On Friday, Athabasca Oil announced it will cut its $30 million 2020 capital program and curtail heavy oil production at its Hangingstone oil sands facility.
The Calgary-based company says it has immediately cancelled its forecast capital expenditures, which represents a 25 per cent reduction from the previously announced 2020 budget. Athabasca says the revised $95 million budget primarily includes the completion of the winter program.
Prior to the decision, Athabasca says it already had a minimal capital program in place with market uncertainty and has low capital requirements to sustain its liquids weighted production base.
To date, the company has completed the tie-in of 10 Placid Montney wells and intends to bring production on-stream in the second quarter of 2020. The Kaybob Duvernay program is nearing completion with 16 wells expected to be placed on-stream in the first half of this year.
Athabasca says it’s working interest remains protected by the capital carry through the first quarter of this year with no activity planned for the balance of the year.
In Thermal Oil, the company has temporarily deferred long lead projects for Leismer. At its Hangingstone project, Athabasca says it has self-curtailed production by approximately 50 per cent to maximize corporate funds flow and liquidity and is making plans to defer the Hangingstone turnaround to 2021.
Athabasca expects 2020 annual production of 32,500 – 34,000 boe/d, which reflects a self-curtailment at Hangingstone for the balance of the year.
As a result of the decision, Athabasca Oil says it has released all non-essential contract staff effective immediately and is also taking further actions to optimize operating costs in the near-term.