Encana Corp. said Wednesday it took a hefty third-quarter impairment charge as a result of low natural-gas prices, its second such charge in as many quarters, resulting in a $1.24 billion net loss for the period.
The natural gas-focused company, based in Calgary, Alberta, recorded a $1.19 billion non-cash impairment charge in the latest quarter, again marking down the value of its natural-gas assets as prices dipped. It took a similar charge in the second quarter.
Encana said third-quarter operating earnings, which exclude the impairment charge and other items, fell to $263 million, or 36 cents a share, from $389 million, or 53 cents a share. Results beat the Thomson Reuters mean estimate for a profit of 26 cents a share.
Encana said natural-gas prices hit their lowest levels in a decade during the first half of the year, leading it to shut in or curtail about 500 million cubic feet a day of production.
The company's third-quarter production averaged 2.9 billion cubic feet a day of natural gas, down 14% from a year earlier, due partly to voluntary capacity reductions. It said production volumes have now been restored and it expects to meet its full-year guidance for production of 3 billion cubic feet a day.
Encana said its realized natural gas prices in the latest quarter totaled $4.91 per thousand cubic feet, down from $5.01 a year earlier.
Cash flow of $913 million, or $1.24 a share, was down from $1.18 billion, or $1.60 a year earlier.
Copyright (c) 2012 Dow Jones & Company, Inc.
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