Slumping crude oil prices have hindered Alberta's economy.

Penn West cuts capex to $500 million

Canada

CALGARY, September 1, 2015 – Canadian oil and natural gas production company Penn West has been forced to lower its capital expenditure to $500 million in response to low crude prices, the company’s CEO said in a Tuesday press conference. Penn West is expected lay off 35 percent of its workforce, or about 400 jobs.

The job cuts will save the Alberta-based corporation a projected $45 million a year. Most of the jobs will be cut from its Calgary offices. A further $20 million will be saved by suspending dividend payments to non-management directors.

Alberta’s energy industry in particular has been hit hard by this year’s drop in crude prices. For the year, Penn West had expected capital expenditure of $840 million. Now, the company has limited itself $500 million, a 40.5-percent drop off, and a 13-percent drop from July’s tightened budget.

“We have made a number of exceptionally difficult decisions in order to remain competitive in the current commodity price environment,” Penn West CEO Dave Roberts said at a Tuesday press briefing. “We view the cost reductions as sustainable, and we will remain well positioned for the potential expansion of development activities and capital programs in the future.”

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