Cost cutting measures continue across Canada's energy landscape
CALGARY—Pengrowth Energy Corp., a producer with assets in the Cardium formation among others, has moved to counter low oil prices by cutting its dividend. The news follows other oil field cuts Sept. 1, which saw ConocoPhillips announce layoffs and Penn West eliminate its dividend, cut jobs and slash its capex budget.
Pengrowth’s dividend will now pay 1 cent per quarter, or 4 cents annually, compared to the 2 cents it pays currently.
“These are challenging times for the oil and gas industry and we have continued to make difficult decisions and take the necessary actions to strengthen the company’s balance sheet as commodity prices have declined,” Derek Evans, president and CEO of Pengrowth, said.
“It is crucial that we take these actions to position the Company for future growth once commodity prices recover to a more sustainable level. By reducing our dividend, we are providing additional financial flexibility to reduce our indebtedness, despite the sustained lower commodity price environment,” he added.
The company said it remains committed to taking actions to ensure it operates within its cash flow and is looking at all options to reduce its overall indebtedness.
“Today’s dividend reduction is consistent with all of the measures the company has taken in 2015 to counter the impact of falling prices and preserve its financial liquidity,” it said.
So far this year Pengrowth has reduced capital spending 78 per cent versus 2015, sold $600 million worth of non-core assets and reduced staff seven per cent.