Wielding razor: Penn West Energy Trust
Penn West trims capital outlay plans
Calgary-based Penn West Energy Trust said it expected to spend between $600 million and $825 million on capital expenditure in 2009, well down from year-ago levels.
Penn West warned in December that it would significantly reduce capital plans for 2009 among a slumping oil price and plunging financial markets worldwide.
The company said industry costs had not yet declined to reflect the slump in commodity prices, and so it would aim to emphasize low-risk projects. This would include boosting production through low-cost production tweaks and lower-risk conventional oil and gas drilling over heavy oil development.
Penn West said it would spend between $250 million and $325 million on capital expenditure in the first half of 2009, down 50% from the same period in 2008.
Oil production in this period was expected to average 180,000 barrels of oi equivalent per day, it said.
However, the company said it was positioned to expand its capital programme “when commodity prices and industry costs improved from current levels”.