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Profit drop, fresh CEO for Penn West Add to ...

Penn West Petroleum Ltd. , a big Calgary-based oil and gas producer, reported a big drop in net profits in the latest quarter, but its revenues jumped sharply as the company benefited from higher oil prices, which offset lower production.

Penn West said Wednesday it earned net profits of $271-million or $0.58 a share for the quarter ended June 30. That was down from earnings of $745-million or $1.72 a share a year earlier.

The 2010 results included major gains from asset dispositions.

Revenues rose to $920-million from $718-million as the company benefited from higher oil prices. But it was affected by fires and floods and other problems that squeezed output in the latest quarter.

Overall production in the quarter fell to 156,107 oil equivalent barrels a day from 163,700 a year earlier.

In a separate development, the company also announced its board had appointed president and COO Murray Nunns as the company’s new chief executive, effective immediately.

Former CEO Bill Andrew will become vice-chairman and Hilary Foulkes is the new chief operating officer.

“Extreme flooding in southern Saskatchewan and Manitoba, forest fires in the Slave Lake region and third party facility issues in the second quarter of 2011 have extended into the third quarter resulting in delays restoring production,” Nunns said in a letter to shareholders.

“Wet conditions across western Canada have delayed completion activity preventing further tie-ins of Q1 drilling. The combined effect of these factors is to delay volumes which will impact our annualized average production. We expect to recover production outages into the fourth quarter and our exit volume remains consistent with our previous guidance.”

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