Loss comes after Calgary-based firm looked to shift focus to light oil production in Western Canada
CALGARY—Penn West Petroleum Ltd. recorded a $728-million net loss in the fourth quarter, mostly due to non-cash asset impairment charges related to the company’s disposal of natural gas assets as it focuses on light oil production in Western Canada.
The loss amounted to $1.49 per share and compared with a net loss of 16 cents per share, when the overall loss was $78-million, a year earlier.
Funds flow from operations declined 27 per cent to $216-million or 44 cents per share, mainly due to lower crude oil prices and lower production volumes as a result of asset dispositions in the fourth quarter of 2013.
The fourth quarter included $742-million of asset impairment charges related to property, plant and equipment related to non-core natural gas assets and lower reserve recoveries in its Manitoba properties.
The company said it’s doing better than expected with asset dispositions under a strategy adopted four months ago and the organization is 35 per cent smaller than a year ago.
“To date in 2014, we have benefited from stronger than planned commodity prices and a favorable currency climate; however, we remain conservative in our commodity outlook for the remainder of the year,” Penn West said in a statement.