CALGARY, 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
-------------------------------------------------- % % 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
-------------------------------------------------------- 2008 2007
2008 2007 --------------------------------------------------------
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
----------------------------- 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 ------------------------------------------ 2008 2007
2008 2007 ------------------------------------------ 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 -------------------------------------------------- % %
(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 http://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 ------------------------------------------- (millions,
except per unit amounts) 2008 2007 2008 2007
-------------------------------------------------------------------------
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
http://www.sedar.com/ and in the United States at
http://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 ------------------------------------------- (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
------------------------------------------- (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
http://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. DATASOURCE: Penn West Energy Trust CONTACT: PENN
WEST ENERGY TRUST, Suite 200, 207 - Ninth Avenue S.W., Calgary,
Alberta, T2P 1K3, Phone: (403) 777-2500, Fax: (403) 777-2699, Toll
Free: 1-866-693-2707, Website: http://www.pennwest.com/; Investor
Relations: Toll Free: 1-888-770-2633, E-mail: ; William Andrew,
CEO, Phone: (403) 777-2502, E-mail: ; Jason Fleury, Manager,
Investor Relations, Phone: (403) 539-6343, E-mail:
Copyright