UPDATE 5-EnCana profit beats Street, lifts gas-play spending
* Encana doubles spending on Haynesville shale play
* EPS $1.26 vs forecast $0.67
* Cash flow drops 18 pct to $1.94 billion
* Shares jump more than 4 percent (Adds CEO quotes. In U.S. dollars unless noted)
CALGARY, Alberta, April 22 (Reuters) - EnCana Corp (ECA.TO) is pumping another $290 million into a big Louisiana natural gas play despite depressed prices, Canada's biggest energy company said on Wednesday as it reported higher-than-expected profit.
EnCana shares jumped C$2.21, or more than 4 percent, to C$54.92 on the Toronto Stock Exchange as investors welcomed the rare optimism in an industry that has gone from boom to bust in seven months as prices have tumbled.
The company now plans to spend $580 million this year at its Haynesville unconventional gas properties in northwestern Louisiana, one of several shale gas prospects that have changed the outlook for North American supply in recent years.
Chief Executive Randy Eresman said he expects Haynesville to become one of his company's most important gas assets.
"We now expect to drill a total of 50 net wells in the play for 2009. Additional capital for this play will be sourced from savings identified in other areas of the company," he said.
EnCana is developing other unconventional plays, such as Horn River in northeast British Columbia and Deep Bossier in East Texas, with gas prices at less than half last year's level.
Shale prospects are known for large reserves that are tough to tap, requiring rapid-fire drilling and rock fracturing to gradually lift output. EnCana is one of the largest developers of such plays.
A recent focus on such plays has changed the outlook for the North American gas market dramatically and points to a lengthy period of ample supplies, Eresman told reporters.
EnCana has signed up for space on two pipeline proposals, the expansion of the Boardwalk Pipeline Partners' (BWP.N) Gulf South pipeline, and Energy Transfer Partners' (ETP.N) planned ETC Tiger line, to carry output from Haynesville to market.
EnCana had planned to split into a gas producer and an integrated oil sands and refining firm, but shelved the idea last year as commodity and credit markets soured.
"I think you should forget about it in the current environment," Eresman said. Continued...
