Canadian natural gas producer, Encana Corp. (ECA) reported that it has entered into an agreement with SBM Offshore, a marine service provider.
Per the contract, SBM Offshore will operate the Deep Panuke platform on behalf of Encana. The platform is located in the Deep Panuke natural gas field, offshore Nova Scotia, Canada. The field consists of four operating wells. Encana reveals that the platform has been constructed for producing roughly 300.0 million cubic feet of natural gas from the wells every day.
Encana added that the natural gas produced from the Deep Panuke development will likely be sold to Spanish oil and gas company, Repsol SA (REPYY).
Encana, based in Calgary, Alberta, is a focused pure-play natural gas exploration and production (E&P) company. It is the second largest gas producer in North America, and holds a highly competitive land and resource position in numerous promising shale and tight gas resource plays. This provides the company with a low risk, long-life, and sustainable growth profile.
Encana has a diverse/high quality portfolio of natural gas assets spread over Canada and the U.S. This provides the company with a huge inventory of reserves and a resource base capable of significant production growth.
However, Encana’s extensive natural gas exposure raises its sensitivity to gas price fluctuations, compared to its more diversified independent peers with higher oil production.
Encana currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better-ranked players in the E&P sector like Abraxas Petroleum Corp. (AXAS) and Harvest Natural Resources Inc. (HNR). Both the stocks sport a Zacks Rank #1 (Strong Buy).
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