CORRECTED-Canadian Oil Sands shares plummet after dividend cut

Thu Dec 4, 2014 11:11am EST
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(Changes company name in final paragraph to Canadian Oil Sands from Canadian Natural)

CALGARY, Alberta Dec 4 (Reuters) - Canadian Oil Sands Ltd shares fell 16 percent on Thursday after the largest owner of the Syncrude Canada Ltd oil sands project said it would cut its quarterly dividend by 43 percent to avoid boosting debt while crude prices are low.

The company said late on Wednesday it would cut its payout to 20 Canadian cents per share from 35 Canadian cents.

Canadian Oil Sands in a statement termed the move "a prudent step to preserve balance sheet strength and provide flexibility in this lower oil price environment."

Along with the dividend cut, the company lowered its capital budget for 2015 to C$564 million ($495 million), down by nearly half from the C$1.1 billion it expected to spend in 2014, as it wraps up a series of major projects at the 350,000-barrel-per-day oil sands project in northern Alberta and copes with crude prices that have dropped more than a third since June.

Canadian Oil Sands shares were down C$2.02 at C$11.11 in early trading on the Toronto Stock Exchange.

(1 US dollar = 1.1383 Canadian dollar) (Reporting by Scott Haggett; Editing by Lisa Von Ahn)