A recent announcement by Husky Energy shows that the company plans to implement $800 million in spending cuts in 2016 with capital spending targeted. In addition the stock dividend for the company will be suspended, at least in part because of the low oil prices currently seen. In December the company announced a capital spending plan that included between $2.9 billion and $3.1 billion, and these numbers have been revised downward since then. The latest announcement shows that the company plans on capital spending that totals between $2.1 billion and $2.3 billion instead. The company is hoping that Western Canada drilling deferment and a schedule adjustment for offshore drilling rig mobilization will help save money and cut costs down to manageable levels. If oil prices continue to drop on the global market even these steps may not be enough and further cuts in spending may be announced as the year goes on.

Husky Energy CEO Asim Ghosh weighed in on the spending cuts in a recent energy update report from the company. Ghosh explained “We continue to take decisive action in this period of persistent supply-demand imbalance. Our fundamental goal remains unchanged – the steps we are taking will see Husky emerge from this cycle as a more resilient and more profitable company.” The goal is to make the transition into lower priced oil easier and less disruptive. Ghosh also stated that “Within the updated capital plan, the transition into a low sustaining capital business continues unabated. Deferral of capital is in those areas that can be quickly switched on as commodity prices recover.”