Canadian oil and gas firm Husky Energy has reduced its capital spending plans for 2016.
Citing the extended low oil price environment, Husky Energy said its capital plan would be cut down to $2.1-2.3 billion range. The previous range was $2.9-3.1 billion.
Savings will be achieved primarily through deferring discretionary activities in Western Canada, Husky Energy said.
“Within the updated capital plan, the transition into a low sustaining capital business continues unabated. Deferral of capital is in those areas that can be quickly switched on as commodity prices recover,” said CEO Asim Ghosh.
Break-even below $40
The company’s overall earnings break-even point is expected to be in the sub-$40s US WTI oil by the end of 2016, Husky said, adding that further gains are expected to be achieved through the ongoing reduction of operating and sustaining costs.
Furthermore, Husky Energy has reduced its production guidance, with production now expected to be in the range of 315,000-345,000 barrels of oil equivalent per day (boe/day), compared to the previous guidance of 330,000-360,000 boe/day.
“Our fundamental goal remains unchanged – the steps we are taking will see Husky emerge from this cycle as a more resilient and more profitable company,” Gosh said.