NEW YORK (TheStreet) -- Penn West Petroleum  (PWE) stock is down 13.01% to $1.07 on heavy trading volume on Thursday after the company said it may change its debt covenants.

If current strip pricing trends continue, the company may not be in compliance with its financial covenants by the end of the 2016 second quarter, Penn West said in a statement. 

As of the 2015 fourth quarter, Penn West held $1.94 billion in long-term debt.

"We are considering several options that address the risk of default, including engaging with our bank lenders and senior noteholders to amend our existing financial covenants, reaching agreements on additional non-core property dispositions and monetizing favorable hedging positions, if approved by our lenders," the company said in a statement. 

Based in Calgary, Penn West is an exploration and production company focused on oil and natural gas. 

So far today, 3.57 million shares of Penn West have traded, well above the company's 30-day average of 2.21 million shares. 

Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings rates this stock as a "sell" with a ratings score of D. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally high debt management risk.

You can view the full analysis from the report here: PWE