Penn West names new CEO, sets dividend cut and layoffs
June 5, 2013 10:20 AM ET
TORONTO (Reuters) – Canada’s Penn West Petroleum Ltd named a former Marathon Oil Corp executive as CEO and said it would slash its dividend, cut 10 percent of its staff and review strategic options such as asset divestments and joint ventures.
The Calgary-based oil and gas producer, whose share price has fallen about 56 percent over the last two years, said late on Tuesday that it had appointed former Marathon Chief Operating Officer David Roberts as president and chief executive officer, effective June 19. He replaces Murray Nunns, who will retire from the company on July 1.
Penn West said it planned to focus on increasing efficiency, starting with a 10 percent workforce reduction over the next few weeks. The company had about 2,130 employees at the end of 2012.
For the third quarter, the company is cutting its quarterly payout to 14 Canadian cents a share from 27 Canadian cents to increase its financial flexibility, it said. Shares of Penn West were unchanged at C$10.90 in early trading in Toronto.
Penn West also said its board would form a special committee to explore such options as strategic financing alternatives, asset divestments, joint ventures and other business combinations.
The changes come barely a month after the company named two respected industry leaders to its board – former Suncor Energy Inc head Rick George as chairman and former Canadian Natural Resources head Allan Markin as vice chairman.
"We believe the announced CEO change signals a step forward in the ongoing reorganization and restructuring of Penn West," said BMO Capital Markets analyst Gordon Tait in a research note. "We are encouraged that the company appears to be making the difficult organizational and financial changes needed."
Tait and other analysts said, however, that Penn West was not out of the woods and still needed to improve operational efficiency, shed assets and strengthen its balance sheet.
"The company’s base operations are unsustainable today," said Barclays analyst Grant Hofer. This makes Penn West a unattractive as a takeover target and joint venture partner, he said.
The company said its outlook on full-year production and capital spending remained unchanged.
"Penn West has many high-quality assets, but the company has yet to unlock their complete value," Chairman George said in a release.
The company will maintain the second-quarter dividend at 27 Canadian cents a share and pay it to shareholders of record on June 28.
Roberts, who has more than three decades of operational expertise in the oil and gas business, will join Penn West’s board after he assumes the CEO position.
Statistics: Posted by yoda — Wed Jun 05, 2013 10:40 am
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I’d like to make a statement about the growing crisis in the Americas. It’s time for justice. It’s time for liberty. It’s time to end the ludicrous and archaic commitment to colonialist ideology. It’s time Sean Penn handed his Malibu estate back to the Mexicans.
Sean Penn pretends to be a friend of the developing world, but really he is not. To be fair, his recent call for the Falkland Islands to be returned to Argentina was an admirable strike against capitalist imperialism. Moreover, I and the entire North Korean press corps cheered him on when he flew to Iraq to parley with Saddam Hussein, or when he spoke about Hugo Chavez in such glowing terms. But there have always been hints that his sympathy isn’t really with the workers at all. Aside from that time that he spent 32 days in prison for hitting an extra, his net worth of an estimated $150 million is a bit of a giveaway.
His continued occupation of Malibu is an unacceptable mockery of national self-determination. The Mexicans owned that stretch of real estate well into the early 19th century and it was stolen by the Americans in a naked act of imperialist aggression. America’s claim over Malibu is tenuous and rooted in patriarchy. Sean Penn’s house is a mocking reminder of that brute chauvinism, with its high white walls and spacious interiors. Its swimming pool is an insult to the honour of the Mexican people.
Now, I know that some will say that the Mexicans never actually lived on Sean Penn’s estate. But how many of them have worked there? Think of the maids, the cleaners, the butlers, the pool boys, the cooks, the gardeners. Think of the sweat that has dripped pouring Martinis, or the blood that was spilt pruning the roses. Truly, Sean Penn’s estate is part of Aztlan.
If diplomatic discussions break down, who could blame Mexico for resorting to military action to reclaim Mr Penn’s estate? Not I. Some might say that it would be an act without legal sanction or genuine historical cause. But that’s not the point. The people of Mexico want Sean Penn’s estate, so they should have it. Because stealing stuff from the rightful owners is the only way to combat colonialism
Statistics: Posted by yoda — Wed Feb 15, 2012 7:02 am
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