EnCana 1Q Profit Surges On Low Costs, Hedging Gain

THE ASSOCIATED PRESS

Canada's top oil and gas producer EnCana Corp. on Wednesday said its first-quarter profit surged as operating costs sharply fell and the company benefited from an inventory hedging gain.

Quarterly earnings jumped to $962 million, or $1.28 per share, from 93 million, or 12 cents per share, during the same period last year.

EnCana's profit surge was bolstered by a nonrecurring $89 million hedging gain, compared with a hedging-related loss of $737 million in the first quarter of 2008.

The company also said operating and administrative costs for the quarter decreased about 31 percent compared with the same period last year due to a weaker Canadian dollar, lower fuel prices and lower long-term incentive costs.

"Substantially reduced field activity across North America is starting to result in lower supply and services pricing and, by the end of 2009, we anticipate price reductions could reach more than 20 percent from 2008 average costs, if current trends continue," said EnCana's chief executive, Randy Eresman.

Revenue slid 15 percent to $4.61 billion, down from $5.43 billion in the prior-year period. Cash flow for the quarter fell 18 percent to $1.9 billion compared to the first quarter of 2008.

EnCana shares rose $1, or 2.3 percent, to $43.94 in Wednesday morning trading.