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Energy Summary for Nov. 12, 2015

2015-11-12 17:42 ET - Market Summary

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by Stockwatch Business Reporter

West Texas Intermediate crude for December delivery lost $1.18 to $41.75 on the New York Merc, while Brent for December lost $1.75 to $44.06 (all figures in this para U.S.). Western Canadian Select traded at a discount of $14.65 to WTI ($27.10), unchanged. Natural gas for December lost 0.3 cent to $2.26. The TSX energy index lost 3.99 points to close at 173.71.

Clayton Woitas's EnCana Corp. (ECA) added 18 cents to $10.07 on 11.3 million shares, after releasing its third quarter financials. As has become usual this year, it reported a massive impairment charge that led a to a billion-plus-dollar net loss. This quarter, the impairment charge was $1.1-billion (U.S.), bringing the total year-to-date impairment charges to $3.6-billion (U.S.). The quarterly loss was $1.23-billion (U.S.) and the year-to-date loss is $4.6-billion (U.S.). Operationally, the picture is a little more pleasant. Third quarter production came to 398,300 barrels of oil equivalent a day, in line with analysts' predictions of 397,000, while cash flow came to 44 U.S. cents a share, exceeding predictions of 39 U.S. cents a share. Of that production, 249,300 barrels a day came from EnCana's four core plays, the Duvernay and the Montney in Canada and the Permian and the Eagle Ford in the United States. These four plays are expected to contribute 270,000 barrels a day in the fourth quarter. President and chief executive officer Doug Suttles said during a conference call this morning that this plan is on track, although he cautioned that "ongoing third party transportation restrictions" in the Montney are a risk. The play that got the most attention during the call was the Permian. Although EnCana has been in the Permian for just 10 months, it is already a "top-tier" operator in terms of costs, drilling times and production, boasted management. For that reason, EnCana has decided to speed up its activity in the play and will spend an extra $150-million (U.S.) this year that would otherwise have been spent next year. Meanwhile, some investment plans in the Alberta Duvernay are being deferred. EnCana had been considering whether to build a new gas plant, but now says it will wait until the Alberta government has finished its royalty review. "It will mean the growth will be a little slower," said Mr. Suttles. He declined to provide specific production guidance for any of the plays, aside from the 270,000-barrel-a-day target for the fourth quarter of 2015, but did say that he'd "like to make sure we at least maintain that [270,000 barrels a day]" in 2016.

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