Analyzing Encana’s 1Q17 Revenues

1Q17 revenues

For 1Q17, Encana (ECA) reported revenues of ~$1.3 billion, which was ~73% higher than analysts’ consensus for revenues of ~$750 million. For 1Q17, ECA reported oil (USO) and gas (UNG) revenues (or product revenues ) of ~$738 million.

ECA also reported net gains on commodity derivatives of ~$338 million, market optimization revenues of ~$186 million, and other revenues of ~$35 million. As a result, ~57% of ECA’s revenues came from crude oil, natural gas, and natural gas liquids sales.

Analyzing Encana’s 1Q17 Revenues

Sequentially, Encana’s 1Q17 revenues are ~58% higher than its 4Q16 revenues. On a year-over-year basis, ECA’s 1Q17 revenues are ~72% higher than its 1Q16 revenues.

Encana reported ~17% lower production in 1Q17 when compared with 1Q16. Despite this, ECA’s 1Q17 realized prices for natural gas (UNG) and crude oil (USO) improved significantly, which impacted ECA’s revenues positively.

ECA’s total realized price increased to $24.91 per boe (barrel of oil equivalent) in 1Q17 from $19.89 per boe in 1Q16.

Peers

ECA’s peer Stone Energy (SGY) reported revenues of ~$95 million in 1Q17, which was ~17% higher than its 1Q16 revenues of ~$81 million. SGY’s revenue increase was mostly driven by higher realized prices for natural gas (UNG), crude oil (USO), and natural gas liquids production.

SGY’s United States average realized crude oil price in 1Q17 rose ~36% to $49.97 per barrel when compared with $36.87 per barrel in 1Q16.

The Direxion Daily Energy Bull 3X ETF (ERX) is a leveraged ETF that invests in domestic companies from the energy sector. The Energy Select Sector SPDR ETF (XLE) generally invests at least 95% of its total assets in oil and gas companies.

Next, let’s take a look at ECA’s cash flows.