(MENAFN- ProactiveInvestors) Northern Blizzard Resources (TSE:NBZ) has reduced its capital program for next year by 40 percent in the light of the recent slide in oil prices but has managed to lower its production outlook only slightly as well as maintain its dividend program.
The western Canada-focused oil and natural gas producer has slashed its capital budget for 2015 to $130 million from $215 million previously which it says will maintain its financial strength while supporting estimated 2015 production of 23000 barrels of oil equivalent per day (boe/d) and a monthly dividend of 8 cents per share.
The midpoint of Northern's previous production forecast for next year was 25000 boe/d.
The company said its drilling program for 2015 will be cut back from 189 to 74 wells which accounts for the majority of the change in the capital program. It plans to spend less than $50 million in the first half of next year.
Northern Blizzard also reminded investors that it has a hedging program in place designed to reduce revenue volatility resulting from commodity prices. Approximately 55 percent of its oil production for the first half of 2015 is hedged at an average price of C$101 per barrel. Funds from operations including hedging are estimated to be $211 million in 2015.
The company has a $530 million credit facility of which about $470 million remains undrawn. The majority of its debt is also term debt of US$276 million which is due in 2022.
Crude is set for the biggest annual loss since 2008 amid the highest U.S. output in more than three decades and signs of slowing global demand growth. WTI for February delivery increased as much as $1.59 to $56.85 a barrel in electronic trading on the New York Mercantile Exchange after plunging over 3 percent in the previous session.
Northern Blizzard shares rose 5.6 percent to C$9.19 as of 10:30 am ET in Toronto on Tuesday paring year-to-date losses to 51.6 percent.
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