SHARE
Encana CEO Doug Suttles. Image courtesy of Encana/Youtube.

Calgary-based Encana cut about $700 million from its 2015 budget Wednesday after reporting  an 85 percent drop in operating profits.

The company cuts its annual budget down to between $2 billion to $2.2 billion from its initial budget of $2.8 billion.

Encana booked a $35 million fourth quarter operating profit, or 5 cents per share, down 85 percent from the $226 million operating profit posted during the same quarter last year.

Analysts had expected the company to report an operating profit of 21 cents per share, Reuters said.

Encana saw oil and natural gas liquids production spike by 61 percent during the fourth quarter to an average of 106,400 barrels per day.

Natural gas output fell by almost a third to 1.9 billion cubic feet per day.

The company’s fourth quarter cash flow fell to $377 million from $677 million during the same period last year due in part to early repayment for long term debt belonging to its recent acquisition Texas-based Athlon Energy.

Encana purchased Athlon in September of $5.93 billion.

CEO Doug Suttles said the company will continue shedding natural gas assets as it looks to focus on gas liquids and oil.

“We are well prepared to act … The lower points in the commodity cycles are usually the most exciting times. We’re prepared to respond if the right opportunities come along,” Suttles said.