Canadian oil producers slash 2015 capital budgets

Wed Dec 17, 2014 1:16pm EST
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(Reuters) - Canadian oil producers Husky Energy Inc (HSE.TO: Quote) and Penn West Petroleum Ltd PWT.TO 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 (CVE.TO: Quote), MEG Energy Corp (MEG.TO: Quote), Athabasca Oil Corp ATH.TO and Tourmaline Oil Corp TOU.TO 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).   Continued...