CALGARY – Shares in Peyto Exploration and Development Corp. fell by as much as 15 per cent after it said it would cut its dividend and capital spending due to low natural gas prices in Western Canada.
In early trading on the Toronto Stock Exchange on Thursday, the Calgary-based company’s shares fell to a low of $6.91 from their Wednesday close of $7.93.
Peyto, which says it is the fifth largest natural gas producer in Canada, says it is temporarily cutting its monthly dividend to two cents from six cents per share.
It also says it will reduce the 2019 capital budget it announced in November by $100 million, from a mid-point of $275 million to $175 million, resulting in fewer wells being drilled on its western Alberta lands.
Peyto says it plans to ramp up annual spending again in 2020 and 2021 to between $270 million and $320 million, predicting that planned natural gas pipeline expansions by TransCanada Corp. will improve market access and allow a recovery in local prices.
Last week, Saskatchewan-focused Crescent Point Energy Corp. cut its dividend by nearly 90 per cent and announced a program of share buybacks. It also cut its capital budget for the year by about $500 million to about $1.25 billion in reaction to global oil price volatility.