Morningstar Rating

Stock Research and Analysis

by David Meats

Bulls Say

Management's focus on liquids production will boost profitability and returns.
The company has a footprint in four of the most attractive liquids-rich plays in North America and has ample liquidity to develop these resources.
Additional acreage in less-delineated oil plays (including the San Juan Gallup, the DJ Niobrara, and the Tuscaloosa Marine Shale) could be divested or developed economically at a later time. Read more 

Bears Say

Major acquisitions including the Eagle Ford and the Permian were unfortunately timed, given the subsequent collapse in oil prices. The company could have paid less later and earned a better return.
If oil prices do not recover in line with market expectations, the company's profitability will erode, especially as hedges expire.
The company has more assets than it can efficiently cope with, and is relying on asset sales to fund the development of the remaining assets. Read more 

Management

Doug Suttles' tenure as CEO began in June 2013. Shortly afterward, he introduced a strategy with the goal of refocusing activity on a handful of key liquids plays and spending within cash flows. The company transformed its portfolio in 2014 with numerous   Read more 

Profile

Encana, based in Calgary, Alberta, engages in the exploration for and production of natural gas in the United States and Canada. At the end of 2014, the company reported   Read more 

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