Looking Beyond Encana's Loss

In today's video, analysts Paul Chi and Matt Argersinger discuss Encana, one of the largest natural gas producers in North America. Encana posted a quarterly loss for the second quarter, thanks to a writedown of $1.7 billion against net income. While the net income number looks ugly, this was a noncash charge that does not factor in future price appreciation of natural gas. Going forward, Encana is very much a liquids growth story. The company hopes to produce 60,000 to 70,000 barrels of liquids per day in 2013, which would help balance out its cash flows. The company is on the right track, but it's a long road ahead before some of these plays are in developmental mode.

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Matthew Argersinger has the following options: short JAN 2014 $65 puts on Devon Energy. Paul Chi owns shares of Chesapeake Energy and Devon Energy. The Motley Fool owns shares of Devon Energy and has the following options: long JAN 2013 $16.00 calls on Chesapeake Energy, long JAN 2013 $25.00 calls on Chesapeake Energy, long JAN 2014 $20.00 calls on Chesapeake Energy, and long JAN 2014 $30.00 calls on Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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