Canada’s Peyto Exploration Trims Spending, Cuts Dividend

Canadian Deep Basin producer Peyto Exploration & Development said April 15 it would will trim 2020 capital spending by about C$50mn (US$35.4mn) and cut its dividend by a third.

In response to Covid-19 impacts and near-term volatility in oil and gas markets, the company will reduce its spending this year by a fifth, to C$200-C$250mn from C$250-C$300mn.

“Peyto will ensure it stays nimble with the ability to adjust the capital program either up or down in response to commodity prices and the global economic environment while attempting to match the capital program to funds from operations,” the company said. “To that end, the company continues to maintain a strong line-up of drill-ready locations.”

Beginning with the April 2020 dividend, Peyto will reduce its dividend to C$0.02/month to C$0.01/quarter, with the first quarterly dividend to be paid to shareholders of record as at June 30, 2020.

“These changes to Peyto’s 2020 plans are necessary to preserve Peyto’s balance sheet during this period of reduced liquidity for the industry,” the company said.