NAL Energy Corp. is cutting its dividend by nearly a third as the company deals with low natural gas prices and an uncertain economic outlook for 2012.
The Calgary energy producer said late Wednesday that it's reducing its monthly payment to shareholders to 5 cents a share from 7 cents – a drop of just under 29 per cent.
The cut is effective with the January dividend payable next month.
NAL's shares were halted on the TSX pending the news.
In a related development, the company said it plans to spend $200-million in capital projects this year and will drill about 62 net wells, with a focus on light oil and liquids.
"NAL's business plan for 2012 improves the sustainability of the corporation for the long term and preserves the balance sheet for acquisition opportunities that will create incremental value for our shareholders," the company said in its 2012 outlook.
NAL Energy acquires, develops, produces and sells oil, natural gas and gas liquids from properties in southeastern Saskatchewan, central Alberta, northeastern British Columbia and Lake Erie, Ont.
Other energy companies have also been scaling back capital spending plans in light of weak gas prices.
Earlier this week, Talisman Energy Inc. said it plans to spend 11 per cent less this year than it did in 2011 and is eyeing up to $2-billion in asset sales.
The Calgary-based company has set a 2012 capital budget of just over $4-billion, a decrease of $500-million from 2011.
Meanwhile, junior Crew Energy Inc. said Wednesday that it is cutting its capital budget for this year by 14 per cent to $300-million.