EnCana aims for a double

Article Excerpt

ENCANA CORP $32.25 (Toronto symbol ECA; Shares outstanding: 747.9 million; Market cap: $24.1 billion; SI Rating: Average; Dividend yield: 2.5%) has announced plans to double its natural-gas production over five years. The company is particularly interested in producing more gas at its Haynesville shale-gas property in Louisiana. (Shale gas is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas.) To achieve its higher production goals, EnCana will spend $4.5 billion on exploration and capital upgrades in 2010 (all amounts except share price in U.S. dollars). That’s $750 million more than it had previously estimated. To put these costs in context, EnCana’s 2009 cash flow was $5.0 billion, or $6.68 a share. The company feels its 2010 cash flow will cover these extra costs. EnCana is still a buy. buy…