Producers unveil 2019 budgets

CALGARY — Oilsands producers Cenovus Energy Inc. and Athabasca Oil Corp. have announced capital budgets that restrict spending to what’s required to almost maintain current production levels in 2019.

Cenovus said it will spend between $1.2 billion and $1.4 billion next year, down about four per cent from this year’s budget, with a target of a two per cent decline in overall production to between 472,000 and 500,000 barrels of oil equivalent per day in 2019.

The reduction will result mainly from a 17 per cent slide in its non-oilsands Deep Basin oil and gas production to between 95,000 and 105,000 boe/d.

Oilsands output is expected to grow by three per cent.

Smaller Athabasca, meanwhile, plans to spend between $95 million and $110 million in 2019, down from about $190 million this year, and production will slip to a midpoint of about 38,750 boe/d from 40,000 boe/d.

It also announced it will reduce the number of Calgary head office staff by 25 per cent and cut its executive and director salaries by 10 per cent to save money.

“While we are encouraged by the recent short-term steps taken by the Alberta government, significant damage has already been done to both the Canadian economy and investor confidence,” said Athabasca CEO Rob Broen in a statement.

“The sector is still a long ways away from permanent solutions. Our governments, both federally and provincially, need to prioritize long-term projects to ensure access to new end markets and to maximize value for Canada.”

Both companies said their annual guidance does not reflect the Alberta plan to impose 325,000 barrels per day of production constraints on bigger industry participants starting Jan. 1.

It’s not yet known how long the cuts designed to drain a glut of oil will be in place.