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Replies to post #68 on Encana Corporation (ECA)
04/28/11 7:57 PM
These are the kinds of numbers that draw attention of major players and perhaps it was no surprise that Encana Corp. (ECA) came out the very next day and revealed itself as the mystery buyer of all those Duvernay rights, spending $300 million on land acquisition in the first quarter alone.
For a company like Encana — North America’s second-largest gas producer, the shift into liquids is a no-brainer after the haircut they took in the first quarter. As one of the most gas-levered companies on the planet, they have to do something.
And one look at the company’s first quarter results tells the story: it barely broke even in the first three months of the year (thanks to effective hedging) compared to a $1.5 billion profit in the same period a year ago. They’re basically giving the gas away for free.
Encana CEO Randy Eresman admitted as much at the company’s annual meeting in Calgary last week when he suggested the company could give away the gas and still make money on the liquids.
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