OTTAWA (dpa-AFX) - ARC Resources Ltd. (ARX.TO) said Friday that its board of directors has approved actions to reduce the company's 2020 capital budget and dividend.
The company's 2020 capital budget is reduced from $500 million to no more than $300 million, while the monthly dividend is reduced from $0.05 per share to $0.02 per share.
ARC Resources said that after the payment of the March dividend, it intends to change to a quarterly dividend of $0.06 per share compared to its previous monthly dividend of $0.05 per share.
'The rapid decline in global commodity prices has created a significant headwind for energy producers, and we feel it is prudent to adjust our spending levels in order to protect our balance sheet and to ensure the sustainability of our business based on our current understanding of existing business conditions,' said Terry Anderson, ARC's Chief Executive Officer.
ARC Resources expects its average daily production for 2020 to be in the range of 150,000 to 155,000 barrels of oil equivalent per day, with the Dawson Phase IV gas processing and liquids-handling facility substantially complete and on schedule to be brought on-stream in the second quarter of 2020.
The majority of the capital spending that is being deferred in 2020 relates to drilling and completions activities in the greater Dawson and Ante Creek areas.
While the reduced capital program does reduce 2020 production guidance modestly, the deferred drilling and completions activities are expected to have a larger impact on 2021 production levels.
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