Encana Corp., Canada’s largest natural gas producer, slashed its capital budget by a quarter for the year due to a slump in global crude oil prices.
The company had been for the past several quarters directing its funds to boost oil production to reduce exposure to natural gas volatility.
Encana posted an 84.5 percent drop in fourth-quarter operating profit as oil production rose but realized prices fell.
The company, which in September said it would buy Texas oil producer Athlon Energy for $5.93 billion, had been investing in shale, bucking an industry-wide move to cut spending.
Oil prices , which fell to more than six-year lows last month, have halved since their highs in June, hurt by a supply glut and weak demand.
Encana’s operating profit, which excludes most one-time items, slumped to $35 million, or 5 cents per share, in the three months ended Dec. 31, from $226 million, or 31 cents per share, a year earlier.
Analysts on average had expected 21 cents per share, according to Thomson Reuters I/B/E/S.
Natural gas output fell nearly a third to 1.9 billion cubic feet per day, while realized natgas prices fell 4 percent to $4.16 per thousand cubic feet.
Oil and natural-gas liquids production rose 61 percent to average 106,400 barrels per day. Realized liquids prices fell to $66.40 per barrel from $67.01.
The company cut its 2015 capital budget by about $700 million to $2.0 billion-$2.2 billion.
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