Canadian oil and gas producer Penn West Petroleum Ltd (PWT.TO) 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 $1.86 billion as of March 31, or US$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.

Shares in Penn West plunged to penny-stock status Monday, settling at 82 cents on the Toronto Stock Exchange, a decline of nearly 22 per cent from Friday's close.

Up to Friday's close, the Toronto shares had fallen about 59 per cent in the past year and 10.3 per cent since the start of the year.

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 per cent 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 per cent of its workforce in September and stopped paying dividend from the next month in an effort to reign in spending.

--With files from The Canadian Press