February 15, 2011 / 1:27 PM / 7 years ago

UPDATE 2-NuVista says to stop dividend

* Sees 2011 average production volumes 26,000-27,000 boe/d

* Forecasts capital program of C$160-C$180 mln

* Forms executive committee to search for new CEO

(Rewrites lead; Adds details, share milestone)

Feb 15 (Reuters) - Canada’s NuVista Energy Ltd said it will not pay dividend and will use the cash to fund its drilling program, and forecast 2011 average production volume which came in below 2010 projections.

NuVista initiated a quarterly dividend of 5 Canadian cents per share on March 8, 2010.

The intermediate oil and natural gas company is engaged in exploration, development and production activities on properties located in the Western Canadian Sedimentary Basin (WCSB), which includes southwestern Manitoba, southern Saskatchewan, Alberta and northeastern British Columbia.

NuVista, formed through the reorganization of Bonavista Petroleum Ltd in July 2003, forecast 2011 average production volumes of 26,000-27,000 barrels of oil equivalent per day (boe/d), and said its board approved a capital program of C$160-C$180 million for the year.

For 2010, the board had approved a capital budget of C$240-C$280 million and said it expected production to average 30,000-31,000 boe/d.

NuVista said in 2011 it will continue to focus on evaluating oil and liquids-rich natural gas resource plays, in particular its Wapiti Montney resource play in Grande Prairie, Alberta.

About 20 percent of the capital program will be used for the development of the Montney rights, the company said.

NuVista, which also entered into a bought-deal agreement to raise C$33.3 million, forecast 2011 cash flow of C$160-C$180 million .

The company, whose Chief Executive Alex Verge resigned last November at the request of the board, said it has formed an executive committee to search for a president and CEO.

It, however, did not say when it would appoint the new CEO.

NuVista shares, which have lost nearly a third of their value in the last one year, were down 11 Canadian cents at C$9.68 on Tuesday on the Toronto Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anne Pallivathuckal and Joyjeet Das)

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