Jan. 10 (Bloomberg) -- Bonavista Energy Corp. rose after the Canadian oil and natural gas producer almost halved its dividend to cope with lower gas prices.
The shares rose 1.8 percent to C$14.33 at the close in Toronto. Earlier they fell to C$13.02, the lowest intraday since Mar. 11, 2009.
Bonavista will reduce the monthly dividend to 7 Canadian cents (7 cents) a share from 12 Canadian cents, beginning with the payment due February 15, the Calgary-based company said in a statement yesterday after the close of trading.
Bonavista, like other Canadian producers, has suffered from falling gas prices and discounted Canadian crude. The company will focus on investment to expand operations and plans to provide shareholders with a “sustainable balance” between growth and dividends, according to the statement.
“Despite encouraging signs of recovery in the fall of 2012, North American natural gas fundamentals have deteriorated significantly since that point,” the company said in the statement.
The dividend cut may offer only a “short-term reprieve,” Matt Donohue, a Calgary-based analyst at UBS said in a note to investors today.
“Payouts under our numbers remain higher then we would like through 2013,” said Donohue, who rates the shares a buy.
Bonavista operates in the western Canadian provinces of British Columbia, Alberta and Saskatchewan. Current production is about 61 percent natural gas, according to the company’s website.
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