The Successful Investor Hotline – Friday, November 8, 2013

Article Excerpt

ENCANA CORP., $19.21, Toronto symbol ECA, rose 3% this week, even though it cut its dividend as part of a major new restructuring plan. Due to depressed natural gas prices, Encana plans to narrow its focus from around 30 properties to five: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and Tuscaloosa Marine Shale (Louisiana). These fields also produce significant amounts of oil and natural gas liquids (NGLs), such as butane and propane, and should last decades. Encana expects oil and NGLs to supply 75% of its cash flow by 2017, up from about 35% today. In addition, Encana will transfer its Clearwater oil and gas properties in southern Alberta, which total 5.2 million acres, to a new company. In the third quarter of 2013, these properties accounted for 12% of Encana’s daily gas production and 17% of its oil output. Encana plans to sell shares in this new firm to the public in mid-2014, but it will…