The Successful Investor Hotline – Friday, February 20, 2009

Article Excerpt

ENCANA CORP., $48.27, Toronto symbol ECA, has agreed to sell the gas from its Deep Panuke offshore development near Nova Scotia to Repsol YPF SA, a Spanish oil-and-gas firm. The Deep Panuke project, worth $550-million (all amounts except share price in U.S. dollars), should begin operating in 2010, and its reserves could last up to 18 years. Locking Repsol in as a buyer helps cut EnCana’s risk. Meanwhile, EnCana earned $4.4 billion before unusual items in 2008, up 7.4% from $4.1 billion the previous year. Earnings per share rose 9.3%, to $5.86 from $5.36 on fewer shares outstanding. Cash flow per share rose 12.8%, to $12.48 from $11.06. A 6% rise in production, plus much higher oil and natural-gas prices in the first half of 2008 were behind the gains. Through hedging contracts, EnCana has locked in prices for two-thirds of its natural gas production for the first ten months of 2009. The average price of $9.13 per thousand cubic feet…