Encana Corp. on Thursday posted a third-quarter profit as cost-cutting efforts helped the oil and gas producer offset lower production.
Calgary, Alberta-based Encana, which has been selling off assets to sharpen its focus on four core oil-and-gas plays and shore up its balance sheet, said it lowered its operating and transportation and processing costs by 30% compared with the year-earlier quarter.
"Our relentless focus on driving efficiency into every corner of the business is increasing our margins and delivering significant cash flow growth," Chief Executive Doug Suttles said in a release.
Like its peers in the oil patch, Encana has been hit hard by slumping oil and gas prices, leading it to cut jobsand shed assets to trim costs. In July, it closed the sale of assets in northwestern Alberta and Colorado for around $1.1 billion, and bolstered its balance sheet in September with a share offering that raised more than $1 billion. Earlier this year, it said it was laying off 20% of its workforce.
Encana, whose four key oil-and-gas plays are in the Eagle Ford and Permian shale basins in Texas and the Duvernay and Montney basins in Western Canada, said it lowered its net debt in the latest quarter by about $2 billion from the previous quarter. Since the end of 2014, it has cut debt by more than $3.5 billion, it said.
In the quarter ended Sept. 30, Encana said it earned $317 million, or 37 cents a share. A year earlier, it lost $1.2 billion, hurt by a hefty impairment charge.
Adjusted to exclude items, it said its operating profit was $32 million, or 4 cents a share, compared with an operating loss of $24 million, or 3 cents a year earlier. The Thomson Reuters mean estimate was for an operating loss of 5 cents a share.
Encana said its natural-gas production fell 14% in the latest quarter from a year earlier, while oil-and-gas liquids production dropped 17%. It said its realized gas price was down about 46%, while its realized liquids price improved almost 7%.
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(END) Dow Jones Newswires
November 03, 2016 08:55 ET (12:55 GMT)
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