03:09 PM EST - EnCana Corp. : notes that its chief executive expects the decline in natural gas drilling in Western Canada to continue for two more years. Randy Eresman said Monday that as energy companies focus on bringing oilsands projects on stream, the dizzyingly high capital spending on conventional oil and gas seen in 2005 won't be repeated. Oil and gas companies began reducing their drilling midway through 2006 in response to a softening of commodity prices, a high inventory of natural gas and runaway costs for labour and equipment in Alberta's overheated economy. Last fall, energy heavyweights such as Canadian Natural Resources (TSX:CNQ) sharply cut back on drilling plans, leading to an overall US$5-billion reduction in capital drilling projections for 2007. "Canadian gas production has declined as a result of a significant pullback in activity over the last year," Eresman said after a presentation to oil and gas analysts. "I suspect you will continue to see declining production in Western Canada for the next couple of years." EnCana Corp.
shares ECA:CA are trading up fifty cents at $70.71.
