EnCana, the Canadian energy giant that was formed this year by the merger of PanCanadian Energy and Alberta Energy, today reported first quarter net earnings of C$186m (US$118m) as sharply lower oil and gas prices continued to hit the sector's performance. Revenues totalled just over C$2bn. The new company, North America's biggest independent oil and gas producer, did not give comparable figures for the first quarter of last year. However, PanCanadian and Alberta Energy separately reported total net earnings of C$877m on revenues of C$5.6bn in the first quarter of last year amid soaring energy prices. Earnings per share came in at 36 Canadian cents, slightly below analysts' estimates. However, EnCana said it expected to post a solid performance this year as growing production benefited from firming energy prices as the North American economy recovered. Natural gas sales in the quarter rose 21 per cent from the same period last year to an average 2.7bn cu ft a day, while oil and natural gas liquids sales fell 1 per cent to 246,846 barrels a day, the company said. However, the stronger sales volumes were undermined by lower energy prices, particularly for natural gas. Natural gas prices in the quarter fell to C$3.49 per 1,000 cu ft, against C$11.37 in the same period last year. West Texas Intermediate averaged US$21.64 in the quarter, 25 per cent down on a year ago. The company signalled it would continue its aggressive push for production growth. "By 2005, EnCana is targeting production growth of about 55 per cent to more than 1.1m barrels of oil equivalent per day," said Gwyn Morgan, chief executive. Last week EnCana said it had agreed to buy about 500bn cu ft of natural gas reserves in the US Rockies for C$461m. Lower energy prices also took their toll on Suncor Energy, which produces synthetic crude from the Alberta oil sands. First-quarter net income fell 28 per cent to C$90m. Cashflow from operations fell to C$181m from C$275m last time, despite a rise in production to 212,300 barrels of oil equivalent a day from 146,900 barrels in the year-ago period. This week Petro-Canada and Imperial Oil also reported a sharp fall in first-quarter profits due to lower energy prices.