Penn West Announces its Financial and Operational Results for the Year Ended December 31, 2016 and 2016 Reserves Results

CALGARY, March 15, 2017

"2016 was a year of reshaping and rebuilding for Penn West as we examined every aspect of our business to ensure we are well structured to thrive in today's commodity price environment," commented David French, President and Chief Executive Officer.

"Throughout 2016 we focused our efforts on three things. First, we simplified our balance sheet by completing our disposition program resulting in $1.4 billion in asset-sales in 2016, with an additional $65 million closed to date in the first quarter and a final $10 million to be completed shortly. These sales allowed us to reduce our debt by 76% in 2016 and significantly lower environmental liabilities, putting us on track to bring our Alberta Liability Management Ratio ("LMR") to two times by the end of 2017.

Second, we refocused our attention on operational efficiencies in a small number of key development areas where we hold industry leading positions. These changes are already bearing fruit, exhibited by a 12% increase in our cash margins, inclusive of hedging, year over year. Our portfolio offers an attractive balance of shorter-cycle opportunities including industry leading well rates in the Alberta Viking and cold flow manufacturing in Peace River, complemented by our mid-cycle Cardium integrated waterflood development. Our production mix is liquids-weighted and can be toggled higher or lower as we see fit. We are working the right assets and delivering their promise.

And lastly, we reshaped our year-end reserves to reflect a simpler and cleaner Penn West.  We received our first foothold reserve bookings for early results in our Cardium waterflood program, saw proceeds from sales from our divestment program exceed the change in our net asset value, and realigned our reserves in Peace River to shift from thermal to cold flow development. Our year-end results and reserves reflect the substantial underlying value of our new portfolio and provide a platform well positioned for growth and cash flow generation for years to come.

As we close the chapter on 2016, 2017 offers investors and stakeholders a platform focused on long-term value creation. The foundation of our portfolio of assets is best defined as leading positions in key development areas that will offer double-digit organic and self-funded growth in production over the course of 2017."

Penn West Results for the Three and Twelve Months Ended December 31, 2016