CALGARY -- Stronger oil prices, increased production of petroleum liquids and lower costs will allow Encana Corp. to become a free cash flow generator this year, one year earlier than expected in its 2016 five-year plan, its CEO said Wednesday.

Free cash flow is a measure of the cash available to be distributed to investors after accounting for the company's capital expenditures and any expenses required to remain a going concern.

"Our cash flow continues to grow through a combination of increased liquids mix, our relentless focus on efficiency and our approach to maximizing realized prices," said Encana CEO Doug Suttles on a conference call.

"This means that we are translating higher commodity prices into higher margins. As a result, we now expect our 2018 cash flow margin will average about $16 per barrel of oil equivalent, up from our previous target of $14."

 Encana, which reports in U.S. dollars, recorded a $151-million net loss in the second quarter linked to its risk management program but reported improvements over last year by most other financial measures.

The Calgary-based company said the net loss was equal to 16 cents per share and compared with a year-earlier net profit of $331 million or 34 cents per share.

Excluding unrealized losses from its hedging program, which is designed to offset the impact of low oil prices, Encana's operating earnings grew 10 per cent to $198 million, which was ahead of analyst estimates from Thomson Reuters Eikon.

Its cash from operating activities was up nearly 12 per cent at $475 million and cash flow margin was up 57 per cent at $19.09 per oil-equivalent barrel.

Liquids production was 155,300 barrels per day, up 24 per cent from the same time last year, while natural gas output fell four per cent to about 1.1 billion cubic feet per day.

Gross revenue before the impact of risk management hedges was $1.28 billion, up from $937 billion. Including the impact of hedging, total revenue was $983 billion, down from $1.08 billion.

Encana said it won't increase its 2018 capital budget of $1.85 billion despite its operational successes of the first six months of 2018.