(Reuters) - Encana Corp (>> Encana Corporation), Canada's largest gas producer, reported a 25 percent increase in second-quarter operating profit as oil and natural gas liquids (NGL) volumes soared.

The company has been focusing on the development of more-lucrative oil and liquids-rich natural gas plays. Volumes of oil and NGL jumped 69 percent in the quarter.

Encana's strong results comes amid a rebound in natural gas prices, after a heatwave followed a chilly spring in the United States.

The benchmark price of the fuel on the New York Mercantile Exchange rose 75 percent in the second quarter from a year ago, when natural gas hit a 10-year low.

Encana said it expects full-year capital spending to be at the lower end of its forecast of $3.0 billion to $3.2 billion. Cash flow is expected to be in the middle to higher end of its forecast of $2.3 billion to $2.5 billion.

The company reported net profit of $730 million, compared with a loss of $1.48 billion a year earlier, when it reported a large asset impairment charge.

Operating income, which excludes most one-time items, rose to $247 million, or 34 cents per share, from $198 million, or 27 cents per share, a year earlier.

"My focus is on developing a strategy that will deliver sustainable growth in shareholder value during a period of modest commodity prices," said Chief Executive Doug Suttles, who took the helm last month.

Investors have been looking for signs that Suttles, a former BP Plc (>> BP plc) executive, will steer the company towards a new course after years of strategic missteps.

Encana has been criticized for spinning off the company's oil operations and stepping up natural gas production even as new shale gas supplies flooded the market.

The company also faces a U.S. Department of Justice probe into whether it illegally colluded with Chesapeake Energy Corp (>> Chesapeake Energy Corporation) to lower the price of exploration lands.

Encana said on Wednesday an internal strategy development team, which directly reports to Suttles, was thoroughly evaluating the company's assets, strengths and capabilities, current performance and competitive positioning.

(Reporting by Nia Williams in Calgary and Swetha Gopinath in Bangalore; Editing by Rodney Joyce and Saumyadeb Chakrabarty)

Stocks treated in this article : Chesapeake Energy Corporation, Encana Corporation, BP plc