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Companies continue cuts in the oilpatch amid low oil prices in wake of pandemic

Oil prices plunged from demand drop
Crescent Point Energy Corp. further reduced its capital spending plan, as well as its production, in an April 20, 2020 story. (Photo by THE CANADIAN PRESS)

CALGARY — Crescent Point Energy Corp. cut its capital spending plan again and reduced its production guidance for the year as cuts in the oil patch continued amid lower oil prices in the wake of the pandemic.

The company lowered its capital spending guidance to between $650 million and $700 million compared with between $700 million and $800 million which it announced in March.

Crescent Point originally had a capital spending plan in a range of $1.1 billion to $1.2 billion.

The spending cuts came as the company also lowered its annual average production forecast to 110,000 to 114,000 barrels of oil equivalent per day for 2020.

It says the new guidance represents a reduction of 20,000 barrels of oil equivalent per day or about 15 per cent from its earlier guidance of 130,000 to 134,000 barrels of oil equivalent per day.

Crescent Point says the revision is largely due to the shut-in of higher cost production and its decision to shift capital spending to the latter part of the year.

Oil prices have plunged due to the drop in demand due the outbreak of COVID-19, even with an agreement by OPEC and other producers to cut output starting in May.

Cathedral Energy Services Ltd. and McCoy Global Inc. also both announced job cuts, reductions to executive pay and lower capital spending plans on Monday.

Cathedral says it has cut its office and shop staff by 22 per cent, while the remaining Canadian non-field staff has moved to a four-day work week with a corresponding 20 per cent reduction in salary.

The company also cut its CEO and executive vice-president salaries by 25 per cent, while board retainer fees have been reduced by the same amount.

McCoy announced an unspecified reduction in its headcount as well as salary and wage cuts across all levels of the organization including board and president and CEO cuts of 25 per cent and 20 per cent for other executives.

This report by The Canadian Press was first published April 20, 2020.