Encana Corp. will slash $75 million in capital spending in its Montney gas play and cut 20 per cent of its total workforce as it struggles to cope with low oil and gas prices.
The company recorded a net loss of $5.2 billion last year, according to fourth-quarter 2015 results released Feb. 24, and plans to cut 20 per cent of its workforce amid reduced capital spending.
The company expects to run an average of two rigs in the Montney over the course of the year, down from what was previously planned.
"Encana’s capital investment in the Montney is now at approximately $100 million for the year. This is down from $175 million in our previous 2016 guidance," company spokesperson Doug McIntyre said in an email.
The Cutbank Ridge partnership, a joint venture between Encana and Mitsubishi Corp., will account for another $150 million in spending this year. That partnership is tied to LNG Canada, a Shell-backed liquefied natural gas export project proposed on the B.C. coast.
The company would not say how many staff in the Peace Region might be cut.
"We’re not in a position to offer more detail in terms of regional breakdowns on our planned staffing reduction," McIntyre wrote. "Our decision to reduce 2016 capital has reduced our expected 2016 activity and as a result, we expect to reduce our workforce by around 20 per cent."
Encana has aimed 95 per cent of capital investment at four plays: the Montney, the Permian and Eagle Ford in Texas and the Duvernay in Alberta.
In B.C., the company is focused on proving resources for LNG Canada, as well as shipping gas reserves east, officials told the Peace River Regional District late last year.
The company blamed its 2015 losses on low commodity prices, foreign exchange losses and $4.1 billion in after-tax non-cash ceiling test impairments.
Encana cut around $130 million in Montney spending early last year after disappointing fourth-quarter 2014 earnings.
The firm is the second largest oil and gas company in B.C., behind Progress Energy.