(Corrects from C$800,000 to C$800 million in first paragraph)
By Nia Williams
CALGARY, Alberta, Jan 19 (Reuters) - Husky Energy HSE.TO
cut C$800 million ($549.07 million) from its 2016 capital budget
and slashed production guidance by 15,000 barrels of oil
equivalent per day on Tuesday in the latest sign that Canadian
producers are scrambling to cope with low oil prices.
The company also scrapped its fourth-quarter dividend, just
a few months after surprising investors by switching to a stock
dividend from cash payments.
Calgary-based Husky said it will spend between C$2.1-2.3
billion this year, down 27 percent from its original capital
budget, and produce between 315,000-345,000 boepd.
The company said savings would be achieved primarily through
deferring discretionary activities in Western Canada, but its
Sunrise oil sands plant and three new heavy oil thermal projects
in the Lloydminster region on the Alberta-Saskatchewan border
will not be affected.
Spokesman Mel Duvall said about half the reduced production
impact would be felt in Alberta and was mostly gas, with the
rest being spread across Husky's portfolio.
"Deferral of capital is in those areas that can be quickly
switched on as commodity prices recover," Husky's chief
executive, Asim Ghosh, said in a statement.
Husky, controlled by Hong Kong billionaire Li Ka-shing,
produces oil and natural gas in Canada and Southeast Asia, and
holds numerous exploration licenses offshore of Atlantic Canada.
The company said it had adjusted the schedule for deploying
an offshore drilling rig in the Atlantic region and was
deferring select drilling in Western Canada.
Despite the cut in production and spending forecasts, Husky
still plans to add 29,500 barrels per day through its heavy oil
thermal projects and the Sunrise oil sands plant, a joint
venture with BP Plc BP.L , which will ramp up to 60,000 barrels
per day by the end of 2016.
The company's overall earnings breakeven point is expected
to be below $40 U.S. crude by the end of 2016, and Husky said it
expected further gains through reduced operating and sustaining
costs.
($1 = 1.4575 Canadian dollars)
($1 = 1.4570 Canadian dollars)
(Editing by Jonathan Oatis)