Lower gas prices prompt spending cut

Article Excerpt

ENCANA CORP. $29 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $21.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.8%; TSINetwork Rating: Average; www.encana.com) continues to cut its capital spending in response to low natural-gas prices. Gas prices have suffered because new drilling technologies have made it easier to extract gas from shale rock and other unconventional sources. That has increased gas supplies. In 2010, Encana had planned to spend $5 billion to explore and develop its properties (all amounts except share price and market cap in U.S. dollars). However, it later cut that to $4.8 billion. The company will probably spend between $4.0 billion and $4.5 billion in 2011, but it can quickly raise spending and boost production if gas prices improve. Encana is a buy. buy…

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