In addition to announcing operational and financial results, Encana detailed additional spending cuts to better manage through this downturn. The company is reducing its workforce by 20%, cutting its dividend from $0.07 per share to $0.015 per share, and reducing capex spending by 55%. The spending cuts are expected to save the company $550 million in 2016, while the capex cut will cause its production to decline from the 405,000 barrels of oil equivalent per day, or BOE/d, it produced in 2015 to 340,000 to 360,000 BOE/d in 2016. However, much of that decline is coming from assets outside its core, which is where its spending the bulk of its capex.
Now what: Investors like that Encana's cash flow is staying steady even though commodity prices are weakening. Further, they like the company's conservative plan for 2016, which will see additional spending cuts. This is giving them the confidence that Encana is making the necessary moves to manage through the downturn.
This iSecret stock could make this pop look tiny
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here .
The article Here's Why Encana Corporation's Stock is Rallying Today originally appeared on Fool.com.
Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2016 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
