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Progress Energy Resources cuts capital spending by $100M; cites low gas prices
CALGARY - Progress Energy Resources Corp. (TSX:PRQ), citing continuing low prices for natural gas in North America, is reducing its planned 2012 capital program by $100 million to $365 million.
Calgary-based Progress said Tuesday that it will also take steps to shut-in approximately 10 per cent of total natural gas production by April as it takes steps to "prudently manage its assets and balance sheet" in light of the current price environment.
Meanwhile, the company said it has grown its proved plus probable reserve base by 28 per cent to more than 323 million barrels of oil equivalent or 1.9 trillion cubic feet equivalent. The North Montney play in British Columbia now accounts for 58 per cent of those reserves.
"The reserve growth on our British Columbia North Montney lands provides further evidence of the scope and scale of the North Montney as it continues to distinguish itself as a world class resource play," president and CEO Michael Culbert said in a release.
"The decision to slow down capital expenditures and shut-in production was prompted by the abnormally warm winter in North America and the resulting supply and demand imbalance," Culbert added.
Under the new budget, approximately $330 million will be invested in the North Montney program, including $280 million on its proprietary program and $50 million on the North Montney joint venture properties.
The company will also invest $35 million in the Deep Basin, targeting the company's Dunvegan light oil play. Based on the adjusted capital program for 2012, Progress expects to exit the year at approximately 53,000 to 55,000 boe per day.
Progress said it will release its fourth-quarter and year-end 2011 financial and operating results after market close on March 1.
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