Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Encana CEO says Deep Panuke "rocked" in Q1, not shopping platform around

Doug Suttles, president and CEO of Encana, addresses the company's annual meeting in Calgary, Tuesday, May 13, 2014. THE CANADIAN PRESS/Jeff McIntosh

Enlarge Image

Doug Suttles, president and CEO of Encana, addresses the company's annual meeting in Calgary, Tuesday, May 13, 2014. THE CANADIAN PRESS/Jeff McIntosh

CALGARY - Encana Corp. says it's not actively shopping around its Deep Panuke natural gas project in Nova Scotia — an asset CEO Doug Suttles said "rocked" during the first quarter.

After repeated delays, the platform finally started producing gas in December — just in time for unusually frigid temperatures to drive up demand in the northeastern United States for the home-heating fuel.

However, the offshore platform, 250 kilometres southeast of Halifax, is not among the half dozen core areas where Encana is focused, leading to speculation it could be sold.

"As we sit here right now, we're not marketing Panuke," Suttles told reporters following his first annual meeting as Encana's boss.

Gas from Deep Panuke fetched average prices above US$19 per 1,000 cubic feet during the three months of the year. Company-wide, Encana realized gas prices of $5.82 during that period.

"Boy, Panuke rocked in the first quarter," the third-generation Texas oilman told a shareholder inquiring about a potential Deep Panuke sale.

"Today, our focus on Panuke is to get it to deliver at the highest levels possible."

Encana benefited from selling output from Deep Panuke into the daily spot market during the unusually cold winter in the U.S. Northeast, rather than entering into monthly contracts to sell it at a set price.

Deep Panuke prices should, however, more closely follow New York Mercantile Exchange pricing during the summer. In the first quarter, NYMEX natural gas prices averaged $4.94, and they've since dropped.

Encana sees natural gas prices in North America as a whole hovering between $4 and $5 per 1,000 cubic feet long term, said Renee Zemljak, executive vice-president of midstream, marketing and fundamentals.

Earlier Tuesday, Encana announced a boost in its 2014 cash flow projections and profits.

The Calgary-based oil and gas producer (TSX:ECA) is expecting total cash flow to come in at between $2.9 billion and $3 billion for 2014, up from its previous target between $2.4 billion and $2.5 billion.

The change reflects stronger natural gas prices during the first quarter and the sale of natural gas properties in Wyoming that closed Monday.

It does not, however, include the sale of Encana's East Texas gas lands, the upcoming initial public offering of its PrairieSky royalty spinoff or its acquisition of oil-rich properties in the Eagle Ford shale in Texas. A further update to Encana's 2014 guidance is expected once those transactions close in the second quarter.

Net earnings, which account for one-time items, were $116 million, or 16 cents per share, compared to a net loss of $431 million or 59 cents per share a year earlier.

First-quarter operating earnings totalled $515 million, up from $179 million year earlier. On a per-share basis, that amounted to 70 cents per share, well above the 55 cents per share analysts surveyed by Thomson Reuters had on average been expecting.

Revenue totalled $1.89 billion compared with $1.06 billion year-over-year.

Encana announced last week that it was spending $3.1 billion to enter the oil-rich Eagle Ford shale in Texas.

Building on the newly acquired Eagle Ford position is a possibility, but Encana is in no rush to do it, Suttles said.

"I can tell you our focus is not on maximizing production, but it's on maximizing value and it's about how can we get the best performance out of the existing base production and how can we get the best potential from the development opportunities that exist there," said Suttles.

But if the right opportunity comes up to grow Encana's Eagle Ford footprint, the company has the ability to pounce, Suttles said.

"I think we've shown we can be opportunistic. We have the financial strength to do that and I think we have the organizational capability to act quickly," he said.

Follow @LaurenKrugel on Twitter

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Sudden Surge: Flood of 2014
Opportunity Magazine — The Bakken
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates