Encana says dividend to be cut by about 78 per cent in 2016

CALGARY -- Encana Corp. (TSX:ECA) says next year's capital spending budget will be US$600 million lower than in 2015 and its dividend to shareholders will be cut by about 78 per cent.

See Full Article

The Calgary-based oil and gas producer is estimating a total capital investment of between US$1.5 billion and US$1.7 billion in 2016.

The company said Monday about half the capital spending will be in the Permian formation in the southern United States, one of its four core areas. It's also focused on the Eagle Ford play in Texas and the Montney and Duverney plays in Western Canada.

Encana's quarterly dividend will be cut to 1.5 cents per share, or six cents on an annualized basis -- from seven cents per quarter or 28 cents annually -- reducing the company's payout to shareholders by $185 million per year.

It's aiming to reduce corporate costs by 10 per cent compared with 2015 and a cut in drilling and completion costs by 10 to 15 per cent.

Encana president and CEO Doug Suttles said a strategic shift begun by Encana in 2013 has resulted in a more focused portfolio of assets that will deliver higher margins on every dollar of capital investment.

"We will continue to deliver strong margin growth through 2016 by directing the majority of our capital to drilling and completions activity in our core four assets," Suttles said in a statement.

"This will maintain their scale and position the company to grow long-term shareholder value and cash flow into 2017 and beyond."

The announcement by one of Canada's largest oil and gas producers came as crude futures traded below US$35 a barrel, a level not seen since early 2009 during the deep global recession.

The company's announcement also followed a landmark weekend agreement between nearly 200 countries, which have committed to reduce global greenhouse gas emissions, including from oil and gas, starting in 2020.

Encana is assuming West Texas Intermediate crude -- a North American benchmark -- at US$50 a barrel in 2016. As of Monday, it had fixed-price contracts to sell 48,000 barrels per day at $58.85 per barrel.

It also has price protections on a further 18,000 barrels per day of oil and 395 million cubic feet per day of gas, all above current futures prices.

Production from its four core areas will increase by 12 per cent compared with 2015, to the equivalent of between 260,000 and 280,000 barrels per day -- including crude, natural gas and natural gas liquids, Encana said.

The four core areas are expected to represent 75 per cent of Encana's total production, which is estimated at between 340,000 and 370,000 oil-equivalent barrels per day in 2016.



Advertisements

Latest Economic News

  • Canada's biggest pulse market in doubt after India rejects extending exemption

    Economic CTV News
    CALGARY -- Canada's top export market for its multi-billion-dollar pea and lentil crops industry is in doubt after India rejected extending a long-standing exemption on pest treatments. Federal Agriculture Minister spokesman Guy Gallant confirmed the Indian government has not granted another six-month exemption that would have crops fumigated on arrival, rather than before export, as has been allowed for more than a decade. Source
  • Australia's highest-paid public servant quits $4.3M job

    Economic CTV News
    CANBERRA, Australia -- Australia's highest-paid public servant announced his resignation Thursday, two weeks after the revelation that he made 5.6 million Australian dollars ($4.3 million) last year sparked a public furor and created a political headache for the government. Source
  • Lessons the tooth fairy can't teach: Allowances can help kids learn financial savvy

    Economic CBC News
    Robin Taub paid her two kids a weekly sum when they were younger in an effort to help teach them basic money skills. Now, they're living away from home at university, managing a budget, and friends tease them for being money-smart kids, she says — a riff on the title of her book, A Parent's Guide to Raising Money-Smart Kids. Source
  • More than 2M knives recalled after reports of blades breaking, injuries

    Economic CTV News
    The kitchenware company Calphalon Contemporary Cutlery is recalling more than two million knives and knife sets in Canada and the United States after reports of blades breaking during normal use or when they are dropped, posing a risk of lacerations. Source
  • Conference Board sees modest economic growth in 2017

    Economic CBC News
    The national economy should seen see a slight pick-up this year, the Conference Board of Canada said in a new report out Thursday. The independent research group said it sees overall growth of 1.9 per cent this year, up from the 1.3 per cent it expects will be reported for last year. Source
  • Delta Airlines wins right to appeal ruling in complaint involving obese passengers

    Economic CBC News
    The Supreme Court of Canada has allowed Delta Airlines to appeal a ruling involving a complaint by a Nova Scotia man alleging the airline discriminates against obese passengers. The court granted the company's appeal request Thursday. Source
  • SCC to hear appeal involving policy that advocate says discriminates against obese

    Economic CTV News
    OTTAWA -- The Supreme Court of Canada has granted Delta Air Lines leave to appeal a ruling that found a Halifax passenger rights advocate should be able to stand up for obese people even though he isn't overweight himself. Source
  • Trump taps CEOs of 5 job-offshoring firms for input on how to create jobs in America

    Economic CBC News
    President Donald Trump, who has vowed to stop U.S. manufacturing from disappearing overseas, will seek job-creation advice on Thursday from at least five companies that are laying off thousands of workers as they shift production abroad. Source
  • Trump taps CEOs of 5 job-offshoring firms for input on how to create jobs

    Economic CBC News
    President Donald Trump, who has vowed to stop U.S. manufacturing from disappearing overseas, will seek job-creation advice on Thursday from at least five companies that are laying off thousands of workers as they shift production abroad. Source
  • Loblaw fourth-quarter profit up 57% to $201M

    Economic CBC News
    ?Loblaw had $11.13 billion of revenue and a $201 million net profit in the fourth quarter, according to earnings announced Thursday morning. The profit amounted to 50 cents per share. The net profit was up 57 per cent or $73 million from a year earlier, while revenue was up $265 million or 2.4 per cent. Source