Pengrowth Energy Corp. has slashed its 2016 budget by 70 per cent and scrapped its quarterly dividend, becoming the latest company to chop spending to cope with the deepening crude slump.

Calgary-based Pengrowth said Thursday it would spend $60-million to $70-million this year, down sharply from an original budget of $200-million last year. The company also suspended its dividend effective in the first quarter and said no new drilling was planned this year.

It cut its output target for the year to between 59,000 and 61,000 barrels of oil equivalent per day from production of roughly 71,400 in 2015, and said it would slow the pace of development at its Lindbergh bitumen project.

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Pengrowth joins a growing list of companies in the oil patch that have announced fresh cuts to spending and dividends as U.S. crude prices hover around $30 (U.S.) a barrel.

Whitecap Resources Inc. and Husky Energy Inc. have also announced slimmer budgets and reduced or halted payouts to weather a free fall in energy prices that shows few signs of easing.

The Bank of Canada said this week it expects overall spending in the energy sector to fall by an average of 25 per cent this year, after declining by 40 per cent in 2015.

Pengrowth had earlier cut its dividend to a penny (Canadian) per share, meaning the company will save a nominal $25-million per year by eliminating the payment, according to Raymond James Ltd. analyst Chris Cox.

"However, these are luxuries that Pengrowth – and most other producers – can't afford in the current environment," he said in a note to clients.

The company faces headwinds from looming maturities on a portion of its approximately $1.9-billion in net debt, the Raymond James analyst added. Pengrowth said it intends to use proceeds from asset sales to pay down debt, with more than half of a $600-million disposition target expected to be met by the end of the first quarter.

However, the company is trying to offload assets in a sluggish market, potentially delaying sales. As well, its financial hedges are poised to unwind, adding to financial strains.

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"This makes the $600-million of targeted assets sales crucially important to provide visibility on managing these financial pressures," Mr. Cox said.