(Reuters) - Encana Corp (ECA.TO) blew past analysts’ estimates for quarterly profit on Wednesday, as the oil and gas producer benefited from rising shale oil production in the Permian Basin, where it operates one of its biggest oilfields.
U.S. oil production hit a record 11 million barrels per day in July, driven by the prolific Permian Basin of West Texas and New Mexico.
Encana’s total production rose 7 percent to 337,900 barrels of oil equivalent per day (boe/d) in the second quarter ended June 30, with its core assets contributing 96 percent of total volumes, the company said. Permian production rose 43 percent.
Total production of 323,000 boe/d from core assets were ahead of its estimates of 321,600 boe/d, Jefferies analysts said.
The company’s profit also got a boost from a 20 percent jump in realized prices to $58 per barrel.
Other than Permian, Encana has been focusing on Montney and Duvernay oilfields in western Canada and Eagle Ford in the United States.
“Our performance positions us for a strong second half of the year and has us on track to generate free cash flow in 2018, one year earlier than originally targeted in our five-year plan,” Chief Executive Doug Suttles said.
The Calgary-based company reported net loss of $151 million, or 16 cents per share, in the three months ended June 30, compared with a profit of $331 million, or 34 cents per share, a year earlier.
Excluding one-time items, the company earned 21 cents per share, beating analysts’ average estimate of 13 cents, according to Thomson Reuters I/B/E/S.
Reporting by Nishara Karuvalli Pathikkal; Editing by Saumyadeb Chakrabarty and Anil D'Silva