CALGARY, Alberta, May 4 (UPI) -- After declaring a loss for the first quarter, Canadian energy company Encana said it is working to cut overall costs by more than $400 million.
Encana reported its revenue for the first quarter was down 40 percent year-on-year to $753 million, while cash flow fell nearly 80 percent to $102 million.
Doug Suttles, the company's president and CEO, said his company was focusing on efficiency and lower well costs at its four key shale assets in North America. Drilling and completion costs at its North American sites were down by up to 44 percent against last year.
"We are on track to deliver $437 million of year-over-year cost savings," he said in a statement.
The company entered 2016 with by saying it was revising its spending plan for the year in order to strengthen its balance sheet with minor impacts on production. "Virtually all" of the spending would focus on its North American shale portfolio.
Encana attributed the quarterly loss to "sharp declines" in energy prices, but stressed its output was robust despite the market pressures. Total liquid production averaged 130,800 barrels per day, which was 8 percent higher year-on-year. The company said it remains on track to meet or beat its production goals for the year.
"The quality of our core four assets, combined with increased capital efficiency and operational innovation, are delivering basin-leading performance, enhancing our competitiveness and contributing to cash flow," Suttles said.
A report this week from Platts Analytics said production from the Eagle Ford shale basin in Texas, included as one of Encana's key holdings, declined about 3 percent in March for the eighth straight month of loss.