NEW YORK (TheStreet) -- Shares of Penn West Petroleum (PWE) are tumbling 23.17% to 63 cents on heavy trading volume on Monday afternoon after the oil and gas company said it may be in default on its financial covenants at the end of the second quarter.

"Our ability to continue as a going concern depends on the ability to enter into amending agreements with our lenders," the Calgary-based company said in a statement.

Penn West had long-term debt of C$1.86 billion, or $1.44 billion, as of March 31, according to Reuters.

The company said it may not meet debt targets including senior debt to EBITDA or total debt EBITDA if the current environment of low commodity prices continues.

"We are engaged in discussions with our lenders with a view to entering into agreements to amend these financial covenants prior to the end of the second quarter of 2016, which if successful will mitigate the risk of default," Penn West said.

It will also continue to pursue asset sales to further reduce debt and focus operations.

About 9.62 million of the company's shares changed hands so far today vs. its average volume of 1.2 million shares per day.

Separately, TheStreet Ratings Team has a "Sell" rating with a score of D- on the stock.

The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and generally high debt management risk.

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.

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