December 10, 2018

Penn West Petroleum Ltd (PWT)

 

 

 

Penn West Petroleum Ltd. (PWT) is a Canadian oil company that specializes in the production and exploration of light oil properties in Canada.  They are based in Calgary, Alberta and have established a sizeable stable of holdings that includes over six million acres across western Canada.  They are now one of the largest conventional oil and natural gas companies in North America.  Penn West’s commitment to providing long-term value to shareholders through maximizing the efficiency of operations along with strategic purchases of long-life oil properties, mirrors that of many of their competitors.  They site their diversified portfolio, specialized technical teams, advanced 3-D seismic technology, a strong balance sheet, and experienced management team, among the strengths that set them apart.

 

Penn West (PWT) has extensive holdings of multiple types of profitable hydrocarbons.  Currently, roughly 53% of total production is allocated to light oil, 10% to heavy oil products, and 37% is natural gas-related.  In each of these key sectors Penn West has some of deepest pools and most profitable “sweet spots’ on record.  These properties are located across the sedimentary basin of western Canada in British Columbia, Alberta, southern Saskatchewan, and southwest Manitoba.  Some of these pools were not recoverable in the past, but due to recent advances in extraction methods, these properties have suddenly become much more valuable.  The waterflood programing technology that has become popular in the field is quickly developing and improving profits on a consistent basis.  Other extraction improvements such as the use of carbon dioxide have also catapulted Penn West (PWT) forward in recent years.  Penn West believes that this focus on improving extraction efficiency is key in their quest to maximize returns to shareholders and they intend to make it a long-term strategic goal.

 

One of the unique aspects of the Penn West (PWT) model is their emphasis on aboriginal relations.  I believe this could play a major role in their ability to maximize their extraction potential in the future, and it is also advantageous for the country as a whole.  Siting such important areas as relationship building, education opportunities, economic development, employment opportunities, and community participation, Penn West appears to provide more than the standard lip service to this sometimes controversial issue.

 

Penn West (PWT) has more than 2,000 employees and is a stable presence on the Canadian energy scene.  The third quarter of 2011 saw a 30% increase in year-over-year revenues from 2010, and reached an overall total of $348 million.  Income from the quarter rose to $138 million.  The stock is currently trading around $21.44.  This is closer to its 52-week high of $28.20 than its low of $13.22.  Even at this relatively high price, it still has a reasonable Price-to-Earnings ratio of 14.48.  The large market cap (almost 10 billion) and annual dividend of $1.08 (5% dividend ratio) make Penn West a legitimate competitor for your energy investment dollar on the crowded TSX.  I believe there might be slightly better-valued companies out there at the moment, but there is little doubt that PWT is a solid company and will remain highly profitable for the foreseeable future.

 

Penn West (PWT) Technical Analysis:

PWT trend analysis

PWT is trading on a up trendGet your Free PWT trend analysis report.

Penn West (PWT) Stock Graph:

TSE PWT

Penn West (PWT) Dividend Metrics:

TickerNamePriceDividend YieldPayout RatioDEBT_TO_MKT_CAPDividend Growth 5 yearsDividend Growth 1 years
PWTPenn West Petroleum Ltd25.144.3303.540.2510306-17.91227-31.66667