Penn West Petroleum Ltd. has announced that they will be suspending their dividends and reduce 35 percent of the company's workforce due to the current environment of prices in commodities, according to a press release issued by Penn West.
The company also said that they plan to reduce the compensation of their board.
Penn West said in the press release that the board of directors has decided to suspend the company's dividends indefinitely after the scheduled October 15, 2015 payments of the most recently declared dividend.
The move is expected to reduce the company's annual cash outlays by about $20 million.
Penn West added in the press release that the $0.01 per share dividend will be paid to shareholders of record at the close of business on September 30, 2015.
The dividend is suspended indefinitely.
Penn West also said in the press release that they plan to reduce 35 percent of their current workforce, which represents about 400 full-time and contractual employees.
Most of the employees to be cut are located at the company's head office in Calgary.
The company said in the press release that the expected savings from the cost reduction is about $45 million per year.
Most of the reductions to the company's workforce will be effective immediately.
Dave Roberts, president and CEO of Penn West, said in the press release that the company has made "exceptionally difficult decisions" to maintain its competitiveness.
"We view the cost reductions as sustainable and we will remain well positioned for the potential expansion of development activities and capital programs in the future," he said.
Penn West also said in the press release that its board of directors has voluntarily decreased their annual retainers payable to non-management directors.
The annual retainers of the chairman of the board will be reduced by 50 percent while the annual retainers of non-management directors will be reduced by 40 percent.
The Wall Street Journal reported that the company has already been taking a number of actions to reduce its spending as oil prices continue to fall.
The company has been cutting operating costs and selling off its noncore assets.
The Wall Street Journal added that Penn West has also been farming out some of its commitments in a bid to reduce costs.
