to $650 million received from asset dispositions to
prepay at par any outstanding principal amounts owing to the
holders of our senior, unsecured notes.
Dave Roberts, President and CEO,
commented, "This transaction is a strong result for Penn West on
all measures and I am pleased with our team's ability to
consistently generate creative solutions in challenging
circumstances. This disposition marks a critical milestone in our
ongoing strategic focus to reduce debt and strengthen our balance
sheet without materially impacting EBITDA or production volumes. We
will continue to strengthen Penn West's long-term financial
sustainability and the execution of our light oil focused strategy
during this cyclical downturn in oil prices."
Forward-Looking Statements
Certain statements contained in this document constitute
forward-looking statements or information (collectively
"forward-looking statements") within the meaning of the "safe
harbour" provisions of applicable securities legislation.
Forward-looking statements are typically identified by words
suggesting future events or future performance. In particular, this
document contains forward-looking statements pertaining to, without
limitation, the expected closing date of on or about May 6, 2015 for the sale of the royalties and the
use of proceeds from the sale of the royalties. Although we
believe that the expectations reflected in the forward-looking
statements contained in this document, and the assumptions on which
such forward-looking statements are made, are reasonable, there can
be no assurance that such expectations will prove to be correct.
Readers are cautioned not to place undue reliance on
forward-looking statements included in this document, as there can
be no assurance that the plans, intentions or expectations upon
which the forward-looking statements are based will occur. By their
nature, forward-looking statements involve numerous assumptions,
known and unknown risks and uncertainties that contribute to the
possibility that the predictions, forecasts, projections and other
forward-looking statements will not occur, which may cause our
actual performance and financial results in future periods to
differ materially from any estimates or projections of future
performance or results expressed or implied by such forward-looking
statements. These risks and uncertainties include, among
other things: the possibility that we are unable to execute some or
all of our ongoing non-core asset disposition program on favourable
terms or at all, including the dispositions discussed herein,
whether due to the failure to receive requisite regulatory or other
third party approvals or satisfy applicable closing conditions or
for other reasons that we cannot anticipate; the possibility that
we will not be able to successfully execute our long-term plan in
part or in full, and the possibility that some or all of the
benefits that we anticipate will accrue to our Company and our
securityholders as a result of the successful execution of such
plan do not materialize; the impact of weather conditions on
seasonal demand and ability to execute capital programs; risks
inherent in oil and natural gas operations; uncertainties
associated with estimating reserves and resources; competition for,
among other things, capital, acquisitions of reserves, resources,
undeveloped lands and skilled personnel; geological, technical,
drilling and processing problems; general economic and political
conditions in Canada, the U.S. and
globally; industry conditions, including fluctuations in the price
of oil and natural gas, price differentials for crude oil produced
in Canada as compared to other
markets, and transportation restrictions; royalties payable in
respect of our oil and natural gas production and changes to
government royalty frameworks; changes in government regulation of
the oil and natural gas industry, including environmental
regulation; fluctuations in foreign exchange or interest rates;
unanticipated operating events or environmental events that can
reduce production or cause production to be shut-in or delayed,
including wild fires and flooding; failure to obtain regulatory,
industry partner and other third-party consents and approvals when
required, including for dispositions; failure to realize the
anticipated benefits of dispositions; changes in tax and other laws
that affect us and our securityholders; the potential failure of
counterparties to honour their contractual obligations; and the
other factors described in our public filings (including our Annual
Information Form) available in Canada at www.sedar.com and in the United States at www.sec.gov. Readers are
cautioned that this list of risk factors should not be construed as
exhaustive. The forward-looking statements contained in this
document speak only as of the date of this document. Except as
expressly required by applicable securities laws, we do not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements
contained in this document are expressly qualified by this
cautionary statement.
Non-GAAP Measures Advisory
This news release includes a reference to EBITDA, which is
earnings before interest, taxes, depletion and amortization and is
a non-GAAP measure not defined under International Financial
Reporting Standards ("IFRS"). For additional information relating
to non-GAAP measures, see our latest management's discussion and
analysis which is available in Canada at www.sedar.com and in the United States at www.sec.gov.
About Penn West
Penn West is one of the largest conventional oil and natural gas
producers in Canada. Our goal is
to be the company that redefines oil & gas excellence in
western Canada. Based in
Calgary, Alberta, Penn West
operates a significant portfolio of opportunities with a dominant
position in light oil in Canada on
a land base encompassing approximately 4.5 million acres.
Penn West shares are listed on the Toronto Stock Exchange under
the symbol PWT and on the New York Stock Exchange under the symbol
PWE.
SOURCE Penn West