Shale Play Exposure Bodes Well for EnCana's Future Growth

Significant exposure to two of the hottest new emerging shale plays in North America should add considerable value to EnCana Corp.'s (ECA) natural gas pipeline in the coming years.

That's the opinion of several analysts who Tuesday weighed in on the announcement that EnCana has 220,000 net acres in the Horn River shale play of Northeast B.C., and 325,000 net acres in the Haynesville shale play in Louisiana and Texas. Drilling results to date at both plays has been compared to the Barnett shale gas play and EnCana said it believes each play can achieve production of 1 bcf per day in the future. 

In a research note Blackmont analyst Menno Hulshof said:

Although both plays are early-stage in nature, they have the potential to meaningfully impact EnCana's long-term production growth.

He reiterated his  "buy" rating and $99 price target. 

UBS analyst Andrew Potter added:

We estimate that the Horn River & Haynesville could easily add C$7 to C$10 per share to our net asset value. 

He left unchanged his "buy" rating and $120 price target. 

Comments

[Loup-Garou:]

ECA has done well for me. Their annual report was convincing.

2008 Jun 18 03:02 PM