Steep losses send Encana shares to 13-year lows

Hit hard by the continued slump in oil and gas prices, shares of Encana Corp., one of the largest energy producers in Northern Colorado, sank to 13-year lows on the Toronto and New York stock exchanges on Friday after the company reported another steep quarterly loss.

Calgary, Alberta-based Encana (TSX: ECA) (NYSE: ECA) reported a $1.6 billion net loss for the three months that ended June 30, highlighted by a $1.3 billion impairment charge. The loss was slightly better than the $1.7 billion loss it revealed in the first quarter. It reported an operating loss of $167 million, or 20 cents a share, and cash flow of $181 million, or 22 cents a share.

In the same quarter last year, Encana had reported cash flow of $656 million, or 89 cents a share, a net profit of $271 million and an operating profit of $171 million.

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During a conference call with investors, chief financial officer Sherri Brillon said overall job cuts at Encana since 2013 have reached 1,400, which spokesman Jay Averill said included 200 workers let go this month. In Denver, Encana media-relations manager Doug Hock told BizWest, “I don’t believe there are any cuts in our field office in Firestone. Most of them were in Denver and in Calgary.”

The company spent $125 million, mainly on severance pay, since late 2013. It set aside $58 more this year for severance and transition costs, and already has paid out $30 million of it.

Averill said no further cuts are expected in the near future.

The company’s U.S. shares fell 10 percent to $7.73 a share, their lowest point since December 2002. On the Toronto Stock Exchange, shares also fell 10 percent to a 13-year low of $10.10 Canadian, after having traded for as much as $25.69 last August.

Natural-gas production was down 38 percent from a year earlier, while oil and gas liquids production jumped 87 percent. The company’s realized natural-gas price fell nearly 14 percent, and oil and gas liquids prices were down 37 percent.

Oil prices have fallen to less than $50 per barrel since a peak of $107 last summer.