Enerplus Corp. slashed its budget for capital expenditures (capex) in 2016 and cut its dividend by two-thirds, but the company reported progress in paying back its outstanding debt and plans to continue focusing on targets in North Dakota.

On Friday, the Calgary-based company said it had reduced its capex budget for 2016 to C$200 million (US$145.2 million), a 42.9% cut from the C$350 million (US$254 million) budget the company announced last November. By comparison, the latest capex budget is 58.3% below the C$480 million (US$348.4 million) it planned to spend in 2015.

Under the revised capex program, Enerplus plans to drill 25.9 net wells (18.5 in North Dakota, 1.5 in the Marcellus Shale and 6.0 in the Canadian waterfloods) in 2016 and will enter 24.2 net wells (13.6 in North Dakota, 4.6 in the Marcellus and 6.0 in the Canadian waterfloods) into production.

During an earnings conference call on Friday, Ray Daniels, senior vice president for operations, said current all-in drill and tie-in costs, including facilities, were approaching C$9 million (US$6.53 million).

“One of the drivers for reducing of 2016 capital budget is to preserve the value of our inventory,” Daniels said. “They’re not because the wells are prolific. Our average well in 2015 delivered in excess of 100,000 bbl of oil in less than four months. We believe it is prudent to defer more of these wells until commodity prices have improved.”

The company lowered its production guidance for 2016 to 90,000-94,000 boe/d, which would include crude oil and natural gas liquids (NGL) production of 43,000-45,000 b/d. Last November, it issued production guidance of 100,000-105,000 boe/d for 2016, including 44,000-47,000 b/d for crude oil and NGLs.

Enerplus exited 2015 with total outstanding debt of C$1.2 billion (US$871 million) net of cash, compared to C$1.13 billion (US$820 million) at the end of 2014. CFO Jodine Jenson Labrie said the increase was entirely due to the effect of the weakening Canadian dollar on its U.S. senior notes.

Labrie said Enerplus repaid approximately C$103 million (US$74.8 million) of its senior notes during 2015, and increased the amount drawn on its bank credit by C$6.6 million (US$4.79 million). She said the company plans to repay an additional C$100-115 million (US$72.5-83.5 million) of its debt in 2016.

“At year-end, we were in compliance with all of our covenants,” Labrie said. But she warned that “if the current commodity price environment persists, we would expect to start taking steps to renegotiate our covenants with our lenders towards the end of 2016. Overall, though, we have been able to maintain our financial flexibility and continue to remain in a relatively strong financial position.”

The company said it would cut its dividend from three Canadian cents/share to one Canadian cent, effective with the dividend payable on April 15.

Enerplus produced 106,905 boe/d in 4Q2015, including 46,227 b/d of crude oil and NGLs and 364,065 Mcf/d of natural gas. The fourth quarter helped boost the company’s average production for the full-year 2015 to 106,524 boe/d, which included 46,402 b/d of oil and NGLs and 360,733 Mcf/d of gas. Enerplus beat its production guidance for the year (106,000 boe/d).

The company drilled 45.6 net wells (37.5 oil, 8.1 gas) in 2015, and entered 56.9 net wells (43.8 oil, 13.1 gas) into production. Capital spending totaled C$493.4 million (US$358.1 million) in 2015, the bulk of which, C$419.4 million (US$304.4 million) was spent on wells targeting oil and NGL. The remaining C$74 million (US$53.7 million) went toward development of gas wells.

Broken down by play, fourth quarter production averaged 29,600 boe/d in North Dakota, 204 MMcf/d in the Marcellus and 17,400 boe/d from the company’s Canadian waterflood portfolio.

According to its website, Enerplus holds 74,000 net acres in the Fort Berthold region of North Dakota and the Elm Coulee field in Richland County, MT, and 52,000 net acres in the Marcellus Shale in Pennsylvania. It also holds more than 140,000 net acres in Canada’s Deep Basin, which includes approximately 74,000 net acres targeting the Stacked Mannville zones, and 66,000 net acres in the Willesden Green region of Alberta, which is prospective for the liquids-rich Duvernay Shale.

Last month, Enerplus sold assets in the Ansell, Minehead and Hanlan-Robb areas in Alberta to an undisclosed buyer for C$193 million (US$141 million). Production from the divested assets was projected to be 5,400 boe/d (98% natural gas) in 2016.

During the Q&A session with analysts, CEO Ian Dundas said the company is open to additional divestitures in the future.

“We continue to have small things that don’t have large strategic value and that we’re not putting a lot of money into,” he said. “[Our] teams are focused on optimizing those assets…and when opportunities present themselves for those little things, we take advantage of that. We’ve been very careful in not counting on it, because it’s such a difficult A&D [acquisition and divestiture] market…but we’ve been successful in unlocking arguably our above market metrics on some of our recent trades.”

Enerplus reported a net loss of C$625 million (US$453.6 million) in 4Q2015, but the company was impacted by non-cash charges, including C$266 million (US$193.1 million) related to an asset impairment and a C$426 million (US$309.2 million) valuation allowance for deferred tax assets. That translated to a net loss of C$3.03/share (minus US$2.20/share). For the full-year 2015, the company reported a net loss of C$1.52 billion (US$1.1 billion), which included impairment charges of C$1.35 billion (US$979.9 million). That translated to a net loss of C$7.39/share (minus US$5.36/share) for the year.