Penn West Petroleum Ltd. (NYSE:PWE) announces 500 job cuts to regain competitiveness


Dallas, Texas 10/28/2013 (Financialstrend) – Penn West Petroleum Ltd. (NYSE:PWE) oil and gas exploration company has a market cap of $5.45 billion. It is based out of Canada. In its most recently concluded quarter the oil exploration firm has seen its sales dip by a staggering 34% on a quarter on quarter compare to 3QFY12. Its operating margins were down 13.2% over a trailing 12 month period and profit margins have gone down by 10.8% in the same time period. While it was able to account for a total of $2.38 billion in sales over the past 12 months, its net loss from operations has increased to $249 million.

In order to sustain its operations by bringing in efficiencies in its operations, the company has gone through a tough reorganization which led to more than 25% of its employees facing the axe from employee bench strength it had in January 2013. This announcement was made in mid August by management and indicated that they expect to foot close to $25 million in costs associated with severance.

Announcing the restructuring plan, Dave Roberts who is the President and CEO of Penn west has been quoted as saying, “Penn West has taken another series of focused steps to restore its competitiveness. We have now reduced the number of staff across the enterprise by over 550 from the beginning of the year. These actions will continue to drive cost improvements to our bottom line so our shareholders can measure the progress we are making.” The completion of the reduction in work force exercise is expected to lend the company more competitive and help improve its bottom line significantly starting 2014.

In spite of the proactive steps being taken by management, the oil firm attracted a downgrade from BMO Capital to market perform from a earlier outperform rating. Analyst have a price target of $12.51 per share on this stock.