CALGARY – Energy fund managers told their clients to take heartburn medication and oil CEOs braced for impact but, in the end, no one was spared from the unprecedented collapse in energy markets this week.
“I don’t feel we were particularly spared,” said Ian Dundas, president and CEO of Enerplus Corp., who saw his company’s share price fall 37 per cent on Monday — a brutal day for the light oil and gas player, but relatively better than some of his competitors, who saw their share prices fall 50 to 70 per cent.
Now, Dundas and his peers are completely reworking capital budgets for the year, reconsidering spending plans and trying to cut costs after oil prices collapsed on news Saudi Arabia would flood the market with oil in its price war with Russia.
“We, like everybody else I know, are re-examining our spending plans with a downward bias,” Dundas said Tuesday, adding the company was moving swiftly on its spending review. “I think moving slowly in this is not a good plan.”
On Tuesday, Saudi Arabia announced it planned to produce 12.5 million barrels of oil per day next month, up from 9.7 million bpd in March, while it also cut prices for its crude to undercut Russia. In response, Russian Energy Minister Alexander Novak said Tuesday his country could increase its oil output by 500,000 bpd.
Caught in the crossfire are Canadian and U.S. oil producers, who are already reviewing their spending plans.
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See Also:
(1) More production but fewer jobs in future of Alberta oilsands: report
(2) ‘It’s a survival game right now’ as Canadian energy firms slash spending
