July 6, 2012 / 11:09 AM / in 6 years

Pengrowth Energy cuts monthly dividend

(Reuters) - Canadian oil and gas producer Pengrowth Energy Corp (PGF.TO) cut its monthly dividend by 43 percent to 4 Canadian cents on weak oil and gas prices, its first cut since November 2009.

West Texas Intermediate crude and Brent crude have both fallen about 25 percent since their February highs.

“The reduction of the dividend, in conjunction with the capital expenditure reduction and our ongoing hedging programs, should enhance our financial flexibility and provide us with ‘dry powder’,” Pengrowth CEO Derek Evans said in a statement.

Pengrowth had about C$1 billion in long-term debt as of March 31.

The company earlier this year said it plans to sell about 10 percent of non-core assets from the combined portfolio - Pengrowth and NAL Energy - in the next 12 months and use the proceeds to fund existing oil projects.

Pengrowth bought NAL Energy Corp for about C$1.30 billion ($1.30 billion) in stock in March.

The company said on Friday it is “encouraged by the early performance of the Lindbergh pilot.”

The Lindbergh property, which is 100 percent owned and operated by Pengrowth, had a best estimate contingent resources of 193.4 million barrels of bitumen.

Shares of the Calgary-based company closed at C$6.61 Thursday on the Toronto Stock Exchange.

Reporting by Thyagaraju Adinarayan; Editing by Sriraj Kalluvila

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