EnCana (ECA)

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dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

EnCana (ECA)

Post by dan_s »

This is why EnCana will be going into the Sweet 16.

On February 13, 2019, Encana completed the acquisition of all the issued and outstanding shares of common stock of Newfield whereby Encana issued approximately 543.4 million common shares to Newfield shareholders, representing an exchange ratio of 2.6719 Encana common shares for each share of Newfield common stock held. Following the acquisition, Newfield’s senior notes totaling $2.45 billion remain outstanding. Newfield’s operations are focused on the development of oil-rich properties primarily located in the Anadarko Basin in Oklahoma. The post-acquisition results of operations of Newfield will be included in the Company’s interim consolidated results for the period ended March 31, 2019.

On February 13, 2019, the Company confirmed it will proceed with its previously announced plans to spend up to $1.25 billion to purchase common shares, for cancellation, subject to the receipt of regulatory approvals. On February 27, 2019, the Company announced that the TSX accepted its notice of intention to commence a NCIB beginning March 4, 2019 and ending March 3, 2020.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: EnCana (ECA)

Post by dan_s »

In the last 3 months, 15 ranked analysts set 12-month price targets for ECA. The average price target among the analysts is $10.14. Their valuations range from $8.00 to $13.00 per share.

ECA closed at $7.57 on April 12.

30 analyst reports are included in the Reuters / First Call price target of $10.58. 12 of the 30 reports are dated prior to 2019 (based on very old data). All of them are based on lower oil prices than we have today. 5 rate it a STRONG BUY and 18 rate it a BUY.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34465
Joined: Fri Apr 23, 2010 8:22 am

Re: EnCana (ECA)

Post by dan_s »

I have posted my updated forecast/valuation model for EnCana (ECA) to the EPG website. My initial valuation is $13.40/share.

My valuation is based on realized crude oil prices of $60/bbl for 2019 and $65/bbl for 2020. The production volumes are based on the midpoint of guidance from EnCana, which you can view for yourself on the EnCana website.

EnCana does pay small dividend and they have an aggressive stock buyback program in place.

2018 Actual Results were $1.11 EPS and $2.21 Operating Cash Flow Per Share. Production increase 12.8% year-over-year in 2018.
Including the Newfield production, EnCana expects to increase production by ~62% YOY in 2019 with an exit rate of approximately 620,000 Boepd (30% crude oil, 25% NGLs and 45% natural gas).
Dan Steffens
Energy Prospectus Group
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