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UPDATE 1-Encana reports 3rd-qtr loss on $1.2 bln charge
October 24, 2012 / 11:06 AM / 5 years ago

UPDATE 1-Encana reports 3rd-qtr loss on $1.2 bln charge

Oct 24 (Reuters) - Encana Corp, Canada’s largest gas producer, posted a third-quarter loss as it recorded a $1.19 billion after-tax impairment charge related to a fall in natural gas prices.

Gas prices remained stubbornly low during the quarter and averaged $2.89 per million British thermal units - about 30 percent below where they were a year earlier.

The company, which also produces oil, cut back on gas output. Average gas production fell 14 percent from a year earlier to 2.9 billion cubic feet per day (bcf/d).

Net revenue fell more than 50 percent to $1.03 billion. Analysts were looking for $1.48 billion, according to Thomson Reuters I/B/E/S.

The company said the shut-in wells and curtailed production have now been now largely restored and it reaffirmed its 2012 production outlook of 3 bcf/d.

To compensate for low gas prices, Encana has been looking to boost the output of crude oil and natural-gas liquids.

Production of crude oil and natural gas liquids in the third-quarter averaged about 30,000 barrels per day, up 24 percent from the year-ago period.

The company reported a net loss of $1.24 billion, or $1.69 per share, for the third quarter, compared with a profit of $459 million, or 62 cents per share, in the prior-year period.

Operating income, which excludes most one-time gains and charges, fell to $263 million, or 36 cents per share, from $389 million, or 53 cents per share.

Encana faces investigations by U.S. federal and Michigan state authorities over allegations that it colluded with Chesapeake Energy Corp to lower the cost of land over a promising shale oil and gas field in Michigan.

Shares of Calgary-based Encana closed at C$22.56 on Tuesday on the Toronto Stock Exchange.

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