After plummeting over 70% in the last year, is Penn West Petroleum (NYSE: PWE) ready to rally along with oil prices? Penn West is one of the largest conventional light-oil producers in Canada with a land base of about 4.5 million acres.
PWE stock was riding high at $10.07 a share just about a year ago. The stock steadily declined from there before bottoming out at around $2.00 a share in early December 2014. It hasn’t moved much since.
Several moves by Penn West Petroleum have peaked interest in the stock including their ongoing debt reduction plan and plans to start driving profitable growth. According to a June 2015 Corporate Presentation the company is on target or beating 5 of 6 measures in the first year of their planned performance targets including a reduction in annual operating costs of $200 million and asset disposition proceeds of $1.05 billion.
Another positive move includes a strong capital focus on oil development in the Cardium and Viking plays. The Viking play is among the best in the Penn West Petroleum portfolio with low royalty rates and built-in infrastructures which minimize operating costs. As gas prices rise, which they will, the Viking play will yield high per barrel profits.
As Penn West Petroleum, Ltd (PWE) works to repair its balance sheet it is definitely a small cap energy stock to watch. PWE stock is currently at $1.75 per share. The 52-week low was $1.30 on March 16 2015, and the high $10.19 per share back in June 2014.