November 12, 2009 / 12:09 PM / 9 years ago

CORRECTED - CORRECTED-UPDATE 1-EnCana Q3 profit plunges

(Corrects estimates to $1.17 from $1.14 in first bullet point and fourth paragraph. Also corrects paragraph 6 to clarify that the 2010 production view is in bcfe/d not bboe/d)

* Q3 oper EPS $1.03 vs est $1.17

* Q3 revenue drops 64 pct

* Sees capital investment of $3.6 bln to $3.9 bln for ‘10 (In U.S. dollars unless noted)

Nov 12 (Reuters) - EnCana Corp (ECA.TO), Canada’s largest natural gas producer, reported a 99 percent drop in third-quarter profit as oil and gas prices sank.

The company, which is readying to split itself into separate gas and oil producing companies, said net income dropped to $25 million, or 3 cents per share, from $3,553 million, or $4.73 a share, in the third quarter of 2008.

Excluding unusual items such as unrealized hedging gains and mark-to-market losses, the company’s operating earnings fell 46 percent to $775 million, or $1.03 per share.

The operating result lagged analysts’ average profit estimate of $1.17 per share, according to Thomson Reuters I/B/E/S.

In 2010, EnCana plans to invest between $3.6 billion and $3.9 billion in capital and targets natural gas production growth of about 10 percent.

EnCana expects to produce between 3.2 to 3.3 billion cubic feet of natural gas equivalent per day in 2010.

Most Canadian oil companies have posted lower third-quarter earnings as the recession cut prices and demand for oil and natural gas.

During the quarter, benchmark oil prices averaged $68.24 a barrel, down 42 percent from a year earlier. Natural gas averaged $3.44 per million British thermal units on the New York Mercantile Exchange, down 62 percent.

EnCana will keep most of the company’s natural gas production after the split, should shareholder approve the move later this month, while the new Cenovus Energy Inc will operate its oil assets.

Cash flow, an indicator of the company’s ability to pay for new projects and drilling, fell 26 percent to $2.08 billion, or $2.77 a share, from $2.81 billion, or $3.74 a share, in the year-ago quarter.

Gas production fell 9 percent to 3.55 billion cubic feet per day while oil and natural gas liquids production increased about 4 percent to 139,000 barrels per day.

EnCana’s revenue fell 64 percent to $3.88 billion.

EnCana shares closed at C$60.70 Wednesday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Ratul Ray Chaudhuri)

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