Encana profit up to $116M on higher revenues
Oil and gas producer Encana Corp. is reporting first-quarter net earnings of $116 million, or 16 cents per share, on higher revenues.
That compares with a loss of $431 million, or 59 cents per share, in the same quarter of 2013.
The Calgary company said it had revenue of $1.89 billion compared with $1.06 billion year-over-year.
Analysts had estimated revenue of $1.88 billion, according to data compiled by Thomson Reuters.
Encana Corp. announced last week that it was spending US$3.1 billion to enter the oil-rich Eagle Ford shale in Texas. Encana has said the Texas property has an estimated drilling inventory of more than 400 locations in the heart of the Eagle Ford.
In its financial results for the quarter ended March 31, Encana said it had operating earnings of $515 million or 70 cents per share, a year-over-year increase of 192 per cent on a per share basis.
Encana said it had liquids volumes of 67.9 thousand barrels per day, a 56 per cent year-over-year increase. Natural gas production in the quarter was 2.8 billion cubic feet per day, down two per cent.
The company also saw cost savings of about $40 million in the first three months of 2014 due to cutting some of its staff and operating efficiencies.
"Our strong first-quarter financial and operational results demonstrate that we are making very good progress executing on our strategy and our teams are delivering on virtually all of the targets that we have set to date," president and CEO Doug Suttles said in a news release on Tuesday.
"Through our focused capital investment, we continue to build momentum in our core growth areas and we're accelerating the transition to a more balanced portfolio through the recent transactions that we've announced."
Last fall, Suttles unveiled a new strategy for Encana, which had for years struggled with low natural gas prices, and juggled operations in dozens of different regions.
The company honed in on five core areas: the Montney and Duvernay in Western Canada; the DJ Basin in Colorado; the San Juan Basin in New Mexico and the Tuscaloosa Marine Shale in the southeastern United States.
Once the deal closes, the Eagle Ford becomes a sixth.
Encana has cut 20 per cent of its staff and is spinning off some of its Alberta land holdings into a separate publicly traded business called PrairieSky Royalty Ltd.
Encana also has recently sold dry gas assets in Wyoming and East Texas, which are less attractive than ones that produce oil and natural gas liquids.
The company also agreed to sell certain East Texas natural gas properties for about $530 million and divested a majority of the U.S.-based assets of Encana Natural Gas Inc.