The Calgary-based company had a net loss of $67 million or 14 cents per share in the quarter.
That compared with year-earlier net income of $138 million or 29 cents per share.
In the previous quarter, Penn West's net income was $235 million or 50 cents per share.
The big swing was mainly due to unrealized losses or gains on the company's risk-management contracts, partially offset by unrealized foreign exchange gains and losses.
By other measures, Penn West had a more stable quarter.
Revenue was $840 million, down from $861 million a year earlier. Funds flow was $344 million or 72 cents per share, down from $348 million or 74 cents per share. Production fell to the equivalent of 160,339 barrels of oil per day from 161,323 barrels per day.
In the second quarter of this year, Penn West had $774 million of revenue, $272 million or 57 cents per share of funds flow and the equivalent of 163,181 barrels per day of oil, gas and liquids production.
Penn West agreed in principle last month to sell $1.3-billion worth of its non-core properties, representing the equivalent of 12,000 barrels per day of production.
The Calgary-based company says it will use funds from the sale to repay a portion of the money drawn on its credit facilities.
The company has been positioning itself to concentrate on light-oil plays, particularly along the Cardium formation in southern Alberta.