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

  • Sask. premier invites Calgary energy companies to move to Saskatchewan

    Economic CBC News
    Saskatchewan Premier Brad Wall is taking a turf war with Alberta to its economic heart, inviting energy companies based in Calgary to move their headquarters to his province. In a letter to Whitecap Resources, Wall offers to subsidize relocation costs, trim taxes and royalties and help find space in unused government buildings if the oil and gas firm moves to Saskatchewan. Source
  • Etihad to lend U.S.-bound passengers iPads as ban workaround

    Economic CTV News
    DUBAI, United Arab Emirates -- One Mideast airline affected by the ban on most electronics in the cabins of U.S.-bound flights will lend iPads to its top-paying travellers. Etihad Airways said on Wednesday that it will offer the tablets to U.S. Source
  • Bombardier senior execs earned nearly 50 per cent more in 2016

    Economic CTV News
    MONTREAL - Bombardier's senior executives saw their compensation rise by nearly 50 per cent last year at a time when it laid off thousands of workers, sought government aid and saw the first CSeries passenger jet take flight. Source
  • Fact check: U.S. President Trump didn't get luxury-model Air Force One

    Economic CTV News
    KIRKLAND, Wash. -- A widely shared story that claims to include photos of a recently delivered plane that will serve as Air Force One for U.S. President Donald Trump is false. The pictures included in the story do not show the presidential plane and are conceptual renderings from an outfitter of luxury aircraft. Source
  • Manulife picks head of its Asia division as president

    Economic CTV News
    TORONTO - A relative newcomer to the senior ranks of Manulife Financial Corp. (TSX:MFC) has been picked to be the insurer's president, responsible for its global operations including Canada. Roy Gori, who joined the Canadian life insurance and wealth management company in early 2015, has been responsible for Manulife's Asia division. Source
  • Toshiba says Westinghouse files for bankruptcy protection

    Economic CTV News
    TOKYO -- Japan's embattled Toshiba Corp. said Wednesday that its U.S. nuclear unit Westinghouse Electric Co. has filed for bankruptcy protection, marking a key step in its struggles to stop the flow of massive red ink. Source
  • Ford recalls 440,000 vehicles for fire risk, door latch trouble

    Economic CBC News
    The Ford Fusion V6 Sport is seen in this promotional image. (Ford) Ford is recalling more than 440,000 vehicles in North America including more than 20,000 in Canada to fix problems that can cause engine fires and doors to open unexpectedly. Source
  • Ford recalls 440K vehicles for fire risk, door latch trouble

    Economic CTV News
    DETROIT -- Ford is recalling more than 440,000 vehicles in North America to fix problems that can cause engine fires and doors to open unexpectedly. The first recall covers over 230,000 Escape SUVs, Fiesta ST subcompacts, Fusion midsize cars and Transit Connect vans with 1.6-litre turbocharged engines from 2013 through 2015. Source
  • Ford recalls more than 570K vehicles for fire risk, door latch trouble

    Economic CTV News
    DETROIT -- Ford is recalling more than 570,000 vehicles in North America and Europe to fix separate problems that can cause engine fires and doors to fly open unexpectedly. The recalls will hit the company's bottom line in the first quarter of this year. Source
  • Ford recalls 570K vehicles for fire risk, door latch trouble

    Economic CTV News
    DETROIT -- Ford is recalling more than 570,000 vehicles in North America and Europe to fix separate problems that can cause engine fires and doors to fly open unexpectedly. The recalls will hit the company's bottom line in the first quarter of this year. Source