Encana Corp. said April 30 it expects cost savings from its acquisition of Newfield Exploration to be 20% higher than its estimates, and reported a 6% rise in quarterly adjusted profit as it sold oil at higher prices.
The company bought Newfield for $5.5 billion in a cash-and-stock transaction to boost its operations in the Scoop and Stack region, a fast-growing shale oil field in the Anadarko Basin in Oklahoma. The Newfield acquisition closed on Feb. 13.
Encana said it now expects to deliver annual general and administrative savings of at least $150 million from the Newfield deal.
The deal has helped the Calgary, Alberta-based oil and gas company to shield itself from recent volatility in the Canadian oil market owing to its growing operations in the U.S.
Adjusted operating earnings rose to $165 million in the first quarter ended March 31, from $156 million a year earlier.
Excluding one-time items, the company earned 14 cents per share, beating analysts' average estimate of 8 cents per share, according to IBES data from Refinitiv.
Total adjusted production rose to 566,600 barrels of oil equivalent per day (boe/d) from 500,900 boe/d a year ago, while realized prices for oil increased nearly 3% to $57.34 per barrel.
Encana also reiterated its plans to spend $2.7 billion to $2.9 billion annually and reaffirmed its production targets, including about 15% liquids growth from its core growth assets.
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