Penn West Announces $355M Non-Core Asset Disposition

PENN WEST PETROLEUM LTD.

("Penn West", the "Company", "we", or "our") is pleased to announce that it has signed an agreement to sell non-core assets located in south central Alberta for expected proceeds of approximately $355 million to a private company. The assets are currently producing approximately 7,500 barrels of oil equivalent ("boe") per day (weighted approximately 80 percent toward natural gas and natural gas liquids). The disposition represents less than five percent of the Company's proved and probable reserve base, estimated at December 31, 2013, to be 625 million boe. Subject to the satisfaction of customary regulatory and other closing conditions, the Company expects the transaction to close in early December 2014. CIBC World Markets Inc. acted as financial advisor to Penn West on the transaction. The sale provides attractive sale metrics of approximately $47,000 per flowing barrel. The disposition further reduces Penn West's well bore count by approximately 2,250 gross wells, which is expected to have a favourable impact on the Company's asset retirement obligation. These assets are considered non-core to Penn West and were not allocated any current or future development capital under the Company's long-term plan. Dave Roberts, President and CEO commented, "Following closing of this sale, Penn West will have completed over $1 billion in asset sales within the first year of our long-term plan. Further, as a result of these combined divestments, a favourable commodity price environment early in the year and strong operational improvements, we will have reduced our debt position by over $1.2 billion during that same period – a positive step forward in our improvement story. In November 2013, the Company announced a plan to reduce its debt through the disposition of non-core producing and non-producing assets in the range of $1.5 to $2.0 billion. We are now directing our disposition efforts to non-producing assets as we continue to increase the focus on our core areas and improve our financial flexibility through a considerably stronger balance sheet."