Energy producer Encana Corp. announced on Wednesday, January 4, 2017 that company’s results in 2017 will top its predictions released just a few months ago as the company continues to cut costs and boost oil and gas production volumes.
The Calgary-based energy giant announced it predicts a profit margin of $10 (U.S) per barrel of oil equivalent in 2017, up from the $8 a barrel it revealed during an investor day in October. The surge is a result of lower-than-predicted costs and raised volumes this year.
Meanwhile Encana, has find it hard with high debt levels and the sharp plunge in commodity prices that started in the last half of 2014. But on Wednesday Encana announced it had already hit its projected 2017 operational activity and rig count levels in December. That progress is part of the company’s plan to surge production by almost 60 per cent between 2016 and 2021, while plummeting costs and rising its cash flow.
Furthermore Company’s profit-margin predictions are based on price expectations of $55 a barrel for West Texas intermediate crude, and $3 per million British thermal units for benchmark North American natural gas.
Company’s chief executive Doug Suttles turned the focus of Encana from natural gas to more oil-related plays, such as the Eagle Ford basin.
At the moment, much of the company’s emphasis has turned to its assets in the Permian basin, the Texas and New Mexico play is a low-cost and productive area for many producers despite the crude price slump.
Encana also said during announcement that it expects production growth from its four core assets, which also comprise the Duvernay in Alberta will be in the upper range of, or exceed, its previously directed growth estimation of 15% to 20% from the fourth quarter of 2016 to the end of this year.