CALGARY, Alberta, Dec 4 (Reuters) - Canadian oil sands producer MEG Energy Corp slashed its 2014 capital spending budget by a third on Thursday, and said it will keep 2015 expenditure at that level to “adapt to current market conditions.”
In a statement released after the market close, MEG said it expected to invest about $1.2 billion in 2014, down from its original budget of $1.8 billion.
The company, which has operations mainly in the southern Athabasca oil sands region of Alberta, also plans capital investment of $1.2 billion in 2015.
It has set a production target of 78,000 to 82,000 barrels per day (bpd) next year, 19 percent higher than the 2014 guidance.
“Our 2015 capital program is illustrative of MEG’s ability to adapt to the current market conditions, while still delivering meaningful growth,” said Chief Executive Officer Bill McCaffrey.
“With only twenty per cent of our budget required to maintain our current level of production, we have significant flexibility within our plans should we need to further respond to the market environment.”
Oil prices are down more than a third since June, putting pressure on Canadian oil sands producers to rein in spending.
On Wednesday, Canadian Oil Sands Ltd, the largest owner of the Syncrude Canada Ltd oil sands project, said it would cut its quarterly dividend 43 percent to avoid boosting debt while crude prices are low. (Reporting by Nia Williams. Editing by Andre Grenon)