Encana Profit Falls 7% After Production Declines

Calgary-based Encana (an oil and gas producer), saw their profit fall 7.3% compared to the same period last year.

Production was down to 284,000 barrels of oil equivalent per day compared to 338,000 last year. Natural gas production fell a full 29%.

Profit fell from $317 million to $294 million.

Notably, Encana seems to be doing well in the Permian basin in the United States, raising the issue of a possible gap between US and Canadian production going forward.

The company also locked in 88,000 barrels per day of oil and condensate in 2018 at the price of $53 per barrel in USD, protecting them against a possible oil price decline, while forgoing the ability to benefit if prices rise further.

Encana shares fell 2.3% on the TSX.

Encana’s profit decline will raise further concerns among many about the health of Canada’s energy industry, particularly as we have a federal government unwilling to stand up for Canada’s energy sector.

Spencer Fernando