Penn West slashes capital spending 90%, sees lower output

CALGARY, Alberta (Reuters) -- Canadian oil and natural gas producer Penn West Petroleum Ltd. cut its 2016 capital budget by as much as 90% from a year earlier, to weather a steep plunge in crude oil prices.

The company, which cut its capex to C$50 million ($35 million), said it expects to produce 60,000-64,000 boed this year, about 30% lower than its 2015 production estimate.

Penn West had cut its 2015 capital budget three times, eliminated about 35% of its workforce in September and stopped paying dividend from October.

"Given the present state of the commodity price environment, our 2016 capital budget reflects the reality of living within our means at current price levels and managing the business on a week-to-week basis," Chief Executive Dave Roberts said in a statement on Thursday.

Penn West said it continued to be in talks with potential buyers to divest non-core assets.

The Calgary-based company said proceeds from any asset sale would be used to cut debt rather than to fund capital program.

Up to Wednesday's close of 98 Canadian cents, Penn West shares had more than halved in 12 months on the Toronto Stock Exchange.