EnCana posts biggest annual profit in Canadian history

Oilsands and natural gas company EnCana Corp. on Thursday pumped its dividend as the company recorded the biggest annual profit in Canadian corporate history.

For 2006, EnCana made $5.65 billion US, or roughly $6.41 billion Cdn, based on last year's average Canada-U.S. exchange rate, a new Canadian record. EnCana's 2006 profit topped the previous record of $5.46 billion posted by BCE Inc. back in 1999.

A big chunk of EnCana's record profit about $2.38 billion US came from one-time gains made from commodity price hedges, sales of discontinued operations and tax rate changes.

After factoring out those special gains, EnCana's operating earnings came in at $3.27 billion US, up one per cent from $3.24 billion US in 2005.

"The year also marked the completion of EnCana's transformation into essentially a pure North American producer focused on unconventional natural gas and integrated oilsands, a strategic position that we believe will create sustainable profitable growth for our company," saidcompany president and CEO Randy Eresman

"All of EnCana's production and reserves are now onshore North America," Eresman said.

He added that EnCana was doubling its quarterly dividend to 20 cents per share "as a reflection of our increased confidence in the sustainable nature of our North American unconventional business model."

For the fourth quarter, the Calgary-based company said it made $663 million US, or 82 cents a share, down from $2.37 billion US, or $2.71 a share, in the last quarter of 2005.

A drop in natural gas prices of more than 40 per cent from the Q4 of 2005 to the same period of 2006 helped push down EnCana's earnings.

Shares of EnCana were offsix cents at $57.19 on the TSX.