12:47pm: The Royals informed Penny that there wasn't a good chance of him making the roster, and the two sides agreed to part ways so that Penny could seek out a better opportunity, according to MLB Daily Dish's Chris Cotillo (Twitter links).
Kansas City did add Bruce Chen roughly two weeks after agreeing to a minor league deal with Penny, which likely diminished his chances at making the club.
Penny was signed back in January and stood to earn a $1MM base salary with another $1.5MM available via incentives if he made the team. However, the right-hander was hit hard in a pair of Spring Training appearances, yielding seven runs on 13 hits (two homers) and a walk with just one strikeout in four innings of work.
The former National League All-Star hasn't appeared in the Majors since a 28-inning stint with the Giants in 2012, and he's posted just a 5.41 ERA over his past 209 2/3 big league innings. He has a 4.26 ERA with 6.0 K/9 and 2.9 BB/9 in 1899 career innings at the Major League level between the Marlins, Dodgers, Giants, Tigers, Red Sox and Cardinals.