CALGARY – Baytex Energy Corp. (TSX:BTE) is cutting its monthly dividend by more than half and cutting its 2015 spending plans by 30 per cent from original tentative plans as a result of the drop in the price of crude oil, now trading near five-year lows.
The Calgary-based company’s dividend will drop to 10 cents per month with its Jan. 15 payment from 24 cents and its 2015 capital budget will be in a range of between $575 million and $650 million.
Baytex is aiming to produce the equivalent of between 88,000 and 92,000 barrels per day next year. In the third quarter, it produced about 94,000 barrels per day — a 41 per cent increase from the previous quarter.
It had previously said in October that it expected its 2014 exploration and development spending would be between $765 million at $790 million. It said at the time that it hadn’t finalized its plans for 2015.
“Given the recent collapse in world oil prices, we believe our 2015 budget strikes the right balance between preserving our operational momentum in delivering organic production growth and managing our dividends prudently to maintain strong levels of financial liquidity,” James Bowzer, the company’s president and CEO, said in a statement issued late Monday.
Baytex follows Precision Drilling Corp. (TSX:PD), Vermilion Energy Inc. (TSX:VET) and Trilogy Energy Corp. (TSX:TET) in announcing reduced capital budgets for next year, as a result of the major drop in oil prices.
In addition, Trilogy said it will halt its dividend “given the current market environment.”
Trilogy said it plans to spend $250 million next year, down from the $430 million 2014 estimate it provided in November. Its 3.5 cent monthly dividend will be stopped after the Dec. 15 payment