Encana operating profit rises on hedging gains
(Reuters) - Canada's largest natural gas producer Encana Corp's (ECA.TO: Quote) (ECA.N: Quote) first-quarter operating profit rose, as it realized higher prices for natural gas, helped by its hedging program.
Encana, which is seeking partnership deals for many of its properties as a way to cope with weak gas prices, said results were helped by its commodity price hedging program, which contributed $358 million or 49 cents per share in after-tax gains.
Net operating income rose 10 percent to $240 million, or 33 cents per share from a year earlier.
Cash flow, a key measure of the company's ability to fund development, rose 6 percent from last year to $1 billion, or $1.39 per share.
Oil and natural gas liquids production for the quarter rose 26 percent to about 29,000 barrels per day (bbls/d).
Natural gas production in the first quarter rose 2 percent to 3.27 billion cubic feet per day. In February, Encana said it planned to shut off 250 million cubic feet per day of production as prices languished, and said reductions could hit 600 million cubic feet a day.
The company and its peers have struggled with natural gas prices that have slumped to 10-year lows. Encana seeks to withstand the impact by pursuing prospects that have potential for higher-value natural gas liquids.
Shares of the company, which have lost 15 percent of their value in the last three months, closed at C$17.65 on Tuesday on the Toronto Stock Exchange.
(Reporting by Maneesha Tiwari in Bangalore; Editing by Supriya Kurane)
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