CALGARY – Enerplus Corp. is shutting down oil wells and again cutting its capital spending plans due to low crude prices linked to measures taken to control the COVID-19 pandemic.
In an announcement two days after benchmark U.S. oil futures prices fell into negative territory for the first time in history, Enerplus says it will cut another $25 million to take its 2020 capital budget to $300 million.
The reduction and a previous one announced in mid-March leaves it at about 55 per cent of its original budget of $545 million.
West Texas Intermediate oil prices strengthened Wednesday, rising by more than 20 per cent from a settlement price of US$10.01 per barrel on Tuesday. They are still down more than 75 per cent since Jan. 1.
Enerplus says it has begun to temporarily shut-in certain wells across the Williston basin in Montana and North Dakota, as well as in its Canadian operations.
It says it expects April production to be modestly impacted by shut-ins and will average about 88,000 barrels of oil equivalent per day. Deeper cuts to production are expected in May.
“The unprecedented impacts from the COVID-19 pandemic, as well as the excess global oil supply, poses significant challenges for our industry,” said CEO Ian Dundas in a statement.