Capital Markets | Capital Expenditure | Drilling Activity | Capex Decrease | Capital Expenditure - 2020
Highwood Oil Co. Updates 2020 Outlook; Lower Spending, Salary Cuts
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Highwood Oil Company Ltd. detailed revisions to its 2020 capital budget and an update to operations in 2020.
Cuts All Non-Essential Spending, Reduces Salaries
Highwood will cease all non-discretionary capital activity for the balance of 2020 until realized pricing in Western Canada rebounds from these historic lows. Highwood’s main goal in these times will be to protect its balance sheet.
Additionally, Highwood has begun a series of G&A reduction initiatives including a reduction of employee salaries and non-essential G&A expenditures to manage cashflows.
The details on the budget cuts or the salary reductions were not disclosed.
Highwood had previously planned to drill between 12 and 18 gross wells (6-9 net) in the Clearwater play over 2020. The Corporation successfully drilled 5 gross (2.5 net) wells in the Clearwater in January & February 2020 before the industry saw the drastic decline in market pricing.
Current Production
Current production from Highwood is approximately 250 bbl/d of oil proforma the previously announced Red Earth divestiture from February 18, 2020. Until price recoveries are seen, Highwood does not plan to bring additional production back online.
Highwood is currently hedged an average of 467 bbl/d for the duration 2020 at an average realized price of $66.89 CAD WTI.
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