EnCana’s rosy forecast

Like deferential courtiers, Canada’s business reporters continue to report the Emperor’s wardrobe changes with nary a dissenting comment.

Last week, Calgary-based energy giant Encana, reported a 183% increase in profits last year and projected a 10% growth in sales in 2004. The Canadian Press story contained virtually no information other than what was included in the company’s press release.

But big questions were un-addressed.

  • How much of the company’s reported earnings are projected to come from BC, where EnCana has expanded rapidly with its $418 million purchase of drilling licences in northeastern BC in November?
  • What impact will growing opposition among northeastern First Nations to oil and gas development – particularly EnCana – have on the company’s revenue and earnings?
  • What has EnCana disclosed to its shareholders and investors about the growing potential liabilities from First Nations?
  • If the Supreme Court of Canada upholds the recent Haida rulings – which imposed independent obligations to consult and accommodate First Nations on third-party tenure holders – what impact will this have on companies like EnCana?

All these and other questions remain unreported in Canada’s financial papers. While the Emperor’s courtiers continue to try to distract us with good news stories, some of the more innocent amongst of us are beginning to question the reality of this manufactured perspective.

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