Encana Boosts 2015 Spending Plan as it Cuts Oil Price ForecastTina Davis
Encana Corp. announced plans to increase spending next year, even as it lowered its forecast for oil prices and cash flow.
Capital investment for 2015 will be $2.7 billion to $2.9 billion, up from this year’s $2.5 billion to $2.6 billion. Encana said it’s assuming West Texas Intermediate crude oil prices would average $70 a barrel next year, down from a $95 forecast issued last month.
Other oil producers are cutting back spending as prices reach five-year lows. ConocoPhillips said this month it would cut spending 20 percent next year. WTI fell below $55 a barrel today, as prices were set for the biggest annual drop since 2008.
About 80 percent of Encana’s spending will go to four areas -- the Montney, Duvernay, Eagle Ford and Permian, the Calgary-based company said in a statement today. Those assets are able to deliver returns when prices are low because costs average the equivalent of $35 to $55 a barrel of oil.
Total cash flow is expected to drop to $2.5 billion to $2.7 billion next year from a forecast of $3.2 billion to $3.3 billion in 2014, the company said.
Link to Statement:Link