Argent Energy Trust (TSE:AET.UN), an open-ended mutual fund trust, said it will be suspending monthly distributions starting April and reducing 2015 capital expenditures while reporting a larger loss and lower production in the fourth quarter.
Losses ballooned to C$132.0 million, or C$2.08 per unit, in the October-to-December quarter, from losses of C$82.1 million, or C$1.38 per unit, in the year-earlier period, the Calgary, Alberta-based company said in a statement today.
The company attributed the loss mainly to an impairment charge of C$159.5 million, recorded in the Trust's oil & gas properties from lower oil and gas prices, as compared to the impairment charge of C$69.3 million in the year-earlier period.
Excluding the impairment charge, the reported income would have been C$27.5 million, or C$0.43 per unit.
Oil and gas revenue decreased 19 percent to C$35.9 million in the fourth quarter, from the C$44.1 million in the year-earlier period, mainly due to lower oil and gas prices during the quarter.
Cash flow, a key measure of the company's ability to pay for new projects and drilling, decreased to C$14.8 million, or C$0.23 per unit, from C$18.9 million, or C$0.32 per unit.
Sales volume was 6,528 boe/d in the October-to-December quarter, a decrease of 3 percent from 6,747 a year earlier. The company ascribed the volume decrease primarily to the natural decline of Eagle Ford and South Escobas wells and the cessation of capital spending on drilling in the second half of 2014.
Netbacks from sales volumes for the fourth quarter were C$13.4 million, or C$22.23 per boe, as compared to C$22.2 million, or C$35.77 per boe, a year earlier.
Capital expenditures decreased to C$3.3 million in the fourth quarter, from C$16.7 million year-over-year.
In order to preserve cash and maintain compliance and liquidity in the low commodity price environment, the Trust said it will be suspending all monthly distributions to unit-holders, starting from April 2015.
It said it is reducing its capital expenditure budget for 2015 to $12. The 2015 capital budget is based on a 2015 oil price forecast for WTI of $50 per barrel.
The trust said it will also be undertaking a further reduction of its ongoing overhead costs, both in Calgary and Houston.
Shares of Argent closed up 3.7 percent at C$0.43 in Toronto yesterday, leaving the company with a market value of C$27.2 million. The stock has plummeted 91 percent over the past year.