Penn West Petroleum Ltd (USA) (NYSE:PWE) To Detail Budget As Oil Prices Soar

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Penn West Petroleum Ltd (USA) (NYSE:PWE) will hold a press conference on January 5th as it moves to detail its capital budget and corporate update for 2017. The media briefing comes on the heels of an aggressive asset sales spree, late last year, which allowed the company to trim its debt.

Rising Oil Prices

Oil prices soaring above the $50 a barrel mark has reinvigorated hope of an impressive year for the oil company, which according to some investors is undervalued in the Western Canadian sedimentary basin. Production cuts by OPEC and non-OPEC members are expected to provide support for oil prices, which could see them rising to highs of $60 a barrel further helping the company’s earnings.

Oil prices rising above the $60 a barrel mark should be good news for Penn West, which is already looking at enhancing production in areas where production costs are low. As the company, moves to detail, its corporate update for the year it will be interesting to see what plans it has in store for its Alberta assets.

Alberta Assets Low-Cost Profile

Alberta remains one of the company’s most exciting assets given that operating costs at the basin currently stand at $11.50 a barrel of oil. The low level operating costs have allowed the company to ramp up well completions, as it looks to take advantage of oil prices soaring to highs of $60 a barrel.

Penn West Petroleum already enjoys a 44% return in the Alberta area at oil prices of $42 a barrel thanks to its robust well economics. Oil prices rising further should translate to increased returns from the area, which should go a long way in shoring the company’s earnings as well as share price in the market.

Improved production from areas with lower cost profile should go a long way in defining Penn West Petroleum year even as it moves to detail its budget and corporate update. Impressive earnings are already in sight for the current quarter as oil prices stabilize above the $50 a barrel mark.

Penn West Petroleum Was up by 1.69% in Tuesday trading session closing the day at highs of $1.80 a share.

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Adam Russell

Adam graduated from UCL in 1998 with an honors degree in Business Finance (BSc). He has spent the last two decades identifying undervalued companies in US markets, primarily in the healthcare and insurance industries. Outside of the financial world, Adam loves to spend long weekends fishing. Shoot me an email at [email protected]