Penn West has announced that it has successfully closed the previously announced sale of all of its Saskatchewan assets for cash consideration of approximately US$975 million, subject to closing adjustments. The company will offer the net cash proceeds from the sale to its lenders and noteholders at par on a pro rata basis.
"This transaction marks a significant turning point for Penn West. We have worked tirelessly to achieve top-tier performance on all operating fronts in our core areas and now with our re-constituted balance sheet and capital structure we will move our leverage metrics to top tier status as well", David Dyck, Senior Vice President and Chief Financial Officer of Penn West commented. "We expect to be in full compliance with all of our financial covenants at the end of the second quarter and anticipate the removal of the going concern note from our financial statements in the near future. As the benefits of our improved capital structure become more visible to investors over the coming months, we believe the market will close the valuation gap in our stock price. With our past largely behind us and our prospects bright, Penn West is now a very compelling value proposition for investors."
The company will continue to execute on the second phase of our asset disposition programme over the coming months in order to high-grade our portfolio and continue to reduce our cost structure. Penn West expects to provide an update of our ongoing plans along with second quarter financial results in early August 2016.
Adapted from a press release by Louise Mulhall
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