lttlore spending cuts,layoffs in oilpfidfiSeveral firms shutting in productionin attempt to ride out plurrg" in price

GEOFFREY MORGAN

CALGARY Oil prices traded at atwo-month high on Thursday, butcompanies in Calgarycontinue toretrench, cutting jobs, shuttingin production and scaling bacfspendingplans.

West Texas Intermediate bench_markoil prices rose to an eight_week high of US$85.82 per barrelThursday, even as large energycompanies confirmed additionallayoffs resultingfrom the ongoingoil price rout.

_ Repsol Oil and Gas Canada Inc.,

the company formally knownas Talisman Energy, confirmedThursday that it would lay off lOper cent to t5 per cent of its stalfover the course of the week, butwould not give a specific number.

"In light of ongoing low globalenergyprices, we've spent signifi_cant time considering whai ourorganization needs to supportour_future activity levels,,, Repsolspokesperson Brent Andersoniaidinanemail.

On Wednesday, fracking com_pany Calfrac Wetl Services Ltd.announced that it has cut another5OO jobs from its NorthAmericanoperations, bringing its total num_b-er of layoffs in the region duringthis downturn to 2,30-O and leavling_Calfrac with l,2OO employeesin Canada and the U.S.

As part of those cuts, which havetrimmed the company,s NorthAmerican staf bytwo-thirds, Cal_frac also shuttered its MedicineHat office and laid otr200 peoplein the citywhere the companywasfounded.

- More than IOOOOO people havelost their jobs in the Canadianoilpatch over the course of thedownturn, which has pushed theprovince into a deep recession.

"The ongoing weakness in theprice for oil and natural gas has ledto unprecedented capital spend_rng reductions by explorations andproduction companies, particu_

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Webe spentsigniftcanttimeconsideringwhat our orga-nizationneedsto supportourfuture actiuitgleuels.

lowprices of both oil and naturalgas have led the companyto shut in4O million cubic feet ofdailynatu_ral gas production and I,OOO bar_rels of dailyoil production. To date,the companyhas avoided layoffs,preferringto impose salarycuts onemployees.

Arare bright spot in an otherwisebleak series ofoil andgas earnings

lepjlls, C._NRL managed to pullin $tgtmillion (12 cents a share)in earnings in the fourth quarterended Dec. Bl - when many of itsgomneltgpposted large quarterlytosses. Still theprofitfigurewas 8iper cent less than a year earlier,wjr.en t!9-gompanyposted earningsof $1.2 billion, or $1.09 per sharel

CNRL president Stevb Laut saidthe companywas continuingworkto reduce its cost structure _ rath_er than wait for commoditypricesto improve - in an effort io bringshut in production back on stream.

The companywas able to drive itscosts down significantly over thecourse of 2015 and now producesoil from its thermal oilsands proj_ects at an operating cost of $g.s-gper barrel.

larly in the North American mar_ket," Calfrac president and CEOFernando Aguilar said in a releaSe.

. Aguilaraddedthatcapital spend_rng reductions by its customershave reduced the demand for hiscompany's pressure pumping busi_ness,

On Thursday, Canadian NaturalResources Ltd., Canada,s largest oiland gas producer, said it plannedt-o spend 32 per cent less this yearthan last year, lowering its

""iitutbudget tobetween $3.5 biilionand$3.9 billion from $4.5 billion to $bbillion previously.

CNRL also said that persistently

Other operators have been forcedto shut in higher quantities of theirproduction.

B_aftex Energy Ltd. presidentand CEO James Bowzer said ina release that the Calgary_basedcompany is shutting in 7,SOO bar_rels per day of ..low or negativemar$n heavy oil production,, in Al_berta as a result ofthe fall in prices._ "Should netbacks improve, wehave the ability to restart thesewells in relatively short order atminimal cost," Bowzer said. The_company also reduced its capitatbudget for 2016 by 38 per cent to atarget between $225 million and

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$265 million.Financial Post

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