* Reduces capital spending forecast
* New strategy to be released by year end
* Shares rise 2 pct
CALGARY, Alberta, Oct 23 (Reuters) - Encana Corp,Canada's largest natural gas producer, reported a third quarternet profit, after a year ago loss, and lowered its capitalspending forecast as a part of its push to restructureoperations under new Chief Executive Doug Suttles.
The company said it now expected capital spending to bebetween $2.7 billion and $2.9 billion this year, down from $3.0billion to $3.2 billion.
Encana is restructuring its operations as prices for naturalgas are expected to remain low due to abundant shale gasproduction.
Suttles, a former BP Plc executive, was appointedchief executive in June. He has already begun making changes,restructuring the company's senior management and promised lastmonth to cut dry gas production and revamp Encana's businessesto cope with weak cash flow.
Suttles said on Wednesday that the final details of therestructuring and a revised strategy for the company will bereleased before the end of December.
"We are on track to announce the strategy and ensure 2014plans are built around the new strategy before year end,"Suttles said on a conference call.
Suttles said the release of the new strategy will include anannouncement on Encana's dividend, which now costs the company$600 million annually. Some analysts speculate that a cut islooming as Encana looks to free up cash to boost production.
"I think a dividend cut is highly likely," said LannyPendill, an analyst with Edward Jones. "We've seen variousindications from the management team since (Suttles) took overthat that would be something they would consider."
The company's cash flow, a key measure of its ability to payfor new projects and drilling, fell 28 percent to $660 million,or 20 cents per share, in the third quarter.
Encana however, said it expected full-year cash flow to benear the high end of its current forecast range of $1.5 billionto $2 billion.
The company reported a net profit of $188 million, or 25cents per share, for the third quarter ended Sept. 30. Itreported a net loss of $1.24 billion for the year ago period.
Excluding most one-time items, the company posted operatingincome of $150 million, or 20 cents per share. Analysts onaverage had expected 17 cents per share, according to ThomsonReuters I/B/E/S.
Encana's oil and natural gas liquids volumes in the quarternearly doubled to average about 58,200 barrels per day. Dailynatural gas production averaged 2.7 billion cubic feet.
Encana shares were up 37 Canadian cents to C$19.16 by lateafternoon on the Toronto Stock Exchange.
- Company Earnings
- Investment & Company Information
- natural gas