Encana (ECA) Q2 Earnings Crush Estimates On Cost Control
Zacks Investment Research | Jul 20, 2016 11:17PM ET
Calgary, Alberta-based Encana Corp. (NYSE:ECA) reported operating earnings per share of 10 cents, contrary to the Zacks Consensus Estimate for a loss of 8 cents. In the year-ago quarter, the company incurred operating loss of 20 cents per share. The outperformance came on the back of successful cost containment efforts.
However, quarterly revenues (net of royalties) – at $364 million – came significantly below the Zacks Consensus Estimate of $775 million on sharply lower natural gas prices and volumes.
Moreover, the top line plunged 56% from the prior-year figure of $830 million.
Production & Prices
In the second quarter, natural gas production declined 10% year over year to 1,418 million cubic feet per day (MMcf/d). Encana's realized natural gas prices were $1.86 per thousand cubic feet, almost halving from the year-ago quarter level of $3.52.
The company's oil and liquids production rose 4% year over year to 132,000 barrels per day on strong contribution from the Montney, Duvernay, Eagle Ford and Permian shale plays. Encana sold liquids at $38.47 per barrel, down from $43.78 per barrel during the second quarter of 2015.
Cash Costs
Encana reported operating costs of $135 million for the reported quarter, 32% lower than the year-ago quarter level. Meanwhile, transportation and processing expenses fell 18% to $244 million.
Cash Flows
Encana generated cash flows from operations of $182 million or 21 cents per share, literally unchanged from the $181 million or 22 cents per share in the second quarter of 2015.
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