Encana Corp. (NYSE, TSE: ECA) is ready and willing to do more deals, Bloomberg reported Feb. 25.

Fresh off one of the busiest years for A&D in its history, the Canadian oil and natural gas producer is seeing opportunities in the crude price collapse, CEO Doug Suttles said in an interview.

“We’re very prepared to act if the right opportunity opens up in this environment, and that might be for buying something or selling something,” Suttles said Feb. 25 by phone. “The downturns are where the big exciting stuff happens.”

Crude at less than half its high in June is prompting deal talks as potential sellers hunt for cash to fund drilling and reduce debt. After a 25% cut to its 2015 budget announced Feb. 25, Encana has enough cash coming in to cover costs and can consider acquisitions, Suttles said. Industry deal activity is poised to pick up if prices stay low, he said.

“We’re at record levels of tire-kicking at the moment, so there are a lot of window-shoppers going around,” Suttles said. “The longer this environment persists, the more likely something will occur. There’s lots of people talking.”

Among the Calgary-based company’s deals last year were the $5.9 billion purchase of Permian shale oil producer Athlon Energy Inc., the acquisition of Freeport-McMoRan Inc.’s (NYSE: FCX) Eagle Ford holdings for $3.1 billion and the sale of its Bighorn acreage in Alberta for about $1.8 billion.

Eagle Ford

Encana will probably look to sell properties it’s not focusing on to pay for purchases in regions where it’s investing, said Amir Arif, an analyst at Cormark Securities Inc. in Calgary. It could sell land in the Tuscaloosa Marine, San Juan and Niobrara regions to add in the Permian and Eagle Ford areas, Arif said.

“We’re starting to see the deal flow pick up a little bit but it’s still mostly on the smaller assets,” Arif said. “It’s going to take a bit of time once the volatility settles down a bit more before we start seeing some larger deals happen, and that could be the second half of this year.”

Encana’s lower budget of about $2.1 billion this year assumes it can reduce costs by 15%, Suttles said. The producer has secured rate cuts of as much as 50% in some areas following talks with drillers and other service suppliers, Suttles said.

The company isn’t planning job cuts after reducing its workforce by about 25% last year as it embarked on a strategy to slim down operations and favor oil and liquids over natural gas, Suttles said. While it has taken advantage of sector-wide cuts to hire field workers in Texas, Encana’s headcount will fall this year as it chooses not to replace employees heading into retirement, he said.

Crude Prices

If oil around $50 a barrel (bbl) persists into 2016, Encana can continue to bring in cash from operations that cost $35/bbl to $55/bbl, though Suttles doesn’t expect prices to remain low for the long term, he said.

“The world consumes about 93 million barrels of oil a day and that consumption is still growing,” he said. “We actually believe it takes a lot higher than $50 to balance the market. The problem is I don’t know when it will change.”

Encana reported adjusted fourth-quarter profit of 5 cents a share on Feb. 25 after recording costs tied to the Athlon takeover, missing the 19-cent average of 20 analysts’ estimates compiled by Bloomberg. The company posted net income of $198 million, compared with a loss of $251 million the prior year.

The shares rose 2.4% to C$16.74 at 3:10 p.m. in Toronto, after earlier gaining as much as 4.1%.