Cenovus Energy (TSE:CVE), Canada’s second largest independent oil producer, contending with lower oil prices, slashed its dividend by 40 percent and said it was accelerating its cost-cutting efforts, including cutting up to 400 jobs in its Calgary offices. Shares advanced.
The Calgary-based company said it will now pay a quarterly dividend of C$0.16 per share, down from its earlier rate of C$0.2662.
Cenovus also ended the 3 percent discount shareholders received if they participated in the company's dividend reinvestment plan.
The company has been slashing costs as it deals with the drop in oil prices. Cenovus said it expects to reduce expenses by about $280 million this year compared with its earlier target of $200 million.
"We've taken a number of decisive steps to help ensure financial resilience during a prolonged period of lower oil prices," chief executive officer Brian Ferguson said in the statement. "As a result of these initiatives and the operational progress the company has made, we are now in an even stronger position to remain cost competitive and potentially resume investing in high-return growth projects."
Cenovus, which cut about 800 positions earlier this year, has over 3000 employees, not including contractors.
The cuts come as Cenovus reported a second-quarter profit of C$126 million, or C$0.15 per share, down from C$615 million, or C$0.81 per share, a year ago.
Revenue, net of royalties, fell to C$3.73 billion, down from C$5.42 billion.
Shares added 1.8 percent to C$18.95 at 2:25 p.m. in Toronto, paring this year’s slump to 21 percent.