Penn West Petroleum Ltd is set to rebrand to Obsidian Energy Ltd. This change of name comes after a torturous three-year period that has seen the company go through debt crisis, commodity price crash and accounting scandal. The new name will reflect the ideals of the new company. David French, the new chief executive officer of the Calgary-based oil and gas corporation, announced the re-engineering strategy in the recent past.
Speaking during the announcement, Mr. French said that the company does no resemble the Penn West of three years ago. With a name change, Obsidian Energy will focus on building a new reputation, which shall not be tainted by the past. In addition, David noted that the name change proposal would be presented to the shareholders for approval.
Penn West has been through several difficult situations. The company’s woes started in 2014 when it was revealed that their expenses that run into millions of dollars had been improperly classified. This revelation saw the company dig deeper into its books to correct the financial reports for 2013 and 2014. The report for 2014’s first quarter was also restated. Following the scandal, several class-action lawsuits came to the fore. However, all of these lawsuits have since been settled.
In 2013, the corporation had a net debt totaling $3 billion. Faced with dwindling revenues, the company sold a good portion of its assets to reduce the debt. By April this year, it had succeeded in reducing the net debt to just $384 million. Selling of assets has also changed the company’s outlook and operations. Obsidian will only be able to produce 28,000 barrels of oil a day, a significant drop from 135,000 barrels that the old Penn West used to produce. The company has since reduced its workforce from 1415 employees to only 407 employees. Find Related Information Here.
About Obsidian Energy
Obsidian Energy Ltd is a Calgary-based mid-sized oil and natural gas production company. After the change of name from Penn West Petroleum Ltd to Obsidian Energy, the new corporation will be listed as OBE on both TSX and NYSE. The company’s extensive restructuring has played a pivotal role in reducing its debt and addressing its accounting scandal. The company has well in Alberta.