* Fourth-quarter operating profit $0.31/share vs est. $0.20
* Fourth-quarter liquids output up 82 pct
* Expects liquids production to rise 30 pct in 2014
Feb 13 (Reuters) - Encana Corp, Canada's largest natural gas producer, reported a smaller-than-expected fall in quarterly operating profit as the company ramped up production of liquids such as light oil and condensate.
Encana is in the midst of a restructuring launched by new Chief Executive Doug Suttles and is now looking to cut production of low-value natural gas and increase output of more lucrative oil and natural gas liquids.
Liquids output rose 82 percent to average 66,000 barrels per day in the fourth quarter ended Dec. 31.
Encana said it expected liquids production to rise 30 percent in 2014, making up for the small decrease expected in natural gas output.
The company said on Thursday that its focus on growing liquids output and lowering cost structures would help lift margins.
Encana set capital investment target of $2.4 billion-$2.5 billion for the year, lower than the $2.7 billion it spent in 2013.
The company, which has said its strategy now is to value profitability over production volumes, is planning to spin off its freehold lands in Western Canada into a separate company.
Encana's cash flow, a key indicator of its ability to pay for new projects and drilling, fell 16 percent to $677 million in the fourth quarter.
The company's net loss widened to $251 million in the quarter from $80 million, a year earlier.
Excluding most one-time items, Encana posted an operating profit of $226 million, or 31 cents per share, down from $296 million, or 40 cents per share, a year earlier.
Analysts on average had expected the company to report operating profit of 20 cents per share, according to Thomson Reuters I/B/E/S.
Encana's shares closed at C$20.48 on Wednesday on the Toronto Stock Exchange.