The Successful Investor Hotline – Friday, June 22, 2012

Article Excerpt

ENCANA CORP., $20.37, Toronto symbol ECA, continues to produce more oil and natural gas liquids (NGLs), such as ethane, propane and butane. NGLs tend to be priced at the same level as crude oil. The company is shifting toward oil and NGLs because low natural gas prices are cutting profits at its regular gas business, which supplied 95% of its overall production in the first quarter of 2012. Encana does not plan to cut its natural gas production. This week, Encana announced that it will spend an extra $600 million (all amounts except share price in U.S. dollars) on its oil and NGL properties this year. The company had originally planned to spend $2.9 billion on all of its capital projects in 2012. The new total of $3.5 billion is roughly equal to Encana’s projected 2012 cash flow. In 2013, the company aims to spend $4 billion to $5 billion to develop its properties. That’s more than its likely cash flow of $2.5 billion…