Big expansions will pay off for these two

Article Excerpt

Encana took its present form on December 1,2009, after the old EnCana Corp. split itself into twonew companies: the new Encana, which focuses onnatural gas, and Cenovus Energy, which specializesin oil sands. Falling gas prices have pushedEncana’s shares down by about 34% since the split.Oil prices have weakened lately, but Cenovus’s stockis still up about 22%.ENCANA CORP. $19.34 (Toronto symbol ECA;Shares outstanding: 735.4 million; Market cap: $14.2billion; TSINetwork Rating: Average; Dividendyield: 4.1%; www.encana.com) is one of NorthAmerica’s largest natural gas producers. Its provenreserves should last over 14 years.In the three months ended September 30, 2012,Encana’s cash flow per share fell 22.5%, to $1.24from $1.60 a year earlier (all amounts except shareprice and market cap in U.S. dollars).Natural gas accounts for 95% of Encana’s production.In response to falling gas prices, the companylowered its output during the quarter; this was themain reason for the lower cash flow.Encana has formed a joint venture with Petro-China, which is controlled by the Chinese government,to develop…