CALGARY, Alberta, March 16 (Reuters) - EnCana Corp , Canada's No. 1 natural gas producer, said on Tuesday it will boost its 2010 capital budget by 20 percent to $4.5 billion as it takes step to double production over the next five years.
The company, which last year spun off its northern Alberta oil sands operations into Cenovus Energy Inc to focus on developing its shale gas and other holdings, said it expects its production at the end of 2010 to be between 3.4 billion and 3.5 billion cubic feet of natural gas per day. That's up from the 3.1 bcf per day it averaged at the end of January.
EnCana, which operates exclusively in North America, said it has proved reserves of 12.8 trillion cubic feet of gas on its 12.7 million acres of exploration lands, and could have another 16 tcf recoverable on its holdings.
But the company expects natural gas prices, with the benchmark futures contract currently at about $4.37 per million British thermal units, to average between $6 and $7 per thousand cubic feet long term. It said it can produce gas for under $4 per mcf.
'The greatest value proposition for our shareholders is to deliver a sustainably higher growth rate going forward,' Randy Eresman, EnCana's chief executive, said in a statement. 'We are so convinced of our potential, in fact, that we have set the goal of doubling Encana's production over the next five years.'
The company expects much of the production growth to come from its shale gas holdings in the Haynesville region of Louisiana and British Columbia's Horn River play, along with the so-called tight gas area in the Montney region of British Columbia.
In its 2010 forecast released on Tuesday, the company said it expects cash flow per share of between $5.85 and $6.40 this year.
EnCana shares were down 26 Canadian cents, or 0.8 percent, at C$33.69 at midmorning on Tuesday on the Toronto Stock Exchange.
($1=$1.02 Canadian)
(Reporting by Scott Haggett; editing by Peter Galloway) Keywords: ENCANA/ (scott.haggett@thomsonreuters.com; Reuters Messaging: scott.haggett.reuters.com@reuters.net; +1 403 531-1622) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The company, which last year spun off its northern Alberta oil sands operations into Cenovus Energy Inc to focus on developing its shale gas and other holdings, said it expects its production at the end of 2010 to be between 3.4 billion and 3.5 billion cubic feet of natural gas per day. That's up from the 3.1 bcf per day it averaged at the end of January.
EnCana, which operates exclusively in North America, said it has proved reserves of 12.8 trillion cubic feet of gas on its 12.7 million acres of exploration lands, and could have another 16 tcf recoverable on its holdings.
But the company expects natural gas prices, with the benchmark futures contract currently at about $4.37 per million British thermal units, to average between $6 and $7 per thousand cubic feet long term. It said it can produce gas for under $4 per mcf.
'The greatest value proposition for our shareholders is to deliver a sustainably higher growth rate going forward,' Randy Eresman, EnCana's chief executive, said in a statement. 'We are so convinced of our potential, in fact, that we have set the goal of doubling Encana's production over the next five years.'
The company expects much of the production growth to come from its shale gas holdings in the Haynesville region of Louisiana and British Columbia's Horn River play, along with the so-called tight gas area in the Montney region of British Columbia.
In its 2010 forecast released on Tuesday, the company said it expects cash flow per share of between $5.85 and $6.40 this year.
EnCana shares were down 26 Canadian cents, or 0.8 percent, at C$33.69 at midmorning on Tuesday on the Toronto Stock Exchange.
($1=$1.02 Canadian)
(Reporting by Scott Haggett; editing by Peter Galloway) Keywords: ENCANA/ (scott.haggett@thomsonreuters.com; Reuters Messaging: scott.haggett.reuters.com@reuters.net; +1 403 531-1622) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.