Encana Rises After Signaling Possible Asset Sales: Calgary MoverRebecca Penty
Encana Corp., Canada’s largest natural gas producer, rose the most in three months after signaling potential asset sales in a strategy update.
Encana climbed 3.8 percent to C$18.61 at 4 p.m. in Toronto, the steepest increase since May 21.
“Encana has more inventory in its portfolio of plays, particularly dry natural gas, than can be optimally developed,” the Calgary-based company said today in a statement.
Encana focused on developing oil and petroleum liquids after North American gas prices fell to a decade-low last year.
“A press release wakes people up” to Encana’s restructuring to become a larger producer of higher-priced liquids, Dirk Lever, an analyst at Altacorp Capital Inc. in Calgary, said in a phone interview today. “It’s under-owned by institutions and it doesn’t take much to move this stock.”
Greg Pardy, an analyst with Royal Bank of Canada, changed his recommendation on Encana to the equivalent of a buy today. Encana is ahead of its target to change its strategy by the end of the year, Pardy said in a note to clients. The stock has eight buy, 12 hold and six sell recommendations from analysts.
“We have too many assets today, more than we need, and we’re investing in way too many and we’ll have to clean that part of the portfolio up,” Encana Chief Executive Officer Doug Suttles said today at a conference in New York.
Suttles estimated North American gas prices will be “range-bound” between $3.50 per million British thermal units and $4.50 in the next few years.