(Adds company and industry background, share move)
May 16 (Reuters) - Canadian oil and gas producer Penn West
Petroleum Ltd PWT.TO PWE.N said on Monday it may default on
its financial covenants at the end of the second quarter and
raised doubts about its ability to continue as a going concern.
Penn West had long-term debt of C$1.86 billion as of March
31, or $1.44 billion at current exchange rates.
The company said it was in talks with lenders on amending
its financial covenants, which if successful would reduce the
risk of default.
Penn West said it would try to raise money by selling more
assets and would seek funding from investors.
The Calgary-based company, like other oil and gas companies,
is suffering from a near-60 percent slump in global crude prices
LCOc1 since mid-2014.
The plunge has pushed at least 28 publicly traded North
American oil and gas producers to seek bankruptcy protection
since early 2015, according to a Reuters review of regulatory
filings.
Penn West, which reported a smaller first-quarter loss on
Monday due to lower expenses, said total production fell 18.9
percent to 77,010 barrels of oil equivalent per day in the three
months ended March 31.
The company slashed its budget by as much as 90 percent in
January. It also cut about 35 percent of its workforce in
September and stopped paying dividend from the next month in an
effort to reign in spending.
Penn West's Canada-listed and U.S.-traded shares were up
about 1 percent in early trading.
Up to Friday's close, the Toronto shares had fallen about 59
percent in the past year and 10.3 percent since the start of the
year.
($1 = 1.2918 Canadian dollars)