Canadian natural gas producer,
) is planning to vend its $1.0 billion worth Deep Panuke offshore
natural gas project. Encana does not consider the project
suitable for its core portfolio and aims to focus on the five
profitable natural gas production areas of North America.
Deep Panuke, a natural gas field, is based offshore Nova Scotia,
Canada. The Deep Panuke natural gas development of Encana
primarily generates and processes natural gas from the field.
Encana added that the project produced roughly 300 million cubic
feet of natural gas per day from four operating wells in the
field last month.
Owing to an extreme drop in temperature in parts of northeast
U.S., demand for natural gas has substantially risen as it is
commonly used for heating purposes. Consequently, the Deep Panuke
development has been generating sufficient cash flows for
shareholders. However, due to some reason, Encana believes that
its $1.0 billion natural gas project does not fit well with its
The Deep Panuke project of Encana was slated to start operation
in 2010 but production commenced in late 2013.
Encana, based in Calgary, Alberta, is a focused pure-play natural
gas exploration and production (E&P) company. It is the
second largest gas producer in North America and holds a highly
competitive land and resource position in several of the nation's
promising shale and tight gas resource plays. This provides the
company with a low risk, long-life and sustainable growth
However, Encana's extensive natural gas exposure raises its
sensitivity to gas price fluctuations, compared to its more
diversified independent peers with higher oil production.
Encana currently holds a Zacks Rank #3 (Hold), implying that
it is expected to perform in-line with the broader U.S. equity
market over the next one to three months.
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Meanwhile, one can look at better-ranked players in the oil and
gas E&P sector like
Linn Co LLC
Swift Energy Co
Clayton Williams Energy Inc
). All the stocks sport a Zacks Rank #1 (Strong Buy).