Penn West to sell stake in Weyburn oil field

Penn West Petroleum Ltd. says it expects to get about $205 million cash from the sale of some non-core assets in southeast Saskatchewan, the second divestiture since the Calgary-based company chopped its workforce by 35 per cent.

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The Calgary-based oil and gas producer said Thursday it will reduce debt with proceeds from the sale of its 9.5 per cent working interest in the Weyburn unit.

Penn West also lowered its production guidance for 2015 by 2,000 barrels per day to a range of 84,000 and 88,0000 barrels per day on an oil-equivalent basis.

Once it closes the Weyburn deal and the $192.5 million sale of properties near Mitsue, Alta., as announced Sept. 15, Penn West will have raised a total of $810 million from dispositions surpassingthe goal of $650 million.

Its capital budget for this year remains $500 million and Penn West continues to expect operating costs at between $19.25 and $19.75 per oil-equivalent barrel.

Penn West announced on Sept. 1 that its workforce would be cut by 400 full-time employees and contractors, mostly at its head office in Calgary, as part of its efforts to reduce spending amid the recent decline in oil prices.

There have been significant job losses in the last twoyears at Penn West, with the workforce dropping from 2,350 employees in June 2013 to fewer than 1,000.

The company has also faced legal challengesfrom investors after accounting irregularities were discovered last year.