Encana Reviews Dry Gas Assets, Signals Big Changes
Sept 12 (Reuters) - Encana Corp, Canada's largest gas producer, on Thursday signaled a potential sale of dry natural gas assets as it focuses on more-lucrative oil and gas liquids and cutting the number of properties it owns.
Doug Suttles, the former BP Plc executive appointed as Encana's chief executive in June and charged with righting the company after a series of strategic missteps, said the company will push to cut producing properties and revamp its organization as it looks to weather natural gas prices he expects to remain low for years.
"Our existing organization, both its structure and its size, is aligned with the past and not the future," Suttles said at a New York investment conference. "It's built around a bigger capital program and higher cash flow than we have today. We need to get that realigned.
Encana has been hurt by low natural gas prices for much of last year, leading the company to write down the value of its gas assets by about $2.89 billion.
It has also had to weather constant changes in strategy under former Chief Executive Randy Eresman, who left the company in January.
Now Suttles is determined to change strategy again, saying the company will look to narrow its focus from its current portfolio of 28 properties, or plays, while maintaining an investment-grade balance sheet.
"Our production comes from a wide range of locations," he said. "The top performers in our peer group have the majority of their production from a very limited number of plays ... We all understand that focus and discipline in capital allocation is a real key to performance and it's one of the things we have to make radical change in if we're to be successful going forward."
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