Service & Supply | Oilfield Services | Capital Markets | Capital Expenditure

Savanna Energy Reduces Capital 29%

Share Print Bookmark    |    Friday,January 16,2015

In light of the significant uncertainty in respect of commodity pricing and activity levels for all of Savanna Energy Services Corp.'s services, Savanna has adopted a conservative capital spending program for 2015.

This is intended to protect Savanna's balance sheet and net asset value.

Accordingly, Savanna's previously announced 2015 capital program has been revised as follows:

 

These reductions represent a $30 million, or 29% reduction from the capital program previously announced. However, Savanna will continue to evaluate the 2015 capital program in light of further changes to anticipated activity levels as 2015 unfolds.

Additionally, Savanna's management and board have also reassessed the level of the Company's dividend in the context of unfolding market conditions. In this regard, until such time as Savanna's management and Board see a sustainable recovery in world crude oil prices and oilfield services activity, Savanna has determined to reduce the Company's dividend from $0.03 per share per month ($0.36 per share per year) to $0.03 per share per quarter ($0.12 per share per year). The Company has also determined to suspend its Dividend Reinvestment Plan with respect to dividends paid after January 15, 2015.

The first quarterly dividend of $0.03 per share will have a record date of March 31, 2015 and the payment date will be April 15, 2015. This dividend is an eligible dividend for Canadian income tax purposes. This adjustment will not impact the dividend declared on December 15, 2014 and payable to shareholders on January 15, 2015.

Savanna's December 31, 2014 consolidated total debt position, net of cash, was approximately $342 million Canadian Dollars. This total debt amount includes approximately $11 million of unrealized foreign exchange on US Dollar denominated debt as well as $13 million in gross partnership debt, of which Savanna's proportionate share is approximately 50%.