Encana chief seeks patience after prices sag

Thu Sep 15, 2011 4:48pm EDT
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Investors in Encana Corp should be patient while Canada's biggest natural gas producer unlocks richer reserves in its long-held producing lands and in newly acquired ones, its chief executive said on Thursday.

Encana is developing three new plays with potential for liquids-rich gas and oil in Canada and the United States and expects to be in a position within the next year to offer some forecasts of their production potential, Encana CEO Randy Eresman said in an interview with Reuters.

The shift to higher-value liquids is just one of several initiatives the company has undertaken to deal with a lengthy malaise in prices for dry gas.

Eresman conceded Encana could have moved more quickly on that front. "But it's not the way we make decisions," he said. "Historically, our decisions have been pretty solid, and I'd say just give us some time to do these things - the balls in the air will come back in hand again."

Shares in Encana have fallen about 22 percent in the past 12 months, with much of the drop this summer.

Eresman attributed it partly to disappointment over the collapse of the C$5.4 billion ($5.5 billion) joint venture with PetroChina after more than a year of talks.

That was aimed at driving production growth at the company's Cutbank Ridge, British Columbia, holdings while limiting use of its own capital. Other joint ventures are in the works, including one for the same region, although it is offering less control than what PetroChina sought.

"That did disappoint a lot of investors and disappointed us as well, partly because it took so much time and partly because of the need to put that into the public domain," he said.   Continued...