- Penn West Petroleum (PWE +44.5%) surges more than 40% following late Friday's news that it agreed to sell all of its Saskatchewan assets, including its Dodsland Viking area, for $975M.
- “The sale is a definitive step which will help to change the narrative from constant discussions around its debt toward constructive conversations around Penn West’s recent performance in its remaining Cardium area,” Raymond James analyst Jeremy McCrea writes as he upgrades shares to Outperform from Sell.
- PWE says it will now target growing its Cardium and Viking positions in Alberta and plans to continue selling assets outside its primary areas of focus; PWE’s Cardium oil wells have been some of the best revenue generators in the Canadian industry over the last year, Raymond James says.
- PWE got an attractive price for the properties, reflecting closely-held Teine Energy’s ability to pay up, with Teine paying ~15x the debt adjusted cash flow of the assets vs. recent deals of ~7x, Desjardins Capital says.