Encana Posts Large 2Q Loss on $1.7B Impairment Charge
Encana Corp. posted a hefty second-quarter net loss after recording a $1.7 billion non-cash, after-tax impairment charge mainly from the decline in natural-gas prices, and said further impairment charges are likely given the current pricing environment.
The Calgary, Alberta-based company, a major gas producer, said it lost $1.48 billion, or $2.01 a share, compared with a year-earlier profit of $383 million, or 52 cents.
It said operating earnings came in at 27 cents a share in the latest period. The Thomson Reuters mean estimate was for earnings of 19 cents a share.
Revenue tumbled to $731 million from $1.99 billion, and fell well below the $1.48 billion that analysts were expecting.
Encana said its commodity-price hedging program contributed to a realized natural gas price of $4.79 per thousand cubic feet during the quarter, keeping cash flow on track with its expectations for the year. Cash flow was $794 million in the quarter.
It said it's continuing to work on a strategic shift which targets accelerated development of oil and liquids-rich natural-gas plays.
Encana also said it opened data rooms during the quarter for three investment opportunities with respect to its Alberta Duvernay asset, a group of U.S. liquids-rich plays and an about 10% stake in the Cutbank Ridge Partnership. It said Wednesday there has been "strong interest" from potential partners.
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