PennWest Energy Trust (PWE)

Q1 2010 Earnings Call

May 5, 2010 12:00 pm ET

Executives

William Andrew – Chief Executive Officer

Murray Nunns – President, Chief Operating Officer

Analysts

Andrew Fairbanks – Bank of America

Jonathan Fleming – Cormark Securities

Greg Shaw – TD Securities

Clifford Griffith – Private Investor

[Jason Frue – Credit Suisse]

Gordon Tate – BMO Capital Markets

Presentation

Operator

Welcome to the PennWest Energy Trust’s first quarter conference call and webcast. I would now like to turn the call over to Mr. William Andrew, CEO of PennWest Energy.

William Andrew

Good morning to everyone out there this morning from a very wintery Calgary. We’re paying the price this morning for what’s usually the advantage of living so close to the Rocky Mountains.

Welcome to PennWest’s 2010 first quarter financial and operating results conference call. With me this morning in Calgary, is our President and Chief Operating Officer Murray Nunns, and our Chief Financial Officer Todd Takeyasu. As well, we’ve got other members of our senior management team around the table.

PennWest Trust units are traded both on the New York Stock Exchange under the symbol PWE and on the Toronto Stock Exchange under the symbol PWT.UN. All references during this conference call are in Canadian dollars unless otherwise indicated and all conversions of natural gas and barrels of oil equivalent are done on a six to one conversion ratio.

Today, we’re pleased to report our operational results for the first quarter of 2010, and before I hand the call over to Murray for a much more detailed review of the quarter as well as some discussion, I just wanted to take a few minutes and sort of set the table for Murray a little bit on what I perceive as some of the highlights.

Firstly, something we want to make very clear is that our focus over the past five years with PennWest is becoming a lead oil for light oil production development and exploration in Canada and indeed, in North America. From a strategic point of view, this involved two large oil weighted corporate acquisitions, consolidation in key areas and the adaptation of the technology that really has sparked the shale gas revolution in North America as presently fueling a stampede to light oil plays in North America.

We believe this positions us extremely well and Murray will talk about that a little bit and highlight some of the plays that we’re pursuing and exactly how we’re positioned in light oil relative to most of our peers in North America.

Secondly, we will highlight the very significant progress that we made on debt reduction, and also, we’ll highlight the renewal of our syndicated banking facility, which occurred very recently.

Thirdly, we’ll talk a little bit about conversion. We are going to convert from an income trust to an E&P within the next little while, targeting towards the end of the year, and we’re very exciting about rejoining the ranks of North American E&P’s. We got a weight into light oil. That puts us in a favorable position. We believe the depth of our prospect inventory, particularly aimed towards light oil is second to none in North America.

Over the next six or seven months as we move towards conversion, we’ll be providing more details on an expanded capital program focused on our light oil rich oil resource plays and how we intend to blend growth with yield.

Certain information regarding PennWest transactions and results discussed during this conference call including management’s assessment of future plans and operations may constitute forward-looking statements under applicable securities laws and necessarily involve risks.

Participants are directed to PennWest’s new release, which we issued this morning to review the advisory notice therein. Participants are also cautioned that the included list of risk factors is not exhaustive. Official information on these other risk factors that could affect PennWest operations and financial results are included in reports on file with Canadian and U.S. securities regulatory authorities and may be accessed through the Sedar at www.sedar.com or the FCC website at www.fcc.gov.

And of course, any time, and all the time, we encourage you very much to visit our website which is www.pennwest.com and Jason and his group in investor relations do a good job in keeping that site up. We’ve got our latest investor presentation. We usually have some news clips with PennWest staff and management on it, as well as some of our interaction with the media. All of our financial results are on there as well as some operational information, and we do encourage you to go there and just have a look at what we think distinguishes PennWest from a lot of the pack right now.

During this conference call, certain reference to non-GAAP items may be made. Participants are directed to PennWests MD&A and financial statements available on our website as well as filings available on the website noted earlier to review the disclosure concerning non-GAAP items.

Following a review and update this morning, we’ll open the phone lines, as which time we’ll be pleased to answer your questions. With that, I’m going to turn the call over to Murray Nunns, our President and COO.

Murray Nunns

First off, we’ll take a quick run through on some of the financial results and hit some of the highlights. The funds flow forward in the first quarter was $344 million and were $0.81 per basic share, and this reflects the impact of some of the property dispositions in the first quarter.

Read the rest of this transcript for free on seekingalpha.com

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