Encana Swings to First Quarter Loss; CEO Search Continues

Encana Corp. said Tuesday it posted a loss in its first quarter, hurt in part by a hedging-related loss and lower natural gas and liquids prices.

The Calgary, Alberta-based company said it lost $431 million in its latest quarter ended March 31, mainly due to a $266 million hedging-related loss and a loss on foreign-exchange. A year earlier, the natural-gas focused company posted a profit of $12 million.

Opearting earnings fell to $179 million, or 24 cents a share, from $240 mllion, or 33 cents. The Thomson Reuters mean estimate was for a profit of 8 cents a share.

Cash flow was also lower, falling to $579 million, or 79 cents a share, from $1.02 billion, or $1.39 a year earlier.

Encana said its oil and natural gas liquids average production jumped 48% to 43,500 barrels a day in its first quarter, while natural-gas production fell 12% to 2.88 billion cubic feet a day. It said its realized gas price dipped 16%, while its average realized liquids price dropped 17%.

"Our focus remains on reducing costs and increasing our profitability," Clayton Woitas, interim president and chief executive, said in a statement. "We expect the cost reduction efforts we've made at the beginning of this year to have an impact on our financial results during the second half of the year."

Encana said the search for its next president and chief executive is progressing and is expected to be complete by the end of June. Mr. Woitas has held the position on an interim basis since long-time president and chief executive Randall Eresman announced his retirement in January.

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Encana Swings to First Quarter Loss; CEO Search Continues

Encana Corp. said Tuesday it posted a loss in its first quarter, hurt in part by a hedging-related loss and lower natural gas and liquids prices.

The Calgary, Alberta-based company said it lost $431 million in its latest quarter ended March 31, mainly due to a $266 million hedging-related loss and a loss on foreign-exchange. A year earlier, the natural-gas focused company posted a profit of $12 million.

Opearting earnings fell to $179 million, or 24 cents a share, from $240 mllion, or 33 cents. The Thomson Reuters mean estimate was for a profit of 8 cents a share.

Cash flow was also lower, falling to $579 million, or 79 cents a share, from $1.02 billion, or $1.39 a year earlier.

Encana said its oil and natural gas liquids average production jumped 48% to 43,500 barrels a day in its first quarter, while natural-gas production fell 12% to 2.88 billion cubic feet a day. It said its realized gas price dipped 16%, while its average realized liquids price dropped 17%.

"Our focus remains on reducing costs and increasing our profitability," Clayton Woitas, interim president and chief executive, said in a statement. "We expect the cost reduction efforts we've made at the beginning of this year to have an impact on our financial results during the second half of the year."

Encana said the search for its next president and chief executive is progressing and is expected to be complete by the end of June. Mr. Woitas has held the position on an interim basis since long-time president and chief executive Randall Eresman announced his retirement in January.

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Jogmec to Develop Shale Technology With Encana, Mitsubishi

TOKYO - Japan Oil, Gas and Metals National Corp., or Jogmec, Wednesday said it has agreed with Encana Corp. and a unit of Mitsubishi Corp. to jointly develop technologies to extract hydrocarbon from shale more efficiently.

Thousands of horizontal wells are drilled in a typical shale block operation. "If the number of wells necessary to extract a same amount of hydrocarbon falls, production cost would decrease," a Jogmec spokesman said.

Government-funded Jogmec, together with Encana and Mitsubishi unit Cutbank Dawson Gas Resources Ltd., will conduct geomechanical and seismic studies using data from a shale gas asset in the Montney formation of northeastern British Columbia, Canada, in which both Encana and Mitsubishi have interests.

Jogmec expects the studies to increase the asset's value. The spokesman didn't specify the budget for the studies.

Energy-starved Japan is interested in natural gas in North America, made cheaper by a supply glut amid booming shale development. North American gas users have expressed concern about a price increase should it be exported.

North America's benchmark Henry-Hub natural gas prices have fallen to around $4 per million British thermal unit from above $12/mmbtu in 2008.

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Encana Posts Smaller 4Q Loss; Results Beat Views

Encana Corp., which has been grappling with a slump in natural-gas prices, posted a fourth-quarter loss that was much smaller than its year-earlier loss and better than analyst expectations.

The Calgary, Alberta-based natural-gas focused company said it lost $80 million in its latest quarter, compared with a loss of $476 million a year earlier.

Operating earnings, which exclude amounts related to hedging and impairments, improved to $296 million, or 40 cents a share, from $232 million, or 31 cents, a year earlier.

The Thomson Reuters mean estimate was for a profit of 33 cents a share.

Cash flow dipped 18% to $809 million, or $1.10 a share.

Natural gas production averaged 2.95 billion cubic feet a day, down 15% from a year earlier, while liquids production jumped 51% to 36,200 barrels a day.

Encana said it's budgeting about 80% of its 2013 operating budget to light oil and liquids-rich natural gas plays.

Capital spending for 2013 is projected at $3.0 billion to $3.2 billion and cash flow at $2.3 billion to $2.5 billion. It's targeting net divestitures in the range $500 million to $1.0 billion.

Encana said it expects oil and natural gas liquids production this year to be between 50,000 and 60,000 barrels a day, with annual natural gas production around 2.8 billion to 3.0 billion cubic feet a day.

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