CALGARY -- For the second time this year, Calgary-based Husky Energy has slashed its 2020 capital spending in response to unfavourable market conditions.

On Monday, the energy company announced the decision to cut an additional $700 million in spending from its guidance model released in December 2019.

"We have taken immediate action to preserve our balance sheet and core business in this commodity price environment,” said Husky Energy CEO Rob Peabody in a statement. "Our focus remains on health and safety, and on increasing Husky’s resilience.

"As the market rebalances supply with demand over a very short period in North America, negative cash margins before operating costs are occurring.  Reducing production minimizes our negative cash margin exposure."

The company plans to reduce production and refinery throughput until "supply and demand is rebalanced". It also plans to reduce discretionary capital spending and effort to improve liquidity.

In mid-March, Husky Energy reduced its 2020 spending budget by $1billion. The reduction consisted of $900 million in capital expenditures and the introduction of $100 million in cost-saving measures.

The combined budget reduction accounts for approximately half of the company's initial 2020 budget as outlined in its 2020 capital guidance.