Morningstar | ECA Updated Star Rating from 28 Feb 2019
No-moat Encana Corp reported a strong fourth quarter despite the decline in crude prices. The company generated free cash flow of $151 million, which exceeded our expectations due to lower capital spending. Free cash flow was up from negative $92 million in the year-ago quarter and $52 million in the third quarter for the same reasons. Encana reported fourth-quarter production of 403.4 thousand barrels of oil equivalent per day, below our expectations. The lower-than-expected production was driven by a slower ramp-up of the company’s planned drilling production. On a proforma basis, production would have been over 600 mboe/d with the newly acquired Newfield Assets. Encana closed the acquisition on Feb. 13, 2019.On a proforma basis, Encana expects full-year production in the range of 560-600 mboe/d, and the company expects capital expenditures in the range of $2.7 billion-$2.9 billion. These estimates are below our current 2019 forecasts.
We expect to incorporate the company’s fourth-quarter results into our model shortly, but for now, we are maintaining our $6 (CAD 8) fair value estimate and no-moat rating.
Encana is in the business of the exploration for, the development of, and the production and marketing of natural gas, oil and natural gas liquids (NGLs). All of Co.'s reserves and production are located in North America. As at Dec. 31, 2016, total proved developed and undeveloped reserves for natural gas, oil, and NGLs were 2.90 billion cubic ft., 155.6 million barrels (MMbbls), and 150.4 MMbbls, respectively. Co.'s operating and reportable segments are: Canadian Operations, USA Operations, and Market Optimization.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.