Encana cuts capital spending plan by US$700M

Encana Corp.is cutting $700 million from its capital budget for this year, the latest Canadian energy producer to cut spending in the face of low commodity prices.

The Calgary-based oil and gas company, which keeps its books in U.S. dollars, will now spend between $2 billion and $2.2 billion on its capital budget.

Encana says it's assuming US$50 a barrel for the benchmark West Texas Intermediate crude, about the current level after dropping from above US$100 a barrel last summer.

The revised spending plan was announced as the company reported that it earned $198 million or 27 cents per share for the fourth quarter ended Dec. 31, compared with a loss of $251 million or 34 cents per share a year ago.

However, Encana said its operating earnings, which excludes certain one-time items, amounted to $35 million or five cents per share, down from $226 million or 31 cents per share a year ago.

Revenue net of royalties totalled $2.25 billion, up from $1.42 billion.