Penn West announces its results for the third quarter ended September 30, 2008
Tue Nov 11, 10:30 PMCALGARY, Nov. 11 /PRNewswire-FirstCall/ - PENN WEST ENERGY TRUST (TSX - PWT.UN; NYSE - PWE) is pleased to announce record net income and strong funds flow for the third quarter ended September 30, 2008
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Financial
- Funds flow(1) of $662 million in the third quarter of 2008 was
91 percent higher than the $346 million realized in the third quarter
of 2007. On a per unit-basis(1) basic funds flow increased to
$1.73 per unit in the third quarter of 2008, an increase of
20 percent from $1.44 per unit in the third quarter of 2007.
- Record net income of $1,062 million ($2.78 per unit-basic) in the
third quarter of 2008 compared to net income of $138 million
($0.57 per unit-basic) in the third quarter of 2007. The significant
increase in net income in the third quarter was primarily due to
gains on risk management activities. Penn West hedges a portion of
its forward production to protect its balance sheet as well as a
portion of its planned distribution and capital programs.
- The netback(1) of $43.33 per boe(2) in the third quarter of 2008 was
33 percent higher than the third quarter of 2007.
Operations
- Production averaged 190,177 boe per day in the third quarter of 2008
compared to 125,345 boe per day reported in the third quarter of
2007.
- Reported crude oil and NGL production averaged 106,898 barrels per
day and natural gas production averaged 500 mmcf per day in the third
quarter of 2008.
- Capital expenditures were $232 million in the third quarter of 2008
including $6 million of net asset dispositions. A total of 98 net
wells were drilled with a success rate of 98 percent.
Business Environment
- In the third quarter of 2008, WTI NYMEX ("WTI") crude oil prices
reached a new all time high closing above US$145.00 per barrel in
July. Subsequent to July, turmoil in the credit markets led to
concerns that world economic growth will slow and reduce global
energy demand, in turn leading to a fall in WTI crude oil to US$65.00
in October 2008. WTI crude oil averaged US$118.13 per barrel for the
third quarter compared to US$75.33 in the third quarter of 2007. For
the first nine months of 2008, WTI crude oil has averaged US$113.44
per barrel compared to US$66.26 per barrel in the first nine months
of last year.
- Natural gas prices have trended similarly to crude oil prices to date
in 2008, increasing in the first half of the year before peaking in
July. Concerns about a slowing North American economy and projected
increases in natural gas production from the continental U.S. put
pressure on natural gas prices subsequent to July. The AECO Monthly
Index price for natural gas averaged $8.78 per GJ in the third
quarter compared to $5.32 per GJ in the third quarter of 2007. For
the first nine months of 2008, the AECO Monthly Index has averaged
$8.14 per GJ compared to $6.46 per GJ in the first nine months of
2007.
(1) The terms "funds flow", "funds flow per unit-basic" and "netbacks"
are non-GAAP measures. Please refer to the "Non-GAAP Measures
Advisory" and "Calculation of Funds Flow" sections below.
(2) Please refer to the "Oil and Gas Information Advisory" section below
for information regarding the term "boe".
Financial Markets
- Penn West's Board of Directors and Management have been monitoring
the unusual developments in the credit markets since mid-2007 and
have taken several steps to defensively position Penn West. In
January 2008, we placed a 3-year $4.0 billion credit facility. We
then completed two transactions to add to our long-term private notes
which now total approximately $1.2 billion. At this time, we have
approximately $1.5 billion of unutilized credit capacity. Our risk
management policies have served to minimize our credit losses from
troubled counterparties. We have earmarked funds flow in excess of
distributions and capital expenditures to debt reduction. We remain
committed to modifying business strategies as required to ensure Penn
West's financial position remains sound.
- We actively hedged oil and natural gas prices for 2009 and currently
have WTI collars on 30,000 barrels per day of 2009 oil production at
US$80.00 per barrel by US$110.21 per barrel and 101,000 GJ per day of
2009 natural gas production under collars at $7.88 per GJ by
$11.27 per GJ. In October 2008, we monetized a portion of our crude
oil financial contracts which resulted in cash proceeds of
approximately $123 million. The proceeds were used to repay advances
on our syndicated credit facility. In conjunction with adjusting the
floor on our 2009 WTI collars, we also entered foreign exchange
contracts to swap $180 million of U.S. dollar revenue for 2009 to
Canadian dollars at an average rate of one U.S. dollar equals
1.27 Canadian dollars to fix the Canadian dollar floor price of the
collars. In November 2008, as part of our debt management strategy,
we entered into interest rate swaps that fix the interest rate at
2.27 percent on $250 million of floating interest rate debt for
two years.
Distributions
- Penn West's Board of Directors recently resolved to keep the Trust's
distribution level at $0.34 per unit per month, for the months of
November, December and January subject to maintenance of current
forecasts of commodity prices, production levels and planned capital
expenditures.
Financing
- On July 31, 2008, the Company issued (pnds stlg)57 million of senior
unsecured notes, through a private placement in the United Kingdom,
maturing in 2018 and bearing interest of 7.78 percent. In conjunction
with the issue of the notes, the Company entered into contracts to
fix the principal and interest of the placement at approximately
$114 million bearing interest in Canadian dollars at 6.95 percent.
The Company used the proceeds to repay advances on its bank
facilities.
HIGHLIGHTS
Three months ended Nine months ended
September 30 September 30
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% %
2008 2007 change 2008 2007 change
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Financial
(millions, except
per unit amounts)
Gross revenues(1) $ 1,235 $ 628 97 $ 3,683 $ 1,818 103
Funds flow 662 346 91 2,047 983 108
Basic per unit 1.73 1.44 20 5.49 4.13 33
Diluted per unit 1.71 1.43 20 5.41 4.09 32
Net income 1,062 138 670 817 48 1,602
Basic per unit 2.78 0.57 388 2.19 0.20 995
Diluted per unit 2.73 0.57 379 2.17 0.20 985
Capital expenditures,
net (2) 232 209 11 757 909 (17)
Long-term debt at
period-end 3,679 1,824 102 3,679 1,824 102
Convertible
debentures(3) 328 - 100 328 - 100
Distributions
paid(4) $ 388 $ 245 58 $ 1,108 $ 730 52
Payout ratio(5) 59% 71% (17) 54% 74% (27)
Operations
Daily production(6)
Light oil and NGL
(bbls/d) 78,762 50,861 55 80,792 49,874 62
Heavy oil (bbls/d) 28,136 21,922 28 27,646 21,937 26
Natural gas
(mmcf/d) 500 315 59 495 330 50
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Total production
(boe/d) 190,177 125,345 52 190,991 126,785 51
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Average sales price
Light oil and NGL
(per bbl) $ 110.45 $ 72.62 52 $ 103.65 $ 65.91 57
Heavy oil
(per bbl) 98.07 48.75 101 86.12 44.09 95
Natural gas
(per mcf) 8.49 5.86 45 8.88 7.02 26
Netback per boe
Sales price $ 83.23 $ 52.73 58 $ 79.73 $ 51.81 54
Risk management
(loss) gain (11.69) 0.98 (100) (9.03) 0.43 (100)
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Net sales price 71.54 53.71 33 70.70 52.24 36
Royalties (15.23) (9.46) 61 (14.27) (9.63) 48
Operating expenses (12.49) (11.18) 12 (12.01) (10.94) 10
Transportation (0.49) (0.47) 4 (0.49) (0.51) (4)
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Netback $ 43.33 $ 32.60 33 $ 43.93 $ 31.16 41
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(1) Gross revenues include realized gains and losses on commodity
contracts.
(2) Excludes business combinations.
(3) Assumed on the Canetic and Vault acquisitions.
(4) Includes distributions paid prior to those reinvested in trust units
under the distribution reinvestment plan.
(5) Payout ratio is calculated as distributions paid divided by funds
flow.
(6) Includes Canetic and Vault production from January 11, 2008 and
January 10, 2008, respectively.
DRILLING PROGRAM
Three months ended Nine months ended
September 30 September 30
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2008 2007 2008 2007
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Gross Net Gross Net Gross Net Gross Net
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Oil 85 46 60 39 189 102 137 83
Natural gas 97 40 41 21 202 92 95 46
Dry 2 2 2 2 8 8 7 6
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184 88 103 62 399 202 239 135
Stratigraphic
and service 10 10 8 6 36 34 27 21
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Total 194 98 111 68 435 236 266 156
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Success rate(1) 98% 97% 96% 96%
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(1) Success rate is calculated excluding stratigraphic and service wells.
UNDEVELOPED LANDS
As at September 30
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2008 2007 % change
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Gross acres (000s) 4,337 3,914 11%
Net acres (000s) 3,494 3,379 3%
Average working interest 81% 86% (5)%
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FARM-OUT ACTIVITY
Three months ended Nine months ended
September 30 September 30
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2008 2007 2008 2007
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Wells drilled on farm-out
lands(1) 32 41 111 147
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(1) Wells drilled on Penn West lands, including re-completions and re-
entries, by independent operators pursuant to farm-out agreements.
CORE AREA ACTIVITY
Net wells drilled for Undeveloped land
the nine months ended as at September 30, 2008
Core Area September 30, 2008 (thousands of net acres)
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Light oil 76 718
Heavy oil 100 1,142
Gas 60 1,634
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236 3,494
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TRUST UNIT DATA
Three months ended Nine months ended
September 30 September 30
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% %
(millions of units) 2008 2007 change 2008 2007 change
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Weighted average
Basic 381.5 240.5 59 372.5 238.6 56
Diluted 389.9 242.6 61 380.1 240.9 58
Outstanding as at
September 30 383.5 240.8 59
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In January 2008, Penn West issued approximately 124.3 million trust units
on the closing of the Canetic acquisition and approximately 5.6 million trust
units on the closing of the Vault acquisition. In July 2008, Penn West issued
approximately 3.6 million trust units on the closing of the Endev acquisition.
Letter to our Unitholders
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We are pleased to report that in the third quarter of 2008 Penn West generated funds flow of $662 million, an increase of 91 percent over the $346 million generated in the third quarter of 2007. The increased funds flow reflects the impact of strong crude oil prices and higher year-over-year production levels. We have maintained our cash distribution at $0.34 per unit per month since February 2006 and our Board recently approved this distribution level until at least January 2009. The current distribution level resulted in a payout ratio of 59 percent for the third quarter of 2008 and a 54 percent ratio for the first nine months of 2008. Penn West's net income was just over $1 billion for the quarter primarily due to unrealized hedging gains from our risk management contracts.
We realized strong netbacks of $43.33 per boe in the third quarter, compared to $32.60 per boe this quarter last year. In the third quarter, natural gas prices came off their yearly highs while crude oil prices began their decline after rising to record levels. The Canadian dollar also began to weaken against the U.S. dollar, partially mitigating the impact on our revenue from reduced commodity prices.
North American capital markets, and later global capital markets, began to broadly weaken largely due to concerns regarding credit issues at some of the world's largest financial institutions. We have closely monitored the developments in the debt capital markets since mid-2007 and have been acting defensively since that time. Earlier in the year, we syndicated a 3-year $4 billion bank credit facility. We subsequently termed-out a portion of our existing bank debt through the private placement of long-term notes which, in combination with notes issued in 2007, now total approximately $1.2 billion. The average term remaining on these notes is approximately nine years. Penn West had approximately $1.5 billion of unutilized credit capacity as of September 30, 2008, providing flexibility to continue the execution of our strategic and business plans for the foreseeable future.
We invested $232 million into our asset base in the third quarter bringing our total investment to $757 million (excluding corporate acquisitions) in the first nine months of 2008. Penn West was very active during the third quarter, drilling a total of 98 net wells including 46 net oil wells and 40 net gas wells. We continue to pursue a balanced approach towards near-term production additions with long-term reserve and production growth. Approximately 20 percent of our 2008 capital budget is being directed to projects which have the potential to add significant future production and reserves however produce no immediate cash flow or production volumes. Despite the challenges posed by current commodity price levels and the state of global financial markets, it is important for us to continue our assessment of the growth potential of Penn West's asset base while still being mindful of near-term realities. Our average production for the quarter was 190,177 boe per day. Production for the quarter was impacted by a number of events including unplanned maintenance activities. We now forecast that our pro forma average 2008 production, including Canetic and Vault production from January 1, will be slightly below our previous guidance of 195,000 boe per day.
Our management team is enthusiastic about our opportunities and has moved to implement our strategic plan which was ratified by our Board in mid-September. These strategies are focused on balancing conventional asset development with enhanced oil recovery and resource exploration. Our diverse asset base and focus on light oil will help cushion the impact of a prolonged period of financial uncertainty and economic recession. We will prudently manage Penn West by focusing our capital program on short-term, high netback development and continuing key exploration programs. We have the people, assets and balance sheet in place to weather this financial storm and prosper in the future. We believe that the best tactic we have to combat the financial turmoil is to efficiently and effectively execute our strategic plan.
On behalf of the Board of Directors,
(signed) "William E. Andrew" (signed) "Murray R. Nunns"
William E. Andrew Murray R. Nunns
Chief Executive Officer and President and Chief Operating
Director Officer
Calgary, Alberta
November 10, 2008
Outlook
This outlook section is included to provide unitholders with information as to our expectations as at November 10, 2008 for production, funds flow and net capital expenditures for 2008 and readers are cautioned that the information may not be appropriate for any other purpose. This information constitutes forward-looking information. Readers should note the assumptions, risks and disclaimers under "Forward-Looking Statements".
Oil prices reached record levels early in the third quarter of 2008 then declined subsequently as the turmoil in the credit markets led to concerns that world economic growth will slow and reduce global energy demand. Natural gas prices have trended similar to oil, also peaking in July and softening afterward. Partially offsetting the decline in energy prices was a significant decline in the Canadian dollar relative to the U.S. dollar. We believe that fundamentals for energy prices will recover in the next year to two years.
Including the Canetic and Vault production from January 1, Penn West forecasts 2008 pro forma average production to be slightly below our previous guidance of 195,000 boe per day. Production losses from pipeline, regulatory and other temporary production shut-ins are forecast to exceed previous estimates.
Based on a fourth quarter 2008 average forecast WTI oil price of US$65.00 per barrel, an average natural gas price at AECO of $6.80 per GJ and an average CAD/USD exchange rate of 1.21, our pro forma funds flow forecast for the 2008 calendar year, as at November 10, 2008, is approximately $2.6 billion ($6.86 per unit-basic). Exit 2008 total debt (including working capital and convertible debentures) to trailing pro forma EBITDA is forecast to be less than 1.5. Excluding corporate acquisitions, our forecast 2008 capital expenditures are unchanged at approximately $1.0 billion.
Our prior forecast, released on August 7, 2008 with our second quarter 2008 results and filed on SEDAR at www.sedar.com, was also based on 2008 capital expenditures (excluding corporate acquisitions) of approximately $1.0 billion and pro forma production between 195,000 boe per day and 205,000 boe per day. At that time, we forecasted a 2008 average WTI oil price of US$118.43 per barrel, an AECO natural gas price of $8.43 per GJ and a CAD/USD exchange rate of par. Based on these assumptions, we forecasted funds flow between $2.8 billion and $3.0 billion ($7.40 to $7.90 per unit-basic).
As we look to 2009, we are cautious on the outlook for energy prices in the short term and have developed a base capital budget of $800 million, which includes the drilling of approximately 210 net operated wells. This budget can be expediently reduced to $600 million or expanded to $1 billion depending on the outlook for energy prices as we move forward. The current market turmoil has led to significantly higher credit spreads, has limited recent lending activity and has increased the marginal borrowing cost of banks. If these conditions persist, we expect that raising debt capital would become more onerous and that our borrowing costs will increase.
The advancement of Penn West's resource plays, enhanced oil recovery and oil sands projects is included at all potential budget levels. The capital program in the first quarter of 2009 is expected to be at least $200 million. Due to the extreme volatility in financial markets and the effect of the resulting decline in industry activity levels on capital efficiencies and operating costs, Penn West believes that further 2009 guidance is not meaningful at this time.
Financial Exposure to SemGroup, LP Creditor Protection Program
On July 22, 2008, one of Penn West's minor oil marketing counterparties, SemGroup LP ("SemGroup") entered creditor protection. Penn West sold oil to subsidiary companies of SemGroup in both Canada (SemCanada Crude) and the U.S. (SemCrude LP). Deliveries in Canada subsequent to July 22, 2008 and in the U.S. subsequent to August 1, 2008 are on a prepaid basis. In accordance with our credit policies, Penn West had requested and received a $20 million parental guarantee from SemGroup. After reviewing the facts and sequence of events in this case, Penn West management has concluded that these events could not have been detected earlier, by a standard credit risk program. Penn West recorded a provision of $18 million in the quarter ending September 30, 2008 to write-off its entire receivable from SemGroup.
Non-GAAP Measures Advisory
The above information includes non-GAAP measures not defined under generally accepted accounting principles ("GAAP"), including funds flow, netback and payout ratio. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other issuers. Funds flow is cash flow from operating activities before changes in non-cash working capital and asset retirement expenditures. Funds flow is used to assess the ability to fund distributions and planned capital programs. Netback or netbacks is a per-unit-of-production measure of operating margin used in capital allocation decisions. Operating margin is calculated as revenue less royalties and operating costs. Payout ratio represents distributions divided by funds flow and is used to assess the adequacy of funds flow to fund capital programs.
Calculation of Funds Flow
Three months ended Nine months ended
September 30 September 30
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(millions, except per
unit amounts) 2008 2007 2008 2007
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Cash flow from operating
activities $ 616 $ 316 $ 1,654 $ 930
Increase in non-cash
working capital 30 12 340 17
Asset retirement expenditures 16 18 53 36
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Funds flow $ 662 $ 346 $ 2,047 $ 983
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Basic per unit $ 1.73 $ 1.44 $ 5.49 $ 4.13
Diluted per unit $ 1.71 $ 1.43 $ 5.41 $ 4.09
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Oil and Gas Information Advisory
Barrels of oil equivalent (boe) are based on six mcf of natural gas equalling one barrel of oil (6:1). This could be misleading if used in isolation as it is based on an energy equivalency conversion method primarily applied at the burner tip and does not represent a value equivalency at the wellhead.
Forward-Looking Statements
Certain statements contained in this document constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of the "safe harbour" provisions of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In addition, statements relating to "reserves" or "resources" are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future. In particular, this document contains forward-looking statements pertaining to, without limitation, the following: the ability of Penn West to mitigate the potential adverse consequences to its financial position that could result from the ongoing turmoil in the credit and financial markets and the economy in general by, among other things, executing its strategic plan and exploiting its diverse asset base (see "Financial Markets" and "Letter to Unitholders"); future distribution levels (see "Distributions" and "Letter to Unitholders"); the ability of Penn West to fund its strategic and business plans for the foreseeable future using its credit facilities (see "Letter to Unitholders"); the nature of our business plan and strategic plan, our ability to execute such plans, and the potential benefits to be derived from the successful execution of such plans (see "Letter to Unitholders"); our belief that certain of our capital expenditures have the potential to add significant production and reserves in the future (see "Letter to Unitholders"); the disclosure contained under the heading "Outlook" and "Letter to Unitholders", which sets forth management's expectations as to commodity prices, U.S./Canadian dollar exchange rates, production volumes, funds flow, exit 2008 total debt to trailing pro forma EBITDA and net capital expenditures for the balance of 2008, the anticipated time horizon for the recovery of energy prices, our 2009 annual and first quarter capital expenditure budgets and the contents thereof, and the impact that the ongoing turmoil in the credit and financial markets could have on our ability to raise additional debt capital and our borrowing costs; and the extent of our exposure to losses as a result of SemGroup entering credit protection (see "Financial Exposure to SemGroup, L.P. Creditor Protection Program").
With respect to forward-looking statements contained in this document, we have made assumptions regarding, among other things: future oil and natural gas prices and differentials between light, medium and heavy oil prices; future capital expenditure levels; future oil and natural gas production levels; future exchange rates; the amount of future cash distributions that we intend to pay; our ability to obtain equipment in a timely manner to carry out development activities; our ability to market our oil and natural gas successfully to current and new customers; the impact of increasing competition; our ability to obtain financing on acceptable terms; and our ability to maintain existing production levels and add production and reserves through our development and exploitation activities. In addition, many of the forward-looking statements contained in this document are located proximate to assumptions that are specific to those forward-looking statements, and such assumptions should be taken into account when reading such forward-looking statements: see in particular the assumptions identified under the headings "Outlook" and "Distributions".
Although Penn West believes that the expectations reflected in the forward-looking statements contained in this document, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this document, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Penn West's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things: the impact of weather conditions on seasonal demand and ability to execute capital programs; risks inherent in oil and natural gas operations; uncertainties associated with estimating reserves and resources; competition for, among other things, capital, acquisitions of reserves, resources, undeveloped lands and skilled personnel; incorrect assessments of the value of acquisitions; geological, technical, drilling and processing problems; general economic conditions in Canada, the U.S. and globally; industry conditions, including fluctuations in the price of oil and natural gas; royalties payable in respect of our oil and natural gas production; changes in government regulation of the oil and natural gas industry, including environmental regulation; fluctuations in foreign exchange or interest rates; unanticipated operating events that can reduce production or cause production to be shut-in or delayed; failure to obtain industry partner and other third-party consents and approvals when required; stock market volatility and market valuations; OPEC's ability to control production and balance global supply and demand of crude oil at desired price levels; political uncertainty, including the risks of hostilities, in the petroleum producing regions of the world; the need to obtain required approvals from regulatory authorities from time to time; failure to realize the anticipated benefits of acquisitions, including the acquisition of Vault Energy Trust, Canetic Resources Trust and Endev Energy Inc.; changes in tax laws; changes in the Alberta royalty framework; uncertainty of obtaining required approvals for acquisitions and mergers; and the other factors described in Penn West's public filings (including our Annual Information Form) available in Canada at www.sedar.com and in the United States at www.sec.gov. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking statements contained in this document speak only as of the date of this document. Except as expressly required by applicable securities laws, Penn West does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
Penn West Energy Trust
Consolidated Balance Sheets
(CAD millions, unaudited) September 30, 2008 December 31, 2007
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Assets
Current
Accounts receivable $ 565 $ 277
Future income taxes 31 45
Other 105 46
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701 368
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Property, plant and equipment 12,545 7,413
Goodwill 1,999 652
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14,544 8,065
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$ 15,245 $ 8,433
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Liabilities and unitholders' equity
Current
Accounts payable and accrued
liabilities $ 622 $ 359
Distributions payable 131 82
Risk management 122 148
Convertible debentures 7 -
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882 589
Long-term debt 3,679 1,943
Convertible debentures 321 -
Risk management 18 -
Asset retirement obligations 627 413
Future income taxes 1,414 918
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6,941 3,863
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Unitholders' equity
Unitholders' capital 7,922 3,877
Contributed surplus 64 35
Retained earnings 318 658
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8,304 4,570
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$ 15,245 $ 8,433
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Penn West Energy Trust
Consolidated Statements of Operations and Retained Earnings
Three months ended Nine months ended
September 30 September 30
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(CAD millions, except per
unit amounts, unaudited) 2008 2007 2008 2007
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Revenues
Oil and natural gas $ 1,439 $ 616 $ 4,155 $ 1,803
Royalties (265) (109) (746) (333)
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1,174 507 3,409 1,470
Risk management (loss) gain
Realized (204) 12 (472) 15
Unrealized 1,109 (18) 79 (48)
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2,079 501 3,016 1,437
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Expenses
Operating 221 130 636 382
Transportation 9 6 26 18
General and administrative 39 17 110 51
Financing 51 25 151 66
Depletion, depreciation and
accretion 404 221 1,194 654
Risk management loss
- unrealized 7 16 - 19
Unrealized foreign exchange
loss (gain) 37 (33) 64 (37)
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768 382 2,181 1,153
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Income before taxes 1,311 119 835 284
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Taxes
Future income tax expense
(reduction) 249 (19) 18 236
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249 (19) 18 236
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Net income and comprehensive
income $ 1,062 $ 138 $ 817 $ 48
Retained earnings (deficit),
beginning of period $ (353) $ 885 $ 658 $ 1,460
Distributions declared (391) (245) (1,157) (730)
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Retained earnings, end
of period $ 318 $ 778 $ 318 $ 778
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Net income per unit
Basic $ 2.78 $ 0.57 $ 2.19 $ 0.20
Diluted $ 2.73 $ 0.57 $ 2.17 $ 0.20
Weighted average units
outstanding (millions)
Basic 381.5 240.5 372.5 238.6
Diluted 389.9 242.6 380.1 240.9
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Penn West Energy Trust
Consolidated Statements of Cash Flows
Three months ended Nine months ended
September 30 September 30
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(CAD millions, unaudited) 2008 2007 2008 2007
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Operating activities
Net income $ 1,062 $ 138 $ 817 $ 48
Depletion, depreciation
and accretion 404 221 1,194 654
Future income tax expense
(reduction) 249 (19) 18 236
Unit-based compensation 12 5 33 15
Risk management (gain) loss (1,102) 34 (79) 67
Unrealized foreign exchange
loss (gain) 37 (33) 64 (37)
Asset retirement expenditures (16) (18) (53) (36)
Change in non-cash working
capital (30) (12) (340) (17)
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616 316 1,654 930
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Investing activities
Acquisition of property,
plant and equipment - (64) (17) (480)
Disposition of property,
plant and equipment 6 9 11 57
Additions to property, plant
and equipment (238) (175) (751) (507)
Canetic, Vault and Endev
acquisition costs (1) - (29) -
Change in non-cash working
capital 31 76 4 40
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(202) (154) (782) (890)
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Financing activities
Proceeds from issuance of
notes 114 - 619 509
Redemption/maturity of
convertible debentures (5) - (29) -
Repayment of Canetic, Vault
and Endev facilities (43) - (1,600) -
(Decrease) Increase in
bank loan (155) 34 1,053 67
Issue of equity 12 8 49 26
Distributions paid (337) (204) (964) (642)
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(414) (162) (872) (40)
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Change in cash - - - -
Cash, beginning of period - - - -
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Cash, end of period $ - $ - $ - $ -
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Interest paid $ 35 $ 22 $ 127 $ 60
Income taxes paid $ - $ - $ 6 $ 5
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Investor Information
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Penn West trust units and debentures are listed on the Toronto Stock Exchange under the symbols PWT.UN, PWT.DB.B, PWT.DB.C, PWT.DB.D, PWT.DB.E and PWT.DB.F and Penn West trust units are listed on the New York Stock Exchange under the symbol PWE.
A conference call will be held to discuss Penn West's results at 1:00 p.m. Mountain Standard Time, 3:00 p.m. Eastern Standard Time, on November 12, 2008. The North American conference call number is 800-594-3615 toll-free or 416-644-3420 in the Toronto area. A taped recording will be available until November 19, 2008 by dialing 877-289-8525 or 416-640-1917 and entering pass code 21285860 followed by the pound sign. This call will be broadcast live on the Internet and may be accessed directly on the Penn West website at www.pennwest.com or at the following URL: http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2440680
Penn West expects to file its Management's Discussion and Analysis and unaudited interim consolidated financial statements on SEDAR and EDGAR shortly.
SOURCE Penn West Energy Trust
36.98 (0.32%)
