Penn West Petroleum Ltd. (TSX:PWT)(NYSE:PWE) recently completed a pretty remarkable turnaround thanks to an 11th-hour asset sale. That sale, along with a bevy of other recently announced transactions, has nearly completely eradicated its debt concerns. That said, the company still has assets left to sell. However, those sales could be tougher to complete after Alberta’s energy regulator made a surprise rule change.

Strong buyers only

Last week the Alberta Energy Regulator instituted tougher rules to govern M&A activity in the province. It now requires acquirers to show that their deemed assets exceed their deemed liabilities by two times or more after the purchase. Before that, buyers only needed to have deemed assets equal to deemed liabilities.

This new rule eliminates more than 200 companies from making acquisitions in the province, even though these producers met the previous standards. As such, this could limit the buyer pool, which could tamp down asset valuations.

Speaking out

Penn West Petroleum CEO Dave Roberts was one of the first to speak out against this new rule because it directly affects its near-term plans. He called the rule change “off the mark” and said it will “have an impact on the things we are doing.” Because of that, the company is taking a very active role to get this rule change reversed.

The reason this rule change could impact Penn West is that it is currently seeking to sell additional assets in Alberta.

Overall, the company has assets producing 20,000 barrels of oil equivalent per day on the market in both British Columbia and Alberta. It is hoping to fetch between $100 million and $200 million for these assets, but might not hit the high end of that target if potential buyers are unable to bid due to the new rule. In Roberts’ estimation, 70% of the would-be purchasers of Penn West’s marketed assets no longer qualify to make acquisitions under the new rules.

Investor takeaway

While its financial situation has vastly improved, Penn West Petroleum still would like to capture as much value for the assets it is selling as possible. That will only happen if it has multiple bidders competing for its assets, which might not take place under this rule change. Needless to say, it and other sellers are going to fight to get this edict overturned, so they can get the best value for the assets they need to sell.

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Fool contributor Matt DiLallo has no position in any stocks mentioned.