- International Petroleum Corporation (TSX:IPCO) will cut its 2020 expenditure plan by between C$177 million and $270 million
- The company cited “extraordinary developments” and critically low oil prices as the reasons behind the decision
- IPC says that it will be able to fund the revised plan with its existing cash flows and borrowing capacity
- Expenditures that have been cut from the original plan will either be deferred or cancelled entirely
- International Petroleum Corporation (IPCO) is currently up 14.38 per cent to $1.83 per share
International Petroleum Corporation (TSX:IPCO) plans to cut its 2020 expenditure budget by between C$177 million and $270 million.
The company, which owns a portfolio of oil and gas assets across Canada, Malaysia and France, cited a volatile market and critically low oil prices as the driving forces behind the cutbacks.
The expenditures that have been excluded in the revised plan will either be deferred until a healthier market arises or cancelled entirely.
Mike Nicholson, International Petroleum’s CEO, commented on the new budget.
“Following the extraordinary developments in the world since we released our 2020 budget and production guidance IPC is taking decisive action to reset our 2020 expenditure plans in order to maximise the financial flexibility of the corporation,” he said.
IPC says that it has also accounted for temporary production curtailments in oil fields that are not expected to generate positive cash flows at low commodity prices.
Oil production for 2020 has been revised to between 30,000 and 45,000 barrels of equivalent oil per day, depending on how commodity prices evolve over the remainder of the year.
This is down from 46,000 to 50,000 barrels per day, which was previously announced on February 11.
However, the company’s gas production facilities in Canada are expected to be a saving grace.
IPC says that the revised budget can be comfortably funded with its current cash flows and borrowing capacity.
According to today’s announcement, the company has approximately $127 million remaining on its credit facility.
“The corporation will continue to monitor the commodity price outlook, as well as the restrictions and potential disruptions relating to the COVID-19 outbreak, and IPC has the ability to make further adjustments to these forecasts as needed,” Nicholson concluded.
International Petroleum Corporation (IPCO) is currently up 14.38 per cent to $1.83 per share at 2:14pm EST.