https://www.mylloydminsternow.com/3...spending-by-700-million-as-oil-prices-plunge/ Husky Energy is cutting it’s capital spending by another $700 million in response to the current market conditions. The company plans to reduce production and refinery throughput until the supply and demand stabilizes. It also plans to reduce discretionary capital spending in an effort to improve liquidity. “As the market rebalances supply with demand over a very short period in North America, negative cash margins before operating costs are occurring. Reducing production minimizes our negative cash margin exposure,” says CEO Rob Peabody. Husky Energy expects to spend between $1.6 to $1.8 billion for the year which is about half of their early estimates. The company also says it will reduce production by more than 80,000 barrels per day, most of it being heavy oil. The planned turnaround at the Lloydminster Upgrader is still being deferred to late Q3 2020 while maintenance work will continue with operations being modified for safety reasons. Thermal bitumen production in the area, such as the Tucker Thermal Project, has been reduced due to anticipated production backlogs in Western Canada. The company says these projects are flexible and can be safely ramped down to minimum rates and picked back up when conditions improve. Construction on the Spruce Lake North thermal project has been suspended and additional Lloydminster projects expected to be completed in 2020 have been deferred. Western Canada oil and gas production is being reduced or shut in and no further capital expenditures are planned in 2020. The company has also suspended the strategic review on its retail and commercial fuels business. Husky Energy cut its 2020 spending budget by $1 billion in March with a $900 million reduction in capital expenditures and $100 million in cost-saving measures. Image source: Getty Images While there was a sharp bounce back in many TSX stocks, energy stocks have continued to dig deeper since last month. To add to the woes, the crude oil supply glut is getting terrible day by day amid the declining demand. The WTI crude oil fell below $13 today — levels not seen in the last more than 20 years. The TSX Composite Index rose almost 2% last week and has surged approximately 30% since its recent lows last month. However, TSX energy stocks did not follow suit. Top energy company Husky Energy (TSX:HSE) stock fell almost 25%, while Vermilion Energy (TSX:VET)(NYSE:VET) tumbled 20% last week. TSX energy stocks continue to be volatile In the last few months, we have seen many Canadian oil producers cutting their capital expenses and dividends for the current year. Given the continued deteriorating state of crude oil, we might see further such cash-retention remedies from these companies. Husky Energy is one of the biggest oil producers in Canada with approximately 300,000 barrels of oil per day. The stock has fallen more than 65% so far this year. The company today again cut its 2020 capital spending by half to approximately $1.7 billion. However, Husky looks well placed in these challenging times mainly due to its strong balance sheet. As of the end of the first quarter of 2020, the company had approximately $4.7 billion in cash and available credit facilities. Also, it does not have any long-term debt maturities until 2022. Husky Energy is currently trading at a dividend yield of 14% at the moment, notably higher than its historical average yield. In 2019, the company paid total dividends of $0.5 per share, while it earned $0.71 per share, representing the payout ratio of around 70%. The equation could imbalance this year if oil remains at these levels for a prolonged period. https://www.fool.ca/2020/04/20/2-tsx-stocks-that-lost-up-to-25-last-week/ Vermilion Energy suspended dividends last week Vermilion Energy suspended its dividends last week considering the worsening crude oil scenario. Notably, the complete suspension of dividends highlights the dire situation for the energy company. It had trimmed dividends twice last month. TSX stock Vermilion has already dented investors’ portfolios with a more than 75% fall so far this year. Now the dividend suspension could further make investors anxious. In the last 12 months, Vermilion stock has fallen almost 90%. With lower production and weak oil prices, these energy companies will likely take a huge dent on their bottom lines this year. TSX energy stocks could continue to be volatile with notable downward pressure in the short to medium term. Things could get a little better in the energy markets in the second half of 2020. The lockdowns driven by the pandemic will likely be released, and there will hopefully be a demand surge for oil. However, the outlook for the energy sector in the short to medium term remains bleak. The longer-than-expected lockdowns and crude oil storage woes will probably push oil prices down more, complicating things further for cash-starved energy companies. Canadian Stocks to Buy on the Cheap During the Market Crash Many investors fear market crashes. However, long-term investors should embrace this crash, because bear markets can potentially allow you to make millions. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you. Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. 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