Inter Pipeline Ltd - President and CEO, Christian Bayle
President and CEO, Christian Bayle
Source: Sherwood Park News
Market Herald logo

Subscribe

Be the first with the news that moves the market
  • Due to a difficult oil and gas market, Inter Pipeline Ltd (TSX:IPL) is reducing its dividend by 72 per cent, from C$0.1425 per share to four cents.
  • The company is also suspending its premium dividend and reinvestment plan 
  • Furthermore, Inter Pipeline is suspending its European liquid storage sales activities because of ongoing travel bans and government mandated self-isolation measures
  • However, the company is continuing its construction of the Heartland Petrochemical Complex and is negotiating with potential investors in the project
  • Inter Pipeline Ltd (IPL) is down 8.75 per cent, with shares trading at $7.73 and a market cap of $3.3 billion

Inter Pipeline Ltd (TSX:IPL) is aggressively cutting costs to adjust for a difficult environment for the oil and gas industry.

Most notably, the company is slashing its dividend by 72 per cent, from C$0.1425 per share to just four cents. Inter Pipeline is also suspending its premium dividend and dividend reinvestment plan, until further notice.

The company has been forced to do this after the COVID-19 pandemic and the recent oil-price crash flung the industry into unforeseen challenges.

Christian Bayle, Inter Pipeline’s President and CEO assured shareholders that these concerns are macro-economic, rather than specific to the company.

“It is important to be clear that the decision of the board of directors to reset the dividend in no way reflects a lack of confidence in our core businesses. However, we are currently in a unique and very challenging business environment.

“The reduction in the dividend results in annualized cash savings of approximately $525 million, which positions us to self-fund,” he said.

Christian went on to say that these proceeds will be used to construct the company’s Heartland Petrochemical Complex. Construction at the site has not been interrupted by the COVID-19 crisis, thus far.

In related news, the company is considering bringing a third-party investor into the Heartland project.

Inter Pipeline initially planned to keep the investor negotiations private but has chosen to reveal this information early to abate concerns surrounding the project.

As a further cost-cutting measure, Inter Pipeline is suspending its European liquid storage sales activities. Due to ongoing travel bans and government mandated self-isolation measures, the company feels that this intercontinental project isn’t suited to the current global environment.

The company provided no re-start date for the liquid storage program but did state it would consider it at a later time.

Inter Pipeline Ltd (IPL) is down 8.75 per cent, with shares trading for $7.73 at 1:12pm EST. 

More From The Market Herald

" International Petroleum Corporation (TSX:IPCO) announces results of share repurchase program

International Petroleum (IPCO) has repurchased 126,198 common shares from November 1 to 11, 2022.

" Bonterra (TSX:BNE) closes $205M credit facilities

Bonterra Energy Corp. (BNE) has completed restructuring its debt capitalization by closing two new credit facilities worth $205 million.

" Petrolympic Ltd. (TSXV:PCQ) closes private placement financing

Petrolympic (PCQ) has completed a non-brokered private placement for gross proceeds of $646,998.

" Coelacanth Energy (TSXV:CEI) announces Q3 2022 financial and operating results

Coelacanth Energy (CEI) has released its latest financial and operating results.