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Dec 11 (Reuters) - EnCana Corp (ECA.TO), Canada’s No. 1 oil and gas producer, cut its 2009 capital budget by 18 percent to about $6.1 billion as it looks to weather falling commodity prices and economic uncertainty.
The company, which earlier this year was forced to postpone plans to spin off its oil sands operations because of credit worries, said capital spending may rise up or down $500 million from its current forecast for 2009.
Canadian petroleum companies have been cutting back on spending plans for next year to cope with a shortage of inexpensive credit and oil prices that have fallen more than $100 a barrel since rising above $147 in July.
Encana’s capital spending for 2008 was budgeted at $7.4 billion.
The company also cut its 2008 cash flow to range between $9.4 billion and $9.6 billion, or $12.50 to $12.80 per share, down from its earlier view of $10 billion to $11 billion, or $13.30 to $14.65 a share, to reflect the lower Chicago crack spreads and WTI oil prices experienced in the fourth quarter.
The Calgary, Alberta-based company said it sees 2009 production levels to remain similar to 2008, in the range of about 4.5 Billion cubic feet of natural gas equivalent per day (Bcfe/d) to 4.7 Bcfe/d
EnCana said it plans to invest about $4.5 billion, or 60 percent of 2009 forecast cash flow, to maintain total natural gas and oil production at similar 2008 levels, with investment directed primarily at key resource plays. It also plans about $1.6 billion of capital investment in long-term production and refining assets.
EnCana shares rose C$3.61 to C$59.64 on the Toronto Stock Exchange on Wednesday. The shares have dropped 13 percent over the past 12 months while the exchange’s benchmark index has fallen 38 percent over the period. (Reporting by Antonita Madonna Devotta in Bangalore, Editing by Dinesh Nair)