EnCana Corporation (ECA)
Q2 2010 Earnings Call
July 21, 2010 1:00 AM ET
Ryder McRitchie – Vice President of Investor Relations
Michael M. Graham – Executive Vice President and President of our Canadian Division
Jeff E. Wojahn – Executive Vice President and President of our U.S Division
Sherri Brillon – Chief Financial Officer
Andrew Fairbanks - Bank of America
Greg Pardy – RBC Capital Market
Mark Gilman – Benchmark Company
Bob Morris - Citigroup
Brian Singer - Goldman Sachs
Chris Theal – Macquarie Securities
George Toriola – UBS
Dan Healing – the Calgary
Previous Statements by ECA
» EnCana Corporation Q1 2010 Earnings Call Transcript
» EnCana Corporation Q4 2009 Earnings Call Transcript
» EnCana Corporation Q3 2009 Earnings Call Transcript
Good day ladies and gentlemen and thank you for standing by. Welcome to EnCana Corporation's Second quarter 2010 results conference call. (Operator instructions)
Please be advised that this conference call may not be recorded or rebroadcast without the express consent of the EnCana Corporation. I would now like to turn the conference call over to Mr. Ryder McRitchie, Vice President of Investor Relations. Please go ahead, Mr. McRitchie.
Thank you, operator and welcome everyone to our discussion of EnCana’s 2010 second quarter results. Before we get started, I must refer you to the advisory on forward-looking statements contained in the news release as well as the advisory on page 49 of EnCana’s Annual Information Form dated February 18th, 2010. The latter of which is available on SEDAR. I'd like to draw your attention in particular to the material factors and assumptions in those advisories. In addition, I want to remind everyone that EnCana reports its financial results in US dollars and operating results according to US protocols, which means that production volumes and reserve, and resource amounts are reported on an after royalties basis. Accordingly, any reference to dollars, reserves, resources, or production information in this call will be in US dollars and US protocols unless otherwise noted.
To provide a clear understanding of the new post-split EnCana, the prior period comparative information discussed in this conference call represents EnCana’s financial and operating results on a pro forma basis. In this pro forma presentation, the results associated with the assets and operations transferred to Synovus Energy are eliminated from the EnCana consolidated results and adjustment specific to this split transaction are removed.
Financial information that reconcile EnCana consolidated financial statement and perform a financial statement can be found in EnCana news release dated July 21
2010 available on our website Randall mean while start of with the highlights of our operating results. Michael Graham Executive Vice President and President of our Canadian Division and Jeff E. Wojahn, Executive Vice President and President of our U.S Division well then I need to speak to there areas before turning the call over to Sherri Brillon EnCana’s Chief Financial Officer to discussed EnCana’s financial performance. Following some closing comments from Randall our leadership team will then be available for question. I will now turn the call over to Randall Eresman, EnCana’s President and CEO.
Randall K. Eresman
Thank you (Inaudible) and thank you everyone for joining us today. Today’s call were highlight EnCana firm during the second quarter of 2010 we’re now to mid point of the year and we pleased with our result date. EnCana’s second quarter 2010 results were up solid cash flows $1 2 billion or $65 per common share diluted an operating earnings were $81 million for $1110 per common share diluted.
Second quarter capital investments total $1.1 billion excluding acquisitions and the best features. During the first six months of the year we’ve invested just over $2.1 billion or plan $5 billion capital program yearly cash flow was $2.4 billion we up we’ve updated our 2010 corporate guidance adding another $500 million to our annual capital budget. The special investment will be used to advance the development of our key and emerging resource plays in Canada and United States.
Our 2010 production is a help target. With increase that 2010 production guidance to average 3.36 billion cubic feet equivalent today for the year. Consequence to a 13.5% growth rate per share for 2010. Well [inaudible] net operating cost were 17% lowers and guidance.
2009 [[ph]] we reduced our operating cost guidance to $0.80 per thousand cubic feet equivalent. We’ve adjusted our 2010 expressing assumptions downward from 575 to $5 per thousand cubic feet. Although our cash flow range remained unchanged have between 4.4 to $4.8 billion per year.
Our updated guidance is available on our corporate website. EnCana’s quarterly average productions volumes were more than 3.3 billion cubic feet equivalent per day and 8% increase over 2009 second quarter proforma volumes. On first share basis second quarter natural gas production increase about 12% compared to a second quarter of 2009.
I’ll now turn the call over to Michael Graham, President as the Canadian Division will [inaudible] to discuss the Canadian division results.
Thank you for joining the-in the Canadian division production volumes for the quarter were approximately 1.4 billion cubic feet equivalent per day a 3% decrease over proforma volumes for the same period in 2009. Primarily a full 12% increase over first quarter 2010 volume. [Inaudible] were up for the 150 million cubic feet a day. Q1-over-Q2 in 2010. The year-over-year decrease in volumes is primarily a result of divestitures return about around a 100 million cubic feet have account in 2009.
What we has our quarter-over-quarter production increase in due the steady growth normal royalty and play optimization at (inaudible) which includes the monopoly and greater Sierra that include the Horn River (inaudible)