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MARCH 2014 CORPORATE PRESENTATION – Encana Corp

Encana Corp · Mar 3, 2014 · 44 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 1
    Vision Getting Back to Winning Encana Corporation Corporate Presentation Strategy March 2014 Goals
  2. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 2
    Getting Back to Winning Vision Strategy Goal Leading Disciplined focus Growing North American on generating shareholder resource play profitable growth value company 2017 Balanced liquids and natural gas Growth from a…
  3. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 3
    2013 2017 Strategy Scorecard Disciplined Focus on Generating Profitable Growth Focused and disciplined capital allocation to five core growth assets Portfolio Target +10% CAGR CFPS through 2017 transition 75% of 2017F upstream…
  4. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 4
    2014 Strategy Scorecard Delivering Value Now Portfolio Transition 2014 Forecast pre-hedge upstream operating CF up 10% year over year Five core growth assets: Allocated 75% of 2014F capital Expected to generate 45% of total…
  5. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 5
    2014 Strategy Scorecard Delivering Value Now Operational Excellence 2014 Focus on cost reduction and capital efficiency improvement 10% increase in 2014F netbacks Complete appraisal of emerging liquids plays TMS and South…
  6. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 6
    2014 Strategy Scorecard Delivering Value Now Balance Sheet Strength 2014 Capex + dividends* to be aligned with cash flow Clearwater Royalty Business IPO Plan to repay May 2014 debt maturity (1 billion) with cash Maintain…
  7. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 7
    Strong Finish to 2013 Strategy in Action Foundation Is Set For Forward Momentum Set 2014 budget with 75% of capital to 5 core growth plays Portfolio Initiated IPO process to surface value in Royalty Business transition Realigned…
  8. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 8
    Capital Focused on Growth Assets Accelerate Investment in High Return Liquids 75% of 2.4 - 2.5B 2014F capital allocated to five core growth assets 2013 2014F 2014F 2017F Focused on high Other return assets Montney Sustainable…
  9. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 9
    Focused on Growing Value, Not Volumes Five Core Growth Assets to Deliver 2x CF*/Mcfe Than Base in 2014 4.20/Mcfe Production 1.90/ Mcfe Time Five core growth Base production 2014F Pre-hedge upstream operating cash…
  10. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 10
    2014 Guidance Key Elements Demonstrating Business Model Sustainability and Improvement Guidance uses same NYMEX/WTI price assumptions as in 2013 Upstream operating cash flow expected to be up 10% year over year (before hedges) Total…
  11. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 11
    Key Objectives for Five Core Growth Assets in 2014 Focus, Acceleration, Optimization In 2014F, the five core growth assets are expected to generate 45% of total pre-hedge upstream operating CF from 25% of total production Montney…
  12. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 12
    Operational Update February 2014 Strategy In Action 5th multi-well pad in Gordondale completed; scheduled Montney production through permanent facilities in Q2 9 rigs currently running 2 of 8 planned wells on production at first…
  13. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 13
    Strategy To Deliver Sustainable Returns Shareholders to Benefit from New Strategy in 2014 Disciplined and focused capital program 75% of 2014 capex allocated to five core growth assets Pre-hedge upstream operating cash flow expected to…
  14. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 14
    Encana Corporation Disciplined Focus on Profitable Growth Leading North American oil and gas resource play company High quality rocks Vision Scale and running room Operational excellence Portfolio optionality Disciplined focus on…
  15. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 15
    Supplemental
  16. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 16
    Winning Core Competencies Aligned Organizational Structure High quality rocks Understand the trade Scale winds TOP TIER MARKET Running room RESOURCE FUNDAMENTALS Strong linkage to capital allocation Oil and gas David Hill Renee…
  17. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 17
    2013 Results vs. Guidance Capital Discipline Drives Results 2013 Guidance 2013 Actual Total Cash Flow (B) 2.4 2.5 2.6 - per common share, diluted (/sh) 3.25 3.40 3.50 Capital Investment (B) 2.7 2.9 2.7 Net Divestitures (B) (0.5)…
  18. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 18
    Pursuing Value vs. Volumes 2014 Capital Program Overview 2013 2014F Higher margin Upstream Operating Cash Flow (B) 3.2 3.0 3.2 projects offset Total Cash Flow (B) 2.6 2.4 2.5 by reduced hedging gains + Capital Investment (B) 2.7…
  19. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 19
    Focusing Capital on High Return Assets Oil and Liquids Focus Drives Margin Growth 2013 2014F % Production (MMcfe/d) 3,100 3,100 - NYMEX Gas Price (/MMBtu) 3.65 3.75 3 WTI Oil Price (/bbl) 97.97 95.00 (3) Average Wellhead Price…
  20. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 20
    Reserves Realigned With New Strategy Extensions & Discoveries Replaced 250% Liquids & 75% Gas Production Tcfe 15 (Canadian Protocol, Proved, Forecast Prices, After Royalties ) Reserves (especially 14 PUDs) realigned with 13 business…
  21. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 21
    Why the Five Core Growth Assets Matter Liquids Rich & Oil Opportunity Set Returns 40% Liquids rich and oil assets Montney Liquids rich Running room and scalability - growth potential of 50,000 Duvernay boe/d High value condensate…
  22. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 22
    Montney Decades of Low Cost Inventory Oil Why We Like It Liquids Massive running room and scale Gas Potential of 2 Bcf/d and 50,000 bbls/d on Encana lands 25 years of drilling inventory Large contiguous core land positions Encana…
  23. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 23
    Montney Key Statistics Land (net acres) 575,000 Average working interest 66% Type Curve EUR/well 7 9 Bcfe, 650 1,000 MBoe Type Curve ROR 60 100% Well inventory (gross) 3,700 Well costs (DCT) 8 10 million Royalty rate 11% 15%…
  24. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 24
    Montney: Cutbank Ridge Partnership (CRP) Partnership with Mitsubishi: Encana 60% interest Tower Mitsubishi, 40% interest Dawson Development areas: North Montney: Tower, Dawson North, Dawson South and Tumbler Ridge Cadomin Dawson…
  25. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 25
    Duvernay Premier Position in World Class Reservoir Why We Like It Kaybob Area: 2014F: 30 gross Massive resource Oil wells Liquids Estimated total resource of 443 Tcf gas, 11.3 Bbbls NGLs, 61.7 Bbbls oil (source: ERCB; medium case)…
  26. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 26
    Duvernay Key Statistics Land (net acres) 253,000 Average working interest 50% RPH type curve EUR/well 1,000 1,200 MBoe RPH type curve ROR 100% Well inventory (gross) 1,420 RPH well costs (DCT)(1) 12 18 million(1) Royalty rate 15%…
  27. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 27
    Unconventional Reservoir Comparison Duvernay World Class Reservoir Encana controls one third of the top tier land in the condensate window* Reservoir Attribute Duvernay Marcellus Eagle Ford TVD Depth (ft) 8,200 13,100 400 8,400…
  28. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 28
    Duvernay Joint Venture Phoenix (subsidiary of PetroChina) agreed to invest C2.18 billion for 49.9% working interest C1.18 billion up front cash A further investment of C1.0 billion during the commitment period (4 years)
  29. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 29
    DJ Basin Delivering High Margin Liquids Production Today Why We Like It Light oil play with significant scale Encana in heart of the Wattenberg field Strong economics - oil and condensate make Liquids up 70% of total liquids…
  30. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 30
    DJ Basin Key Statistics Land (net acres) 49,000 Average working interest 50% Type Curve EUR/well 325 425 MBoe Type Curve ROR 55 85% Well inventory (gross) 500 700 Well costs (DCT) 4.5 5.5 million Royalty rate 20% 2014F Production…
  31. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 31
    San Juan First Mover in New Oil Play Why We Like It Light, sweet oil play discovered by Encana Capable of producing 50,000 boe/d Gas Dominant operator in the play Strong economics, ability to apply scale Consistent well performance…
  32. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 32
    San Juan Key Statistics Land (net acres) 176,000 Average working interest 54% RPH type curve EUR/well 600 680 MBoe RPH type curve ROR 45% 70% Well inventory (gross) 700+ RPH well costs (DCT) 4 5 million Royalty rate 20% 2014F…
  33. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 33
    Tuscaloosa Marine Shale Massive Oil Resource, Ideal for Execution at Scale Why We Like It Emerging oil asset with massive upside potential Estimated 8 BBoe of PIIP Potential to produce 50,000 bbls/d 60% of Encanas 300k net acres is…
  34. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 34
    TMS Key Statistics Land (net acres) 302,000 Average working interest 75% RPH type curve EUR/well 700 800 MBoe RPH type curve ROR 40% 50% Well inventory (gross) 1,300 RPH well costs (DCT) 12 14 million Royalty rate 20% 2014F…
  35. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 35
    Clearwater Royalty Business Public Offering Unlocking New Value Surfacing value from Encanas large portfolio of Alberta mineral fee title lands 5.2 million net acres with freehold oil or gas rights Edmonton Transferring fee title and…
  36. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 36
    2013 2014F Total Liquids Production 2014F Average Liquids Production Growth of 30% bbls/d 90,000 80,000 70,000 60,000 50,000 2014 Deliverables 40,000 1st half measurable cost improvements 30,000 2nd half visible progress on…
  37. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 37
    2013 2014F Total Gas Production Modest Decline in 2014 MMcf/d 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Jan 2013 Jan 2014F Dec 2014F Base Five core growth plays
  38. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 38
    Strategy Delivers Sustainable Returns Target +10% CAGR CFPS through 2017 Expected CFPS growth 3x faster than production 2013 2017F Driven by accelerated capital allocation to high margin oil and condensate assets Anticipate 75% of…
  39. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 39
    Maintaining Financial Strength & Flexibility Liquidity Supports Execution of Strategy 2014 capex + dividends aligned with cash flow Investment grade credit rating 2.6 billion of cash and cash equivalents as at December 31, 2013 4.3…
  40. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 40
    Credit Rating Comparison As of November 30, 2013 S&P Moodys AAA Aaa AA+ Aa1 AA Aa2 AA- Aa3 A+ A1 A A2 A- A3 BBB+ Baa1 BBB Baa2 BBB- Baa3 BB+ Ba1 BB Ba2 BB- Ba3 B+ B1 B B2 APA EOG DVN ECA TLM APC SWN CHK Indicates ratings below…
  41. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 41
    Liquids Value Chain Projected Composition of Total Liquids Production Liquids primarily comprised of higher value products 2014F Pricing 2013 2014F (%WTI) Ethane 14% 14% 10 - 15% Propane 13% 12% 30 - 35% Butane 8% 8% 55 - 60%…
  42. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 42
    Updated Hedging Position 2014 Hedge Program Adds Greater Certainty To Cash Flow Since 2003, weve realized approximately 9 billion in hedging gains* Bcf/d /Mcf 3.0 5.00 4.37 2.5 4.17 4.00 2.0 2.1 3.00 1.5 2.00 1.0 0.8 1.00…
  43. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 43
    2014F ENCANA CORPORATE GUIDANCE US, U.S. GAAP February 13, 2014 2014F Cash Flow ( billions, except per share amount) Total Cash Flow (1)(2) 2.4 2.5 - Per common share, diluted (/share) 3.24 3.37 Weighted average common shares…
  44. MARCH 2014 CORPORATE PRESENTATION – Encana Corp – slide 44
    Investor Relations Contacts Ryder McRitchie VicePresident, Investor Relations & Communications 403.645.2007 ryder.mcritchieencana.com Lorna Klose Manager, Investor Relations 403.645.6977 lorna.kloseencana.com Patti Posadowski…

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