CALGARY - New federal foreign investment rules wouldn't stand in the way of natural gas giant Encana Corp. being taken over, interim CEO Clayton Woitas said Thursday as the company reported quarterly and annual losses and saw its stock slide.
Woitas, a board member who took over from Randy Eresman when he stepped down suddenly last month, said a takeover isn't necessarily what Encana is after.
"Any company is for sale at any given time. All I can say right now is we've had no calls, expressions of interest," he said.
"What we continue to do is execute on our wonderful asset base and whatever happens happens."
In December, Ottawa approved Chinese company CNOOC Ltd.'s $15.1-billion takeover of Nexen Inc. (TSX:NXY) and Malaysian firm Petronas' $6-billion takeover of Progress Energy Resources. But it said from now on it will be tougher on state-owned enterprises looking to take control of Canadian companies, especially in the oilsands.
When asked on a conference call whether that decision would preclude an Encana takeover, Woitas tersely replied "no" — but did not offer further explanation.
Encana (TSX:ECA) shares were down nearly 6.8 per cent on the Toronto Stock Exchange to $18.16 after the company posted a loss of $80 million for the fourth quarter and $2.79 billion for 2012.
The Calgary-based gas natural gas giant said its fourth quarter loss amounted to 11 cents per share, an improvement over a shortfall of $476 million, or 65 cents per share, in the same quarter at the end of 2011.
Revenue came in at $1.6 billion for the quarter, down dramatically from $2.46 billion year over year but only slightly lower than analyst estimates.
Adjusted earnings, however, came in at 40 cents per share, beating estimates by seven cents per share.
For the full year, Encana posted a loss of $2.79 billion, or $3.79 per share, compared to a profit of $5 million, or one cent per share, in 2011.
The company recorded a $4.7-billion impairment charge in 2012, primarily from the decline in the 12-month average trailing natural gas prices, which Encana said reduced proved reserves volumes and values.
Since it spun off its oil and refinery assets into Cenovus Energy Inc. (TSX:CVE) in 2009, Encana has been focused exclusively on developing natural gas.
Encana and other producers have been grappling with a North American oversupply of natural gas and limited opportunities to export around the globe — particularly the Asia-Pacific region.
Encana ended the year with $3.2 billion in cash and cash equivalents, exceeding the $2.5 billion it had targeted in 2012, due in part, it said, to signing joint-venture agreements with subsidiaries of PetroChina Co. Ltd., Mitsubishi Corp. and Toyota Tsusho Corp.
"Operational momentum built through 2012 combined with our major transaction agreements puts Encana in a strong position starting 2013," said Woitas.
Encana is aiming 80 per cent of its 2013 operating capital toward more lucrative oil and natural gas liquids, with a target of between 50,000 and 60,000 barrels a day.
That's a big jump from the 31,000 barrels per day Encana averaged in 2012, but lower than a range of 60,000 to 70,000 Encana set out last June.
Natural gas production is expected to stay flat compared to 2012 levels at between 2.8 to three billion cubic feet per day.
Encana says its capital budget is between $3 billion and $3.2 billion this year, about one billion lower than previous targets.
"At the end of the day, the oil and gas industry is the commodity business," said Woitas, adding the industry can show "discipline" in managing costs.
"We intend to increase our margins without depending on the natural gas price recovery."