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A worker holds a cup of heavy oil before it is shipped to the market at the Cenovus Energy Christina Lake Steam-Assisted Gravity Drainage (SAGD) project 120 km (74 miles) south of Fort McMurray, Alberta, August 15, 2013. Cenovus currently produces 100,000 barrels of heavy oil per day at their Christina Lake tar sands project. REUTERS/Todd Korol REUTERS/Todd Korol

The continued drop of prices of crude oil in the world market has claimed another victim among Canada’s oil producing firms. Cenovus Energy Inc, Canada's second-largest independent oil producer, announced on Thursday about 800 jobs stand to be laid off from the company, apart from a planned slash in its 2015 capital budget.

Cenovus had actually slashed its budget earlier, from an initial C$2.5 billion to C$2.7 billion estimate, to C$1.8 billion and C$2 billion. But it said it could further reduce the figure if oil prices fall further. "If we were to see substantially lower prices we do have the flexibility if we chose to, to reduce capital further by up to C$500 million," Brian Ferguson, the company's chief executive, told investors, analysts and reporters on a conference call.

The programmed job cuts, representing percent of its entire workforce, will come contract staff associated with the projects planned for delay or deferment, Ferguson said. As of end 2013, the company’s total full-time employees were just under 3,600, excluding contractors.

Also on Thursday, Cenovus announced it had suffered a net loss of C$472 million in the fourth quarter ended Dec. 31, equivalent to 62 Canadian cents per share, from C$58 million, or 8 Canadian cents per share, a year ago. It added its operating loss was at C$590 million, or 78 Canadian cents per share. Sales for the quarter only hit $4.34 billion, from the previous $4.83 billion.

Cenovus likewise announced employee salary increases for 2015 will be suspended. Discretionary spending on travel, conferences, offsite meetings and information technology upgrades will also be affected.

Cenovus said it will suspend plans on all projects, except at its Foster Creek and Christina Lake operations which it said are already well advanced. "We ended 2014 in a solid financial position with approximately $900 million in cash and cash equivalents on our balance sheet and debt ratios well within our target ranges," Ferguson said.

"In the current challenging oil price environment, we're reducing capital spending in order to help preserve our financial resilience. As well, we have additional flexibility to further reduce capital spending if oil prices continue to fall or remain low for an extended period."

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