CALGARY, Alberta, Dec. 14 (UPI) -- Canadian energy company Encana said it was cutting its capital program for 2016 by 25 percent, though nearly all of its spending would focus on four key areas.
The company, which focuses heavily on U.S. and Canadian shale basins, said its capital budget for next year will be around $436 million, or 25 percent lower than 2015.
"The company will continue to proactively manage its balance sheet while executing on its strategy in 2016," the company said in a statement. "The 2016 capital program is based on assumptions of $50 per barrel."
Encana's budget outline mirrors announcements made last week by Chevron and ConocoPhillips. Royal Dutch Shell this week said its planned merger with British energy company BG Group would streamline operations, but lead a 2 percent reduction in the combined workforce.
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Encana in October received about $900 million in exchange for the sale of assets in the Denver-Julesburg shale basin in Colorado to an entity controlled in part by Canada Pension Plan Investment Board. The company in August sold its natural gas assets in the Haynesville shale basin in Louisiana for $850 million.
In its latest statement, the company, which has headquarters in Calgary, said its capital program for 2016 was "highly disciplined," with more than 80 percent of its planned $1.6 billion targeting the Eagle Ford and Permian shale basins in Texas and the Duvernay and Montney shale fields in Canada.
Encana President and Chief Executive Officer Doug Suttles said the company was focused on reducing debt, improving operational efficiency and returning value to shareholders with its focus on North American shale.
"We will continue to deliver strong margin growth through 2016 by directing the majority of our capital to drilling and completions activity in our core four assets," he said in a statement. "This will maintain their scale and position the company to grow long-term shareholder value and cash flow into 2017 and beyond."
