On December 3, Canadian Oil Sands Ltd. announced a 42.9% dividend cut effective with the payment scheduled for late February 2015. The company (TSX: COS, OTC: COSWF) doesn’t hedge, or sell its production forward to lock in cash flow, so it’s taking the drop in oil prices on the chin.

Through its 36.7% interest in the Syncrude project, it’s a pure play on the oil sands. As such, its production costs are much higher than those of conventional producers. Chief financial officer Rob Dawson said the company couldn’t pay its dividend of 35 cents per share per quarter next year without exceeding its self-imposed cap of $2 billion in net debt, so the dividend was cut to 20 cents per share. Hold.

Also note that we’ve added Pengrowth Energy, Penn West Petroleum Ltd. and Spyglass Resources to the Watch List due to their extreme sensitivity to declining crude oil prices. All three have relatively weak balance sheets, and Penn West is selling off assets to pay down debt. 

We’ve also added Noranda Income Fund to the list following management’s dour commentary about the May 2017 expiration of its zinc concentrate supply agreement with Glencore Canada.

We removed Colabor Group from the list after the company reported solid third-quarter financial and operating results that reflect good progress on management’s turnaround program.

We’ve also removed GMP Capital, after management reported a 58.5% increase in third-quarter revenue and adjusted net income of $4.4 million versus a year-ago loss of $1.1 million.