The company is selling its Saskatchewan holdings to Viking-area producer Teine Energy for C$975 million (US$763 million).
The assets are equally split between medium and heavy oil properties in the west and Dodsland light-oil properties in the east.
Penn West is also selling C$140 million worth of Alberta assets. The transactions are expected to close this quarter.
Penn West last month warned it might default on its financial covenants, pending talks with its lenders.
