Sale helps Encana’s shift from gas

Article Excerpt

ENCANA CORP. $15 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 956.3 million; Market cap: $14.3 billion; Price-to-sales ratio: 3.2; Dividend yield: 0.5%; TSINetwork Rating: Average; www.encana.com) has agreed to sell its shale oil properties in the San Juan Basin in northern New Mexico. In 2017, those wells produced an average of 5,400 barrels a day. To put that in context, Encana produced 337,900 barrels (54% gas, 46% oil) a day in the second quarter of 2018. The company will receive $480 million U.S. when it completes the transaction later this year. Encana will probably use the cash to expand production at its four key properties: Montney (B.C.), Duvernay (Alberta), and Eagle Ford and Permian (both in Texas). In addition to natural gas, these fields produce large amounts of oil and natural gas liquids such as propane and butane. At the same time, the company continues to improve its efficiency. As a result, its cash flow per share will likely rise to $1.85…

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