I had a hunch that this was coming, I just wasn’t sure when.  Provident Energy (PVX: chart, web, Y!) cut its distribution to $0.06 CAD or roughly $0.05 USD per share.

Naturally this is due to deflated crude oil prices, and a less than appealing outlook on the commodity price for the rest of 2009.

The company says that the reduction in the distribution, and the outlined capital program reflects the business objectives which “emphasize sustainability, fiscal prudence, and particularly in the current economic climate, preservation of balance sheet strength.”

They further state that the monthly distribution will continue to be set based on the company’s monthly rolling forecast.

The drop in the distribution brings the yield back in a more reasonable %13 return rate, but I continue to wonder if the cut was sufficient, or if there will be more in store in the coming months.

Corner Office Comments

I believe that crude oil is oversold, and may start to see the swing back to the upside after the OPEC meeting next month.

I don’t think the distribution cut was unreasonable, and I still feel that Provident is one of the better run Canadian Royalty Trusts out there, with a conservative outlook on both the energy and financial industry.

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Investing CANROY, distribution, Provident Energy, PVX, Royalty Trusts