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TheStreet Open House

Penn West Exploration Announces Its Financial Results For The Fourth Quarter Ended December 31, 2012 And 2012 Year-end Reserve Results

Stocks in this article: PWEPWT

The economic viability of Penn West's Cardium contingent resources is undetermined, as economic studies have not yet been completed. All of PROP's contingent resources are considered economic using Sproule's September 30, 2012 forecast prices.

Under the COGE Handbook and NI 51-101, naturally occurring hydrocarbons with a viscosity greater than 10,000 centipoise are classed as bitumen. The majority of the contingent resource at PROP will be recovered by thermal processes.

Please refer to our press release dated October 17, 2012 "Penn West Updates Asset Dispositions and Results of the Contingent Resources Studies" for further information.

Forward-Looking Statements

This press release contains forward-looking statements.  Please refer to our discussion on forward-looking statements set forth at the end of the management commentary attached below.

                             Penn West Petroleum Ltd.
                           Consolidated Balance Sheets

                                                             As at December 31
    (CAD millions, unaudited)                                   2012      2011

    Assets
    Current
                     Accounts receivable                    $    364  $    486
                     Other                                        79       104
                     Deferred funding assets                     187       236
                     Risk management                              76        39
                                                                 706       865
    Non-current
                     Deferred funding assets                     238       360
                     Exploration and evaluation assets           609       418
                     Property, plant and equipment            10,892    11,893
                     Goodwill                                  2,020     2,020
                     Risk management                              26        28
                                                              13,785    14,719
    Total assets                                            $ 14,491  $ 15,584

    Liabilities and Shareholders' Equity
    Current
                     Accounts payable and accrued
                     liabilities                            $    764  $  1,108
                     Dividends payable                           129       127
                     Current portion of long-term debt             5         -
                     Risk management                               9       114
                                                                 907     1,349
    Non-current
                     Long-term debt                            2,685     3,219
                     Decommissioning liability                   635       607
                     Risk management                              35        46
                     Deferred tax liability                    1,350     1,287
                     Other non-current liabilities                 5         9
                                                               5,617     6,517
    Shareholders' equity
                     Shareholders' capital                     8,985     8,840
                     Other reserves                               97        95
                     Retained earnings (deficit)               (208)       132
                                                               8,874     9,067
    Total liabilities and shareholders' equity              $ 14,491  $ 15,584
                            Penn West Petroleum Ltd.
                       Consolidated Statements of Income

                                                Three months ended         Year ended
                                                       December 31        December 31
    (CAD millions, except per share
    amounts, unaudited)                             2012      2011      2012     2011

        Oil and natural gas sales               $    791  $    992   $ 3,235  $ 3,667
        Royalties                                   (144)     (179)     (595)    (661)
                                                     647       813     2,640    3,006

        Risk management gain (loss)
            Realized                                   8       (13)       48      (63)
            Unrealized                                10      (253)      156        8
                                                     665       547     2,844    2,951

    Expenses
        Operating                                    243       271     1,019    1,036
        Transportation                                 7         7        29       29
        General and administrative                    46        30       172      142
        Restructuring                                 13         -        13        -
        Share-based compensation                     (12)       68       (10)      84
        Depletion, depreciation and impairment       598       308     1,525    1,158
        Gain on dispositions                        (279)      (21)     (384)    (172)
        Exploration and evaluation                    15        10        17       15
        Unrealized risk management (gain) loss         6       (23)        5      (25)
        Unrealized foreign exchange (gain) loss       22       (53)      (32)      38
        Financing                                     52        48       199      190
        Accretion                                     22        12        54       45
                                                     733       657     2,607    2,540
    Income (loss) before taxes                       (68)     (110)      237      411

        Deferred tax expense (recovery)              (15)      (48)       63     (227)

    Net and comprehensive income (loss)          $   (53)  $   (62)  $   174  $   638

    Net income (loss) per share
        Basic                                    $ (0.11)  $ (0.13)  $  0.37  $  1.37
        Diluted                                  $ (0.11)  $ (0.13)  $  0.37  $  1.36

    Weighted average shares outstanding (millions)
        Basic                                      478.9     471.1     475.6    467.2
        Diluted                                    478.9     471.2     475.8    467.4
                             Penn West Petroleum Ltd.
                      Consolidated Statements of Cash Flows

                                                Three months ended            Year ended
                                                       December 31           December 31
    (CAD millions, unaudited)                        2012     2011       2012       2011

    Operating activities
        Net income (loss)                         $   (53)  $  (62)  $    174  $     638
        Depletion, depreciation and impairment        598      308      1,525      1,158
        Gain on dispositions                         (279)     (21)      (384)      (172)
        Exploration and evaluation                     15       10         17         15
        Accretion                                      22       12         54         45
        Deferred tax expense (recovery)               (15)     (48)        63       (227)
        Share-based compensation                      (11)      61        (18)        75
        Unrealized risk management loss (gain)         (4)     230       (151)       (33)
        Unrealized foreign exchange loss (gain)        22      (53)       (32)        38
        Decommissioning expenditures                  (32)     (36)       (92)       (81)
        Change in non-cash working capital            178       83         37        (49)
                                                      441      484      1,193      1,407
    Investing activities
        Capital expenditures                         (348)    (594)    (1,752)    (1,846)
        Property dispositions (acquisitions), net   1,264       11      1,615        266
        Business combinations                           -        -          -       (166)
        Change in non-cash working capital              8       56       (168)       113
                                                      924     (527)      (305)    (1,633)
    Financing activities
        Increase (decrease) in bank debt           (1,267)     230       (496)       475
        Proceeds from issuance of notes                 -      137          -        212
        Repayment of acquired credit facilities         -        -          -        (39)
        Issue of equity                                 -        1          3        161
        Dividends paid                                (98)    (101)      (395)      (328)
        Settlement of convertible debentures            -     (224)         -       (255)
                                                   (1,365)      43       (888)       226

    Change in cash                                      -        -          -          -
    Cash, beginning of period                           -        -          -          -
    Cash, end of period                           $     -   $    -   $      -  $       -
                             Penn West Petroleum Ltd.
                  Statements of Changes in Shareholders' Equity

    (CAD millions, unaudited)
                                               Shareholders'    Other
                                                    Capital  Reserves    Deficit     Total

    Balance at January 1, 2012                    $   8,840    $   95    $   132   $ 9,067
    Net and comprehensive income                          -         -        174       174
    Share-based compensation                              -        27          -        27
    Issued on exercise of options and share rights       28       (25)         -         3
    Issued to dividend reinvestment plan                117         -          -       117
    Dividends declared                                    -         -       (514)     (514)
    Balance at December 31, 2012                  $   8,985    $   97    $  (208)  $ 8,874

    (CAD millions, unaudited)
                                               Shareholders'    Other    Retained
                                                    Capital  Reserves    Earnings    Total

    Balance at January 1, 2011                    $   9,170    $    -    $  (610)  $ 8,560
    Elimination of deficit                             (610)        -        610         -
    Net and comprehensive income                          -         -        638       638
    Implementation of Option Plan and CSRIP               -        81          -        81
    Share-based compensation                              -        41          -        41
    Issued on exercise of options and share rights      188       (27)         -       161
    Issued to dividend reinvestment plan                 92         -          -        92
    Dividends declared                                    -         -       (506)     (506)
    Balance at December 31, 2011                  $   8,840    $   95    $   132   $ 9,067

MANAGEMENT COMMENTARY

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