Calgary-based Ensign Energy Services Inc. is reducing its capital expenditure plans for this year as well as cutting back on salaries of executives, the company announced on Monday.
The company said it is making the moves along with other energy sector companies as they all face challenges “in these extraordinary times”.
“Oil demand losses due to the impact of COVID-19 virus combined with a market share and price war between Russia, Saudi Arabia and other global producers has pushed oil prices to levels not seen since early 2002,” it said.
Ensign is reducing its capital expenditure budget from the previously announced 2020 budget of $100 million to $60 million and will be comprised largely of maintenance capital items.
“Ensign has taken further steps to reduce our costs, by reducing the salaries of the Company’s named executive officers by 40 per cent for the Chairman, 20 per cent for the President and Chief Operating Officer and 12.5 per cent for the other named executive officers, all effective April 1, 2020,” it said in a news release.
“In addition, the Board of Directors’ compensation has been reduced, also effective April 1, 2020, by 20 per cent for cash retainers and 40 per cent for equity compensation. Such reductions reflect the Company’s belief in the importance of cost control in light of the current oilfield services industry outlook. These steps were taken notwithstanding, Ensign’s low general and administrative costs relative to industry benchmarks. It goes without saying the Company will continue to monitor the environment to determine what if any additional steps should be taken to mitigate the negative impacts of the challenges mentioned above.”
