CALGARY, Alberta (Reuters) - Encana Corp (ECA.TO), Canada’s largest gas producer, says it is now seeking several joint-venture partners for its U.S. shale plays, instead of just one, so that it can better compete with a host of other opportunities put on the market by competitors.
The company, which posted a big third-quarter loss on $1.19 billion in noncash charges on Wednesday, said it has opted to split its Eaglebine, Tuscaloosa Marine Shale and Mississipian Lime properties into three separate investment packages rather than trying to find a single partner to develop them.
“There are significant assets available for joint venture in both the Canadian and U.S. marketplace,” Randy Eresman, the company’s chief executive, said on a conference call.
“We’ve been advised that a combined Tuscaloosa Marine Shale, Eaglebine and Mississipian Lime package may be too large for most interested parties at this time. So we are allowing the plays to be bid on individually.”
Despite the change, Eresman said the company still expects to meet its targets for asset sales and divestitures this year.
The company reported a net loss of $1.24 billion, or $1.69 a share, for the third quarter, compared with a profit of $459 million, or 62 cents a share, in the year-before period.
Operating income, which excludes most one-time gains and charges, fell to $263 million, or 36 cents per share, from $389 million, or 53 cents per share.
Gas prices remained stubbornly low during the quarter and averaged $2.89 per million British thermal units - about 30 percent below where they were a year earlier.
The company, which also produces oil, cut back on gas output. Average gas production fell 14 percent from a year earlier to 2.9 billion cubic feet per day (bcf/d).
The company said wells it shut in earlier this year as prices fell to multi-year loses have now been now largely restored to production and it reaffirmed its 2012 production outlook of 3 bcf per day.
To compensate for low gas prices, Encana has been looking to boost its output of crude oil and natural-gas liquids.
Production of crude oil and natural gas liquids in the third quarter averaged about 30,000 barrels a day, up 24 percent from the year-before period.
Encana faces investigations by U.S. federal and Michigan state authorities over allegations that it colluded with Chesapeake Energy Corp (CHK.N) to lower the cost of land over a promising shale oil and gas field in Michigan. It did not comment on the state of the investigations on Wednesday.
Shares of Calgary-based Encana were down 65 Canadian cents at C$21.91 by late on Wednesday afternoon on the Toronto Stock Exchange.
Reporting by Thyagaraju Adinarayan and Scott Haggett; Editing by Sreejiraj Eluvangal; and Peter Galloway