Encana Posts Profit In Q3 As Liquids Volumes Climb - Update

(RTTNews) - Canadian energy producer Encana Corp. (ECA.TO, ECA) Wednesday reported a profit for its third quarter compared to a loss last year, as oil and natural gas liquids production volumes climbed 92 percent from last year. The results also reflected hefty impairments in the prior year.

The company said it is on track to hit its year-end exit rate liquids production target of 70,000 to 75,000 barrels per day.

Oil and natural gas liquids or NGLs production volumes in the quarter averaged about 58,200 barrels per day or bbls/d, up 92 percent from the prior year. Natural gas production volumes for the quarter averaged around 2.72 billion cubic feet per day or Bcf/d, down 6 percent from last year.

Encana realized gas price dropped to $4.0 per Mcf from $4.91 per Mcf last year. Realized oil price was $90.42 per bbl, up from $80.04 per bbl a year ago.

For the third quarter, the company posted net earnings of $188 million or $0.25 per share. In the prior-year quarter, the company posted a net loss of $1.24 billion, which included impairments of $1.19 billion.

Cash flow declined to $660 million or $0.89 per share from $913 million or $1.24 per share a year ago.

Operating earnings were $150 million or $0.20 per share, lower than $263 million or $0.36 per share in the prior year. Cash flow and operating earnings are non-GAAP measures, the company said.

On average, 14 analysts polled by Thomson Reuters expected the company to earn $0.16 per share for the quarter. Analysts' estimates typically exclude special items.

Earlier in the year, Encana set a target to achieve cost savings and capital efficiency gains of $100 million to $150 million over 18 months relative to budgeted plans; by year-end, the company expects to realize about $110 million of that total.

The company said it remains on track to achieve total liquids production of 50,000 bbls/d to 60,000 bbls/d for the year, compared to an average of 31,000 bbls/d in 2012.

Encana has revised its guidance for expected 2013 natural gas production to be between 2.7 Bcf/d and 2.8 Bcf/d, an adjustment which reflects asset divestitures and delays associated with ongoing work to ramp up Deep Panuke offshore project to its full production capacity.

The company said it plans to announce its long-term strategic plan and fourth-quarter dividend before the end of the year.

ECA closed Tuesday's regular trading at $18.24 on the NYSE. On the Toronto Stock Exchange, the shares ended at C$18.79.