On Tuesday, Encana Corporation (USA) (NYSE:ECA) announced a huge loss of 1.7 billion in the first quarter after it booked an impairment charge of $1.2 billion.
The huge impairment charge was largely associated to the decreasing oil and gas prices. The energy company’s revenues were negatively affected by a massive margin as they went down by 98%. Despite the drop, the company managed to perform better than projected by analysts.
The company which is based in Calgary, Alberta had put in a lot of effort to shift from natural gas and focus more on liquid assets in terms of oil and gas. A year ago, the production of the assets went up by 78% to settle at around 120,000 barrels per day.
The overall production ranged around 430,100 barrels of a dairy oil equivalence which dropped from 536,100 barrels per day recorded in the year before. The fluctuations are a result of the asset shift to a higher sales margin from the lower sales margin and the liquid-weighted production blend.
According to Encana’s Chief Executive Officer, Doug Suttles, the company made some positive growth by shifting its portfolio which now makes up part of the most important positions in North America.
He went further to state that the company’s best strategic assets are its current drivers which are pushing it to better margins. He claimed that the strategic assets have responded better by pushing further than the company’s whole portfolio did in 2013.
The energy firm reported that almost 74% of its liquid produce within the first three months of 2015 was derived from Montey, Eagle Ford, Permian shale and Duvernay formation assets. The natural-gas price dropped by 18% from the recorded value in the previous year. Oil and liquid gas also experienced annual declines adding by a 45% margin. The drops affected the operating revenues.
The recorded drop reported a massive flop from $515 million to $9 million. In terms of share value, it dropped from 70 cents per share to 1 cent per share.