Cenovus Energy to cut jobs, dividend amid oil price slump

Thu Jul 30, 2015 3:19pm EDT
 
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By Julie Gordon and Darshana Sankararaman

(Reuters) - Cenovus Energy Inc CVE.TO, Canada's No. 2 independent oil producer, on Thursday slashed its quarterly dividend by 40 percent and said it would cut 300 to 400 jobs to further reduce costs because of slumping crude prices.

The Calgary-based company said it now expects to prune its workforce of 4,600 by about 15 percent by the end of this year and cut more jobs in early 2016.

Cenovus also raised its cost reduction target for 2015 by 40 percent to C$280 million ($215 million) and reiterated plans to take a more disciplined approach to growth in light of low crude prices.

"I'm now of the opinion that we could well experience pretty low and volatile prices through 2017," Chief Executive Brian Ferguson told analysts on a conference call.

Ferguson added that if U.S. crude stays in the $50 to $55 per barrel range, the company would still be able to fund expansion of its Foster Creek and Christina Lake oil sand projects in northern Alberta.

Oil prices LCOc1 CLc1 have plunged roughly 55 percent in the past year, forcing many Canadian producers to cut jobs and slash costs.

Cenovus produces oil at Christina Lake and Foster Creek, both of which are joint ventures with ConocoPhillips (COP.N: Quote), and at other assets. It also has a 50 percent stake in two U.S. refineries.

The company said its focus for 2015 is on sustaining its existing output and completing expansion projects already under way.   Continued...

 
President and CEO Brian Ferguson of Cenovus Energy addresses shareholders during the company's annual general meeting in Calgary, Alberta, April 29, 2015. REUTERS/Todd Korol