CALGARY – Calgary-based Encana Corp. (TSX:ECA) reported Tuesday a US$379-million net loss for the first quarter mainly due to writedowns and lower oil and gas prices as revenue fell 40 per cent compared with the same time last year.
A year ago, the oil and gas producer had a US$1.71-billion loss, also mainly due to asset writedowns.
The company, which reports in U.S. dollars, also said it is taking a $31-million restructuring charge to account for a 20 per cent reduction in its workforce in March.
Revenue after royalty payments fell to $753 million for the three months ended March 31, down from $1.25 billion in the same period last year. Analysts had estimated about $657 million of revenue, according to Thomson Reuters.
On a conference call with analysts, CEO Doug Suttles returned again and again to the positive side of the downturn, noting that drilling and well completion costs in Encana’s four core regions were between 22 per cent and 44 per cent lower in the first quarter than in 2015 due to performance improvements and reduced oilfield service costs.
“It’s a tough environment out there for absolutely everybody and everyone, if you will, is doing their part to make sure that North America is competitive,” he said. “I think you are seeing that in these results.”
He said the most recent round of job cuts, which dropped Encana’s head count to about 1,600 or half of what it was in 2013, was planned so that the company can begin growing again when commodity prices strengthen.
Encana’s cash flow, a measure of its ability to reinvest, fell to $102 million from $383 million on lower oil and gas prices.
Encana reported oil and natural gas liquids production rose eight per cent to 130,800 barrels of oil equivalent per day in the first quarter compared to the year-earlier period. Natural gas output fell 18 per cent to 1.5 billion cubic feet per day, with almost all of the shortfall in Canada.
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