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EnCana generates 2008 cash flow of US$9.4 billion |
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Written by REM
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CALGARY, AB - EnCana Corporation announced recently that it achieved solid increases in 2008 cash flow and operating earnings as a result of strong growth in natural gas and oil production and higher prices. Financial results were enhanced in the fourth quarter by EnCana's favourable natural gas price hedges. Again in 2008, EnCana achieved strong year-over-year proved reserves additions.
"Despite the unprecedented volatility in oil and natural gas prices and a challenging operating environment in 2008, EnCana delivered strong operational and financial performance. We met or exceeded all of our targets, including those for cash flow, production and capital investment. Overall production grew 6 percent, driven by our key resource plays which increased 13 percent year-over-year. We added reserves of 2.5 trillion cubic feet of gas equivalent, replacing 150 percent of production at a very competitive finding and development cost of US$2.50 per thousand cubic feet of gas equivalent," said Randy Eresman, EnCana's President & Chief Executive Officer.
"EnCana is pursuing a conservative and prudent capital program in 2009 and we have built flexibility into our plans to adjust investment depending on how the year unfolds. With widespread economic uncertainty, we remain intently focused on our core business objectives: maintaining financial strength, generating significant free cash flow, further optimizing our capital investments and continuing to pay a stable dividend to shareholders - currently $1.60 per share annualized, which at the current share price results in a yield of about 3.7 percent.
"Natural gas and oil prices are expected to remain low at least through the first quarter of 2009. While we have seen some indication of a softening in service and supply costs, reductions are likely to be more pronounced in
the latter half of 2009. We are affirming our 2009 corporate guidance. Our cash flow forecast for the year is underpinned by strong hedges - about two-thirds of expected natural gas production hedged through October 2009 at an average price of $9.13 per thousand cubic feet, well above the current spot price. In addition, we are continually seeking new ways to strengthen our financial position, including cost-reduction initiatives, project reviews throughout the year and exploring and implementing operational efficiencies across our company.
"EnCana's low-risk, low-cost resource play business model provides financial resilience and positions the company very well for dealing with the economic downturn. We can apply an even higher level of scrutiny and fine tune investments in order to target optimal project returns and long-term value creation," Eresman said.
For more information visit www.encana.com.
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