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If we recall back in one of those five good years of the past thirty four. When members of the service industry were busy working as hard as they could. Companies such as @encana accused them of being lazy and greedy for billing what the market would bare…
That same disrespect and pious attitude is evident in @encana unwillingness to pay the service industry for the work they’ve done, and are rightfully owed. Buying stock to shred the certificates is more important than paying the people who are suffering the most in this downturn?
With $1.486 billion spent on 6 months capital expenditures, the $2.35 billion owed in s/t liabilities equals one full year of capital expenditures. With annualized cash flow of $2.87 billion it also represents what cash will be generated by @encana in the course of one year.
@encana maintains a substantial working capital deficiency, the service industry will / might / won’t see that money in a future far, far from here. Next upswing these drillers and fracers, if they survive, should best deal with reputable firms that honor their commitments.
The sad part of this transaction is that @encana would have been better off on a pro-forma basis to have used that cash to pay off their current liabilities. Their balance sheet would have been healthier than it is today, post normal course issuer bid.
After all it’s about “building balance sheets,” we were told. Any comments @encana, or how about all the other producers who have done the same. Don’t worry, we’ll all believe you next time you blame your despicable management on the next scapegoat.
Profitable oil and gas operations can be conducted through our Preliminary Specification. Leaving this history behind. short-links.people-ideas-objects.com/WhitePaperDL
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