Encana cuts 2015 budget after 85 percent fall in operating profit
By Nia Williams
CALGARY, Alberta (Reuters) - Encana Corp (ECA.TO: Quote), Canada's largest natural gas producer, slashed its 2015 capital budget by a quarter on Wednesday in response to a slump in global crude oil prices.
The company joins a slew of other Canadian oil and gas producers, including Suncor Energy (SU.TO: Quote) and Cenovus Energy (CVE.TO: Quote), that have cut back spending as benchmark crude prices CLc1 more than halved since June.
Encana said it will spend between $2 billion and $2.2 billion in 2015, down from the original budget of $2.8 billion announced in December.
Chief Executive Officer Doug Suttles also said Encana, which since 2013 has been selling off natural gas assets to concentrate spending on regions rich in high-value gas liquids and oil, will look to see if there are further opportunities to trim its portfolio.
"We are well prepared to act ... The lower points in the commodity cycles are usually the most exciting times," Suttles said in response to a question on the potential for more asset sales during a fourth-quarter earnings call. "We're prepared to respond if the right opportunities come along."
Encana posted an 85 percent drop in fourth-quarter operating profit as oil output rose but realized prices fell.
Operating profit, which excludes most one-time items, slumped to $35 million, or 5 cents per share, in the three months ended Dec. 31, from $226 million, or 31 cents per share, a year earlier.
Analysts on average had expected 21 cents per share, according to Thomson Reuters I/B/E/S. Continued...