(MENAFN- ProactiveInvestors) () is reducing its 2015 capital budget by about half while slashing its monthly dividend to 1 cent per unit from 2 cents beginning in January.
Shares were up over 20 percent to 71 Canadian cents as of 10:45am ET in Toronto on Thursday.
The company said that current and future oil prices have fallen significantly since providing its preliminary budget for 2015 and has decided to reduce its capital program to US$20 million from US$39.5 million previously.
This will also impact forecasted annual production which is currently estimated at 6000 barrels of oil equivalent per day (boe/d) down from the prior outlook of 6500 boe/d.
Planned capital expenses along the Gulf Coast will be postponed in favour of capital opportunities in the Parkman and Turner formations in the Powder River Basin of Wyoming Argent said which provide a "good rate of return" even at the current weak oil price.
The new budget is based on a 2015 oil price forecast for WTI of US$67 per barrel it said and does not include any benefits from potential cost reductions. WTI crude is currently trading at US$55.60 a barrel in New York.
The company also plans to decrease its monthly distribution to 1 cent per unit beginning in January payable on February 23 from 2 cents previously. This would represent a total cash outlay of $7 million in 2015 down from $14 million.
"The two measures will allow for the trust to manage through the challenging market conditions and maintain financial flexibility using its US$140 million credit facility while it continues with its strategic alternatives process" Argent said.
The Calgary Alberta-based trust joins a host of other Canadian oil producers who have pared back capital-spending plans for next year amid tumbling oil prices.
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