Hike in Canadian E&P capital budgets excludes greater gas play development

摘要

Record second-quarter cash flows have prompted Canada's leading oil and gas producers to hike their 2008 capital budgets by 10%, but, with few exceptions, little is being directed at gas plays. The shaky outlook for gas prices, combined with higher upstream costs, hefty increases in British Columbia and Saskatchewan land values and unease about a predicted shortage of righands for the upcoming winter season are cited as contributing factors to the uneasy mood. Instead, companies such as EnCana and Husky Energy are boosting dividends, while EnCana, whose stock has fallen 20% to 25% over the past 30 trading days is open to buying back its undervalued stock, an option CEO Randy Eresman said "appears to be very attractive." But, rather than pumping more cash into its 2008 capital expenditure program, EnCana is taking a measured, longer-term view.