We still prefer Cenovus over Encana

Article Excerpt

Both crude oil and natural gas prices have moved up since the start of 2018. Still, we feel U.S. sanctions on Iranian oil will further lift oil prices. At the same time, rising North American production of shale natural gas should hurt overall gas prices. Due to those factors, we prefer oil companies like Cenovus over gas producers like Encana. ENCANA CORP. $17 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 956.3 million; Market cap: $16.3 billion; Price-to-sales ratio: 3.7; Dividend yield: 0.5%; TSINetwork Rating: Average; www.encana.com) continues 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. In the quarter ended June 30, 2018, Encana produced 337,900 barrels (54% gas, 46% oil) a day, up 6.9%, from 316,000 barrels a year earlier. The company also continues to benefit from rising…

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