CALGARY, Alberta (Reuters) - Enerplus Corp (ERF.TO) said on Tuesday it will cut its monthly dividend by half as the Canadian oil and gas producer looks to cope with weak commodity prices.
Enerplus said it would chop the monthly payout to 9 Canadian cents from 18 Canadian cents beginning next month.
“We believe this reduction will strike a better balance between yield and growth, allowing continued investment into our asset base in a more sustainable manner,” the company said in a release.
Weakening oil prices and natural gas prices near decade lows are cutting into producer cash flows and lowering profits. However, Enerplus said it still intends to spend about C$800 million ($777 million) on drilling this year, with 40 percent of that going to the prolific Bakken shale-oil field in North Dakota as it looks to double production there this year.
Enerplus shares rose 35 Canadian cents to C$13.52 on the Toronto Stock Exchange on Tuesday. It announced the dividend cut after trading ended for the day.
($1 = $1.03 Canadian)
Reporting by Scott Haggett; Editing by Bernard Orr