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Help to get out of ditch
For Penn West Energy Trust, the glass is definitely half full in these grim times.
“Over the past 15 years, we have probably been a company that tends to operate a little better in a downturn than in an upturn,” Chief Executive Officer Bill Andrew told analysts, in disclosing a capital budget for 2009 that starts at C$800 million (compared with C$1 billion this year), with the flexibility to move C$200 million on either side, depending on what happens to energy prices.
“If you maintain a reasonable balance sheet and stay strong there are quite a few people to help you out of the ditch,” he said.
Murray Nunns, the trust’s president and chief operating officer, is confident that key gains can be made in cost structure, aided by reduced oil sands activity that should free up more labor, while easing service costs.
Damage to junior market “We think there has been obvious structural damage to the junior market in Canada that is going to extend for a considerable period and we also think that with the debt leverage of some of the U.S. players that there may be opportunities,” he said.
Senior Vice President Hilary Foulkes said a continuing focus on conventional production, enhanced oil recovery and resource plays, combined with discipline and a clear idea of what the acquisition appetite looks like, are the fundamental principles behind a drive to grow through acquisition.
She said Penn West expects to close deals late this year or early next to unload 10 packages of non-core assets producing up to 16,000 barrels of oil equivalent per day in Alberta, British Columbia, Saskatchewan, the Northwest Territories and Wyoming.
—Gary Park
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