Penn West Petroleum (TSE:PWT), a Canadian oil and natural gas producer, fell to the lowest intraday price in a week after planning to cut 10 percent of its workforce and slash dividend by almost half and as its chief executive officer stepped down.
Penn West shares fell as much as 5 percent to C$10.36, the lowest since May 29, before trimming losses to C$10.67 at 1:43 p.m. in Toronto on Wednesday.
Murray Nunns will step down as president, chief executive officer and a board member on July 1, after eight years at the helm, and David Roberts, former chief operating officer of Marathon Oil Corp. (NYSE:MRO), will take over as president and chief executive officer on June 19, the Calgary, Alberta-based company said in a statement on Tuesday.
Penn West will focus on operating the business in a more efficient manner and lowering expenses under the new CEO, according to the statement. As part of that plan, the company will be looking at staffing levels and expects to reduce 10 percent of its staff over the next few weeks and will cut its third-quarter dividend to 14 cents a share from 27 cents a share.
“We will be looking for a huge step change in both where capital is spent as well as the efficiency of each dollar invested,” the company said, citing Chairman Rick George.
Penn West is also forming a special committee to look for strategic alternatives to increase shareholder value, including financing alternatives, asset sales, joint ventures or other business combinations. The company anticipates the process to complete by year-end.
"Penn West has many high quality assets but the company has yet to unlock their complete value," George was quoted as saying in the statement.
Penn West confirmed its full-year production and capital guidance remain unchanged. Penn West is struggling to swing back to a profit after reporting its third quarterly loss in a row in early May.
The stock has lost approximately 22 percent over the past 12 months, compared with an 8 percent gain for the benchmark S&P/TSX Composite index (TSE:OSPTX).