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by Stockwatch Business Reporter
West Texas Intermediate crude for June delivery gained 68 cents to $67.93 on the New York Merc, while Brent for June gained 23 cents to $73.36 (all figures in this para U.S.). Western Canadian Select traded at a discount of $17.55 to WTI ($50.38), unchanged. Natural gas for June lost five cents to $2.75. The TSX energy index gained 2.15 points to 200.59.
EnCana Corp. (ECA) gained 51 cents to $16.66 on 6.58 million shares, adding to the 16 cents that it gained yesterday after releasing its first quarter results. It produced 324,400 barrels of oil equivalent a day, falling short of analysts' average prediction of 338,000 barrels a day. EnCana expects to boost production later in the year, so it did not change its full-year production target of 360,000 to 380,000 barrels a day.
Scotia Capital analyst Jason Bouvier is disappointed by EnCana's production and netbacks. He points out that EnCana's Canadian netbacks were only $9.60 per barrel of oil equivalent, compared with his prediction of $10.92 a barrel. The shortfall in both netbacks and production resulted in lower-than-expected cash flow for the quarter. Investors might recall that in February, when EnCana released its results for the fourth quarter of 2017, Mr. Bouvier was so delighted by EnCana's higher-than-expected cash flow that he upgraded his rating to "sector outperform" from "sector perform." He also raised his price target to $14 (U.S.) from $13 (U.S.). He said at the time that he believed EnCana was capable of repeating the same impressive performance. Mr. Bouvier's assessment of the first quarter is considerably less enthusiastic, but not entirely devoid of optimism. He still sees good things from EnCana's four core areas: the Texas Permian, the Texas Eagle Ford, the B.C./Alberta Montney and the Alberta Duvernay. He also maintains his rating of "sector outperform" and his price target of $14 (U.S.). EnCana closed at $12.94 (U.S.) today on the New York Stock Exchange.
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