05/03/2016 03:16 EDT | Updated 05/04/2017 01:12 EDT

Encana posts US$379 million Q1 loss, says cost-cutting on track to meet target

Calgary-based Encana Corp. (TSX:ECA) has reported a US$379-million net loss for the first quarter as revenue fell 40 per cent compared with the same time last year.

Encana is adjusting to persistently low commodity prices and recorded $607 million in asset writedowns and $22 million for restructuring charges during the quarter ended March 31.

Its operating loss was $130 million or 15 cents per share — three cents worse than analyst estimates from Thomson Reuters.

Net loss including the writedowns amounted to 45 cents per share, compared with $1.71 billion or $2.25 per share a year earlier and an estimate of 20 cents per share.

Revenue after royalty payments fell to $753 million from $1.25 billion in the first quarter of 2015. Analysts had estimated about $657 million of revenue, according to Thomson Reuters.

A year earlier, Encana had an operating profit of $19 million or three cents per share after eliminating the impact of $1.2 billion in asset writedowns and other items.

The quarterly results were issued several hours ahead of Encana's annual shareholders meeting today in Calgary.

Although dismal, Encana says the latest financial report showed some signs of improvement in operating efficiency.

"Our teams are drilling some of the fastest, highest performing and lowest cost wells in our core four assets and we continue to find greater efficiency in every part of the business," Encana chief executive and president Doug Suttles said. 

"We are on track to deliver $550 million of year-over-year cost savings."