Encana Corp. (NYSE: ECA) reported an unexpected quarterly operating profit, helped by a cost-cutting drive, and said it would raise its 2016 capex.

Cost cuts helped the Canadian oil and gas producer post an operating profit, which excludes most one-time items, of $89 million, or 10 cents per shares, in the second quarter, compared with a loss of $167 million, or 20 cents per share, a year earlier.

Analysts on average were expecting Encana's operating loss to drop to 8 cents per share, according to Thomson Reuters.

Encana's net loss narrowed to $601 million in the quarter ended June 30 from $1.61 billion a year earlier when it recorded an impairment charge of about $1.3 billion.

The Calgary, Alberta-based company said it would use a portion of the proceeds from the sale of its Gordondale and Denver-Julesburg Basin assets to increase its capital program by $200 million to $1 billion from its previously announced range of $900 million.

Encana said that the increase in its capital budget would result in production rising by about 13,000 barrels of oil equivalent per day (boe/d) from its four core assets in fourth-quarter 2016.

These core assets—located in the Permian, Eagle Ford Shale, Duvernay and Montney basins—contributed 268,300 boe/d, or about 73%, of total second-quarter production of 368,300 boe/d.

The company said in June it would sell its Gordondale oil and gas assets in northwestern Alberta to Birchcliff Energy Ltd. for C$625 million (US$488 million). The deal is expected to close by the end of this month.

Buoyed by its cost-cutting plan, Encana said it expects its transportation, processing and operating costs to drop by $100 million for the year.