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Penn West Petroleum Ltd. Message Board

  • rondo_74172 rondo_74172 Jan 9, 2013 9:47 PM Flag

    Penn West Exploration announces its 2013 capital budget


    well since Yahoo will not let me post the link you'll have to go to Penn West's website to read the announcement.

    Part of which is In 2013, Penn West plans to remain committed to the dividend model and to improving capital efficiencies and production reliability.

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    • Keep in mind that PWE remains "committed to the dividend model and improving capital efficiencies" BECAUSE it is cutting the capital budget almost in half. Frankly, it was excessive capital spending that forced PWE to load up on long-term debt, since the cash flow from operations did not support all of the capital investments (and payment of the dividend). The fact that PWE is "right-sizing" its business and "investing" dollars that generate immediate profits is exactly what they should have been doing over the last 18 months. Instead they invested a lot of money to figure out that they have a lot of oil, much of which cannot be developed profitably, particularly until Canada begins to ship oil/LNG from the west coast to Asia. It is nice to see that the adults on the PWE's Board have decided to worry about cash flow and not exploration, particularly since the assets (oil in the ground) will be available for development in the years ahead.

      Sentiment: Buy

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