CALGARY — Higher production of more profitable products in the second quarter allowed oil and gas producer Encana Corp. (TSX:ECA) to handily beat analyst expectations while posting a US$331-million net profit.
"Our core assets have returned to growth, delivering our planned mid-year production bounce ahead of schedule," said CEO Doug Suttles on a conference call Friday.
"We continue to enhance well productivity across the portfolio and, as a result, we now expect the core assets will deliver 25 to 30 per cent growth in the fourth quarter of 2017 as compared with the fourth quarter of 2016."
The Calgary-based oil and gas company, which presents its results in U.S. dollars, reported Friday net earnings per share of 34 cents, compared with a loss of US$601 million, or 71 cents per share, in the same period last year.
Its operating earnings were 18 cents per share, well ahead of analysts’ average estimate of four cents, according to Thomson Reuters.
Encana has sold non-core assets over the past four years to reduce debt, with the result that production has fallen from 528,000 barrels of oil equivalent per day in 2012 to 353,000 boe/d last year.
Its updated guidance shows that overall production this year is expected to average about 315,000 boe/d as growth in its core four production areas — the Montney and Duvernay in Western Canada and the Eagle Ford and Permian in the United States — is offset by the sale of assets in Colorado and Louisiana that would have contributed about 18,000 boe/d.
Encana said it produced about 316,000 boe/d in the three months ended June 30, slightly above analyst predictions, of which about 40 per cent was higher value liquid hydrocarbons like oil and condensate and 60 per cent was less profitable natural gas.
In the same quarter last year, its production of 368,000 boe/d was weighted 64 per cent to gas.
The company expects to increase its oil and liquids ratio to about 41 per cent by the end of 2017.
Encana said it would leave its 2017 capital budget at between $1.6 billion and $1.8 billion despite recent oil price volatility.
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Dan Healing, The Canadian Press
Note to readers: This is a corrected story. An earlier version said Encana's annual shareholder meeting would be held today, but it was on May 2.