Yahoo Finance Canadian oil producers slash 2015 capital budgets
(Reuters) - Canadian oil producers Husky Energy Inc (Toronto:HSE.TO - News) and Penn West Petroleum Ltd (Toronto:PWT.TO - News) slashed their 2015 capital budgets due to a slide in crude oil prices.
Penn West, one of Canada's largest conventional oil producers, also cut its dividend to 3 Canadian cents per share from 14 Canadian cents.
Penn West and Husky join several Canadian oil producers such as Cenovus Energy Inc (Toronto:CVE.TO - News), MEG Energy Corp (Toronto:MEG.TO - News), Athabasca Oil Corp (Toronto:ATH.TO - News) and Tourmaline Oil Corp (Toronto:TOU.TO - News) in cutting investment plans for next year.
Oil prices have nearly halved in the past six months due to tepid demand growth and a supply glut, worsened by major exporter group OPEC's refusal to cut its output ceiling.
Husky, Canada's No. 3 integrated oil company, said its capital budget for 2015 would drop by a third to about C$3.4 billion ($2.92 billion).
The company, controlled by Hong Kong billionaire Li Ka-shing, said about three-quarters of the budget would go into exploration, development and production.
Penn West said its capital budget for 2015 would drop by 26 percent to C$625 million.
Despite the reduced capital spending, neither company forecast big cuts in production.
Penn West trimmed its 2015 production forecast by about five percent to 90,000-100,000 barrels of oil equivalent per day (boe/d).
Husky said it expected to produce 325,000-355,000 boe/d in 2015, compared with the 341,000 boe/d estimated for 2014.
The company said it would spend about C$5.1 billion on capital projects in 2014, up from the C$4.8 billion it had planned earlier, due to inclusion of the final costs of its Sunrise Energy oil sands project in Alberta.
The Calgary-based company said in October it had raised cost estimates on the project by nearly 19 percent to C$3.2 billion.
Penn West on Wednesday also scrapped a plan that had permitted shareholders to use their cash dividends to buy the company's shares.
Penn West's shares were up more than 1 percent at C$2.36, while Husky's stock was up 1 percent at C$23.65 on the Toronto Stock Exchange. Penn West's U.S.-listed shares were up 1.3 percent at $2.04.
Up to Tuesday's close, Husky's shares had fallen 30 percent this year. Penn West shares had slumped nearly 74 percent to C$2.35 on the Toronto Stock Exchange.
(Reporting by Narottam Medhora and Swetha Gopinath in Bengaluru; Editing by Saumyadeb Chakrabarty, Ted Kerr and Sriraj Kalluvila)
