Hedging Losses Send EnCana 3Q Profit Sharply Lower

CALGARY, Alberta (AP) — Natural gas and oil producer EnCana Corp. said Thursday profit dropped for the third quarter on lower natural gas prices and significant unrealized hedging losses.

The company reported net income of $25 million, or 3 cents per share, down 99 percent from $3.6 billion, or $4.73 per share a year ago.

The results included hedging losses of $18 million, compared with a $1.8 billion gain on hedging contracts a year ago.

Operating income, which reflects the actual value of hedging contracts when settled, fell 46 percent to $775 million, or $1.03, compared with $1.4 billion, or $1.92 a year ago.

Analysts surveyed by Thomson Reuters estimated $1.17 per share.

Shares fell $1.59, or 2.7 percent, to $56.43 in afternoon trading.

The company said it had shut off or curtailed about 500 million cubic feet per day of natural gas production in the quarter. That will be brought back online, however, during the winter months. Total third-quarter production was about 4.4 billion cubic feet equivalent per day, down 7 percent compared with the same period a year ago.