Western Energy (TSE:WRG) has suspended quarterly dividend payments after revealing a dramatic slump in revenues.
Fourth quarter operating plunged 69% to C$40.4mln from C$129.2mln the year before, largely as a result of a C$67.9mln decline in operating revenue from its contract drilling operations.
The company was hit by a double whammy of waning demand for its drilling rigs and slumping prices.
In terms of drilling rig usage, operating days in Canada decreased to 20% in the fourth quarter of 2015 as compared to 59% in the fourth quarter of 2014, reflecting a 65% decrease in operating days.
Adjusted underlying earnings (EBITDA) plummeted to C$7.57mln from C$50.42mln the year before. Adjusted EBITDA for the full year was C$60.55mln from C$176.7mln in 2014.
Given the current commodity price environment and limited visibility for oilfield service activity, the quarterly dividend has been suspended until further notice.
This reduction will allow Western to preserve its liquidity while providing the company with the financial flexibility to pursue further growth opportunities, Western Energy said.