Pengrowth Energy Corporation cuts monthly dividend by 50%

Pengrowth Energy Corporation (PGF.TO) (NYSE: PGH) will lower its monthly dividend payment from $0.04 to $0.02 per share.

Pengrowth will cut it's capital spending (CAPEX) by 74% from $770 million in 2014 to $200 million in 2015.

The 2015 capital budget was based on the assumption of a WTI crude oil price of US $50/bbl, an AECO natural gas price of Cdn $2.75/Mcf and an $0.85 USD/Cdn exchange rate.

In addition to the reduction in 2015 capital spending, Pengrowth's Board has approved an amended dividend policy reflecting a monthly payment of $0,02 per share starting with the March 16, 2015 payment. The previous dividend level was based on higher commodity prices and, given the current low commodity price environment and the uncertainty over how long it will persist, Pengrowth believes that it is prudent to lower the amount of its monthly dividend to ensure that it balances its 2015 cash inflows with capital obligations and dividends in today's commodity price environment.

The 2015 capital budget and revised dividend rate reflect a balance whereby capital expenditures and dividends are expected to be less than internally generated funds flow from operations, with any and all excess funds flow being directed toward reducing debt. There will be a strong emphasis in 2015 on reducing Pengrowth's indebtedness.

Source: Pengrowth Energy Corporation

Recent headlines