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Layoffs, Spending Cuts Permeate Alberta’s Oilpatch On Quarterly Results

February 14, 2015

Layoffs, Spending Cuts Permeate Alberta’s Oilpatch On Quarterly Results

CALGARY – There was a splattering of red ink in the oilpatch Thursday, as the steep drop in oil prices weighed on the bottom lines of some of the energy sector’s biggest names in the last three months of 2014.

Oilsands producer Cenovus Energy Inc. (TSX:CVE) said it’s cutting its headcount by 15 per cent, mostly contractors, amounting to 800 positions. Husky Energy Inc. (TSX:HSE) also said there’s been a “small” reduction in its workforce, but declined to get more specific. And Precision Drilling Corp. (TSX:PD) said there’s not enough work these days to keep its crews busy.

“I believe we are in for much greater volatility in oil prices for the foreseeable future and that’s why you’ve seen Cenovus preserve cash by moderating our growth and reducing our workforce,” Cenovus CEO Brian Ferguson said.

 

Crude prices have been at around the US$50 a barrel mark for much of this year so far, after having hit US$107 a barrel last summer. The drop intensified toward the end of 2014.

Cenovus posted a net loss of $472 million, widening from the previous year’s loss of $58 million.

The results for the quarter included a $497-million charge related to its Pelican Lake oil project in Alberta due to the drop in oil prices and a slowing of the development plan for the project.

Some expansion work at Cenovus’ flagship Foster Creek and Christina Lake oilsands projects is winding down, though phases that are further along in development are continuing as planned.

 

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