Encana Corp. announces increase in production while posting a decline in profits for the third quarter. Photo courtesy of Encana Corp.
CALGARY, Alberta, Nov. 12 (UPI) -- Shale-focused Encana Corp. said its overall production was up 35 percent from last year, even as oversupplies drag on crude oil price and profits.
Encana, which has headquarters in Calgary, said production for the third quarter averaged 398,300 barrels of oil equivalent per day. More than 60 percent of the output came from its key shale assets in North America -- Permian, Eagle Ford, Duvernay and Montney. Year-on-year, overall liquids production was up 35 percent.
West Texas Intermediate, the U.S. benchmark for crude oil prices, was trading around $43 per barrel recently, down about 18 percent from the start of 2015. The low price of crude oil has lead to lower profits for oil and natural gas companies.
Encana posted a third-quarter loss of $1.24 billion, compared with earnings of $2.81 billion year-on-year. An operating loss of $24 million was recorded, compared with operating income of $281 million one year ago.
President and Chief Executive Officer Doug Suttles said his company was taking a disciplined approach to capital spending while emphasizing the four shale basins where it's benefited the most.
"Encana is competitively positioned, delivering strong returns in today's price environment with tremendous torque to any uplift in oil prices," he said in a statement.
Encana last month 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.
Combined with previous sell-offs totaling $2.7 billion, the company said it should end the year with a debt burden reduction of around $3 billion after offloading the Colorado shale.