CALGARY, Alberta, Sept. 1 (UPI) -- Canadian oil and gas producer Penn West Petroleum said it would cut more than 400 jobs, or around 35 percent of its workforce, to endure a weak oil market.
The company said it was cutting capital spending, suspending dividends and "significantly" cutting costs through a 35 percent workforce reduction.
President and Chief Executive Officer Dave Roberts said steps taken today will help the company endure an era of historically low crude oil prices.
"Limiting our capital programs to the funds flow generated from our assets and suspending our dividend are necessary steps," he said in a statement. "We remain flexible and well positioned to move forward when oil prices improve."
The company said it expects to save about $34 million per year through the workforce reductions, which Roberts said was one of the "exceptionally difficult" decisions made to shield Penn West from market impacts.
The company's move mirrors developments from peer companies across the international energy sector. Spending cuts have also resulted in lowered forecasts for net production. Penn West said it was lowering its forecast for the year by around 7 percent to between 86,000 and 90,000 barrels of oil equivalent per day.
Canada's National Energy Board last week reported exports of lighter conventional crude oil down 25 percent from January to 772,000 barrels per day in June. Compared with June 2014, total light crude oil exports are down 10 percent.
For the heavier oil sands, however, NEB data show a 6 percent increase from January to 2.2 million bpd in June and up 13.5 percent year-on-year.
Much of the Canadian oil sector is focused in Alberta, where the provincial government said it was expecting a record $4.5 million deficit.
"Forecasts indicate our economy will recover in 2016," provincial Finance Minister Joe Ceci said in a statement. "In the meantime, Albertans can trust that we will continue to be fiscally responsible while investing in their priorities."