Penn West Petroleum to prepay notes with proceeds of royalty sale

By Tali Rackner

Norfolk, Va., April 14 – Penn West Petroleum Ltd. plans to reduce its senior debt with the proceeds from its sale of an 8.5% gross overriding royalty in its working interests in a portion of the Viking play located in the Dodsland area of Saskatchewan and some of its existing royalties and mineral title lands located in Alberta, Saskatchewan and Manitoba, according to a press release.

The proceeds represent about 50% of Penn West's commitment to offer up to C$650 million of net proceeds received from asset dispositions to prepay at par any outstanding principal amounts owing to the holders of the company’s senior notes.

Closing on the C$321 million transaction (before normal closing adjustments) is expected to occur on or about May 6.

Penn West is a Calgary, Alta.-based energy company.

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