Encana has announced an aggressive plan to boost profits.
as part of the plan they will cut 20% of its workforce, reduce dividends, and focus future spending on just five regions as it moves away from low-value natural gas production.
The plan includes the spin off of a historic Alberta freehold lands into a separate company.
Put in place by new Chief Executive Doug Suttles, the Ecana seeks to push earnings and raise cash flow as the company outlook shows they believe natural gas prices will remain weak in the coming years.
Previous attempts to boost profits failed under former chief executive Randy Eresman, who left last year.
Suttles said Encana will concentrate its drilling efforts on five key regions next year, down from 30 regions they currently operate in.
Of the newly selected five regions, three are in the United States and two in Canada.
All five are rich in liquids, offering valuable oil, or ethane, propane and other gas liquids along with natural gas production.
“We had more gas options in the portfolio than we could reasonably develop,” Suttles said on a conference call.
Encana has over 4,000 employees and will lay off 20% of staff by the end of 2013.
The Dallas-area office will be closed altogether.
Encana is Canada’s largest natural gas producer.