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The slump in natural gas prices is taking its toll on NAL Energy (NAE-T). The natural gas producer announced on Thursday it is slashing its dividend by 29 percent to 5 cents per share from 7 cents per share.
The cut takes effect on its January dividend payment due in April. In a statement the company blames weak natural gas prices and an "uncertain economic outlook for 2012."
Speaking to BNN, Andrew Wiswell, President and CEO at NAL Energy, says the lower dividend will save the company $36 million a year and allow NAL to change its focus from natural gas to oil.
"We see opportunities in oil that we would like to invest in towards the end of the year -- so maintaining that flexibility to invest in those opportunities was pretty critical," he says.
The announcement comes as natural gas producers across North America face the lowest prices in more than a decade due to a growing supply glut and a mild winter.
Natural gas prices have fallen by 13 percent in the past week.