Penn West Petroleum Ltd. (NYSE: PWE) reported fourth-quarter results before the opening bell this morning. The Canadian light-oil producer recorded a loss of C$728 million, or C$1.49 per share for the fourth quarter. The loss was mainly due to C$742 million in impairment charges the company took on the quarter.

Backing out the loss, Penn West reported funds flow of C$216 million or $0.44 per share. That was 29% lower than the C$295 million or $0.62 per share the company reported in last year's fourth quarter. Lower funds flow was mainly the result of asset sales that the company has completed over the past year, as well as a shrinking capital budget.

In shrinking the company's asset base Penn West is also seeing lower production volumes. In the fourth quarter the company produced an average of 123,995 barrels of oil equivalent per day, which is 19% less than the 153,931 barrels of oil equivalent per day the company produced in the fourth quarter of 2012.

Penn West Petroleum is still in the early stages of a turnaround that sees the company now focusing on its industry-leading light-oil position in western Canada. This plan has resulted in the company shrinking its size by 35% while the dividends it has paid to investors have fallen by 47% so far. However, the company believes this plan has it in a better position to grow its profitability in the future.