EnCana profit soars on hedging gain

EnCana Corp. said Wednesday its first-quarter profits soared partially on the strength of an after-tax hedging gain.

Reporting in U.S. dollars, the Calgary-based oil and gas giant said it booked a profit of$962 million or $1.28 per share during the quarter ended March 31. The net earnings compare to year-earlier profit of $93 million or 12 cents per share.

Quarterly revenue dipped to $3.36 billion from $5.1 billion recorded the year before.

EnCana attributed part of the profit increase to a $89 million after-tax mark-to-market hedging gain, compared to an after-tax loss of $737 million in the first quarter of fiscal 2008. Company president Randy Eresman also said EnCana booked nearly $700 million in after-tax gains from natural gas hedges.

EnCana said total oil and gas production increased three per cent from year-earlier levels to 4.7 billion cubic feet equivalent per day, a figure the company said was slightly ahead of its quarterly production target.

Despite the increases in production and profit, EnCana reported decreases in its cash flow and operating earnings and said it plans to stick to a modest capital spending plan for 2009.

"We remain focused on directing our capital investment to only our highest return projects for 2009," the company said in a statement.