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Bloomberg: EnCana’s Fourth-Quarter Net Income Falls 72% to $663 Million

By Ian McKinnon

Feb. 15 (Bloomberg) — EnCana Corp., Canada’s largest natural-gas producer, said fourth-quarter profit plunged 72 percent on lower gas prices and a smaller gain from assets sales than a year earlier.

Net income fell to $663 million, or 82 cents a share, from $2.37 billion, or $2.71, a year earlier, the Calgary-based company said today in a statement distributed on PR Newswire. Sales after royalties fell 38 percent to $3.68 billion.

Chief Executive Officer Randy Eresman, 48, is selling assets to focus on production from North American gas wells and oil- sands projects in northern Alberta. An oil-sands venture with ConocoPhillips that started in January added refining to the company’s production business.

EnCana was expected to earn 88 cents a share, the average of 15 analyst estimates compiled by Bloomberg.

The results included a gain of $21 million from asset sales, compared with a gain of $370 million a year earlier from the sale of EnCana’s natural-gas-liquids business to Provident Energy Trust for C$697 million ($604 million).

EnCana joined Shell Canada Ltd., Imperial Oil Ltd. and Petro-Canada in reporting lower profit because of tumbling gas prices.

Fourth-quarter gas sales rose 2.4 percent to 3.41 billion cubic feet a day. The company’s North American gas sold for $5.79 per thousand cubic feet, before hedging, a drop of 44 percent from a year earlier. Gas prices plunged last year after mild winter weather left an abundance of the heating fuel in storage in North America.

Oil Sales

Fourth-quarter sales of oil and gas liquids fell 34 percent to 152,154 barrels a day. EnCana said its crude-oil and gas- liquids output in North America sold for $38.69 a barrel in the quarter, a gain of 4.1 percent from a year earlier.

EnCana and Houston-based ConocoPhillips agreed last year to spend $10.7 billion to produce and refine oil from Alberta’s tar- like oil sands.

The partners in October said they plan to spend $5.4 billion over 10 years to boost production from EnCana’s Foster Creek and Christina Lake projects in Alberta to about 400,000 barrels a day. Another $5.3 billion will be spent to expand refineries in Illinois and Texas owned by ConocoPhillips, the second-biggest U.S. refiner, to process the extra-heavy crude oil.

The statement was released before the start of regular trading on North American stock markets. EnCana’s shares yesterday fell 9 cents to C$57.25 on the Toronto Stock Exchange. The stock, which 13 buy recommendations from analysts, 11 holds and five sells, has gained 6.7 percent this year.

(EnCana will hold an earnings conference call at 1 p.m. New York time. To listen, dial +1-877-704-5384 or go to the company’s Web site, http://www.encana.com .)

To contact the reporter on this story: Ian McKinnon in Calgary [email protected] .
Last Updated: February 15, 2007 06:29 EST

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