August 10, 2012
PENN WEST PETROLEUM LTD. (TSX: PWT) (NYSE: PWE)
is pleased to announce its results for the second quarter ended
June 30, 2012
The broad deployment of horizontal multi-stage fracture technology into primary development, secondary recovery, and exploration gives Penn West one of the largest inventories of low-risk light-oil projects in
. Through active portfolio management, we continue to position the company to drive this asset base forward. We anticipate Canadian crude oil prices strengthening over the next 12 months as slow and steady demand increases are amplified by improvements in North American pipeline infrastructure pushing Canadian crude into closer alignment with world oil pricing.
Capital programs during the first half of 2012 continued the evolution of Penn West into a leading light-oil exploration and development company. At the beginning of 2010, less than two percent of production came from horizontal wells while our base vertical wells accounted for 98 percent of our production. We anticipate that by the end of this year, 30 percent of Penn West's production will come from multi-stage fracture wells.
- Average production in the second quarter of 2012 was 163,181 boe [ 1 ] per day compared to 156,107 in the second quarter of 2011. During the second quarter of 2012, we completed significant turnaround and maintenance activities which resulted in up to 10,000 boe per day being off-line for portions of the quarter.
- We drilled 208 net wells in the first six months of 2012.
- Capital expenditures for the second quarter of 2012 net of property dispositions, totalled $310 million compared to $240 million for the second quarter of 2011. Second quarter activities were primarily focused on completions, tie-ins and facilities construction.
- Capital expenditures in the first six months of 2012, net of property dispositions, were $648 million compared to $676 million for the first six months of 2011.
- Funds flow [ 2 ] for the second quarter of 2012 was $272 million ( $0.57 per share - basic [ 2 ]) compared to $396 million ( $0.85 per share - basic) reported in the second quarter of 2011 due to reduced commodity price realizations.
- Net income for the second quarter of 2012 was $235 million ( $0.50 per share - basic) compared to $271 million ( $0.58 per share - basic) in the second quarter of 2011.
- In the second quarter of 2012, WTI crude oil prices averaged US$93.54 per barrel compared to US$102.55 per barrel for the second quarter of 2011.
- Edmonton light sweet oil traded at a discount of $10.32 per barrel compared to WTI during the second quarter of 2012 (2011 - $4.17 per barrel premium) and at a discount of $10.70 per barrel during the first quarter of 2012 (2011 - $4.77 per barrel discount).
- In the second quarter of 2012, the AECO Monthly Index averaged $1.83 per mcf compared to $2.52 per mcf in the first quarter of 2012 and $3.74 per mcf for the second quarter of 2011.
(1) Please refer to the "Oil and Gas Information Advisory" section below for information regarding the term "boe".