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JULY 2013 CORPORATE PRESENTATION – Encana Corp

Encana Corp · Jul 23, 2013 · 84 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. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 1
    Corporate Presentation July 2013
  2. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 2
    Doug Suttles President & Chief Executive Officer 30 years experience in oil & gas industry Strong track record in strategic and operational delivery Formerly COO, BP Exploration & Production 2008 recipient of University of Texas…
  3. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 3
    The Path Forward What to Expect Process: Continue to operate safely Full scale asset review Understand internal capabilities Bring together a united leadership team Assess the macro environment Formulate Encanas go forward…
  4. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 4
    Tremendous Asset Base Leading North American Portfolio of Resource Plays Biased to organic growth: Greater Sierra (inc. Horn River) We have amassed large, Cutbank Ridge Peace River Arch concentrated, contiguous land Duvernay…
  5. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 5
    Encanas Strengths Portfolio of Land, Reserves & Production* Land (MM net acres) Total land position: 10.9 Fee land (advantaged royalty structure): 3.6 Reserves & Resources (Tcfe; 100% externally evaluated) Proved reserves (P1): 13.1…
  6. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 6
    2013 Focus Striving to be North Americas most efficient & profitable developer of North American energy 1. Top priority - capital discipline and driving down costs 2. Liquids transition - measured pace of investment; speed of…
  7. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 7
    Exercising Capital Discipline 2013 Capital Program Overview 2012 2013F Capital Investment (B) 3.5 3.0 3.2 Measured pace of Net Divestitures (B) 3.7 0.5 1.0 capital Net Capital Investment (B) (0.2) 2.0 2.7 investment Natural Gas…
  8. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 8
    2013F Capital Allocation* Upstream Capital Investment of 2.9 - 3.1 B USA 48% Canada Jonah 52% Other 5% 5% Other 10% Haynesville 21% Duvernay Peace River 11% Arch Emerging Cutbank 30% Plays USA Canada Ridge 29% DJ Basin…
  9. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 9
    2013F Capital Allocation* Investing in Highest Return Projects billions Capital allocation by commodity 3.0 65% 2.5 2.0 54% 54% 1.5 34% 1.0 30% 25% 21% 16% 0.5 1% 0.0 2011 2012 2013F Oil Liquids Rich Natural Gas Natural Gas…
  10. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 10
    Capital Discipline Focused on Driving Down Costs Fund the most profitable assets 80% of 2013F upstream capital allocated to oil & liquids rich natural gas plays 40% of 2013F operating cash flow from oil and NGLs Low cost natural gas…
  11. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 11
    Why Third Party Capital Works For Us Track Record of Surfacing Asset Value Achieve immediate recognition of value Cutbank Ridge Partnership with a Mitsubishi subsidiary Duvernay joint venture with a PetroChina subsidiary Maintain…
  12. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 12
    How Third Party Capital Benefits Encana Illustrative JV vs. Retained Development Plan* Encana capital constant in either case Partner capital spent towards Encanas working interest increases net production Capital, production Year…
  13. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 13
    Leveraging Third Party Capital Completed Joint Ventures, Partnerships & Farm-outs Millions Third Party Capital Projections* Carry capital projected to grow from 750 million to over 1 billion 5,000 Partners agreed to invest over 3.8…
  14. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 14
    Accelerating Value Cutbank Ridge Partnership (CRP) Capital & NPV Comparison Much Less Capital for Similar Value ECA MM CRP Retain 250 ECA Capital 100% 30% 200 ECA Revenue 100% 60% A-Tax PIR 0.9 2.6 150 A-Tax IRR 32% 90% 100 A-Tax…
  15. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 15
    Sources of Liquids Growth in 2013 Conservative Approach Allows Time to Evaluate Profitability Currently commercial liquids plays Driving growth in 2013: DJ Basin - oil Piceance liquids rich gas Cutbank Ridge liquids rich gas Peace…
  16. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 16
    NGL Barrel Composition and Prices 28 32 Mbbls/d in 2013F Encana 2013 Price Product Assumptions (% WTI) % of 2013F Volumes Ethane 10 - 15 30 Propane 30 - 35 25 Butane 70 - 75 15 Condensate 100 - 105 30 Canadian ethane volumes…
  17. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 17
    Industry Leading Natural Gas Producer North Americas 3rd Largest Natural Gas Producer Technology leader Resource Play Hub development model Highly efficient, repeatable process Leverages economies of scale 2013F dry gas funding…
  18. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 18
    Operating Cost Comparison 2012 - Excluding Transportation & Processing Striving to be the most efficient operator US/Mcfe 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 ECA Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peers…
  19. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 19
    Advancing Resource Play Hub Development Track Record of Continuous Supply Cost Reductions Substantial cost reductions through resource play hub Formation core model Multi-well pad using fit- for-purpose rig Hydraulic pressure…
  20. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 20
    Maintaining Financial Strength & Flexibility Liquidity Supports Execution of Strategy Planning to pay 2013 debt maturity (500 million) with cash 2.9 billion of cash and short term investments as at June 30, 2013 4.3 billion of undrawn…
  21. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 21
    Key Messages Converting assets into cash flow Striving to be North Americas most efficient and profitable developer of natural gas Tremendous asset base Growing exposure to oil and natural gas liquids Ensuring sustainability in a…
  22. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 22
    Canadian Division 2013 Strategic Focus Manage KOGAS, Mitsubishi, Toyota and PetroChina joint ventures Evaluate Duvernay and other potential liquids-rich assets Advance liquids extraction through deep cut midstream arrangements…
  23. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 23
    Canadian Division 2013 Budget Overview 2012 Actual 2013F % Change Natural Gas Production (MMcf/d) 1,359 1,500 1,600 10 18 Liquids Production (Mbbls/d) 19.4 30 35 55 80 Core Capital* (MM) 1,567 1,500 1,600 (4) 2 * Does not include…
  24. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 24
    Canadian Division 2013 Liquids Strategy Liquids production (Mbbls/d) Execute joint venture programs 25 Range Mitsubishi, PetroChina 20 Maximize value via liquids production 15 Advancing development of liquids- rich plays 10…
  25. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 25
    Peace River Arch Asset Overview Resource 602,000 net acres Estimated PIIP: 36 Tcf, 1 3 billion bbls Well cost: 7 12 million EUR per well: 4 16 Bcfe Oil gravity: 47 63 API Strategy Accelerate liquids production Advance multi-well…
  26. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 26
    Peace River Arch Historical Production - Improving Liquids Yields Gas production (MMcf/d, NBR) Liquids production (bbls/d, NBR*) 200 12,000 150 9,000 100 6,000 50 3,000 0 0 2008 2009 2010 2011 2012 2013F Liquids…
  27. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 27
    Peace River Arch Multiple Potential New Plays Under Evaluation Montney Oil Granite Wash Liquids Rich Montney
  28. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 28
    Peace River Arch History of Gordondale Development Gamma Ray Density Resistivity 2005: Deviated vertical multi-well pads 2007: Horizontal wells Infill drilling between vertical wells 2011: Development plan overhauled Longer wells,…
  29. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 29
    Cutbank Ridge Asset Overview Resource 982,000 gross acres Estimated PIIP: 130 Tcf, 1 2 Bbbls Well cost: 5 10 million EUR per well: 4 16 Bcfe Oil gravity: 45 65 API Strategy Increase value through accelerated development and…
  30. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 30
    Montney Supply Cost Evolution Advancing Resource Play Hub Design and Development Montney Performance History Cost/Interval Supply Cost* Joint Venture Leveraged Supply Cost MM /MMBtu 3.5 6.45 7 3.0 6 4.55 2.5 5 DCT costs /…
  31. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 31
    Improved Completions Results Cutbank Ridge Slickwater/Cluster Perforation Application 5 well pilot: Improved initial rates compared to offsetting wells Gas Rate/100m (Mcf/d) Pilot Wells 60% Increase Offsets…
  32. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 32
    Cutbank Ridge Liquids Rich Well Flow Test Results 250 400 bbls/d over 10 day test Next step is an for extended production period Tie-in planning has been kicked off R18 R17 R16 R15 R14 7,000 7.0 700 T81 6,000 6.0 600 20-200…
  33. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 33
    Cutbank Ridge Partnership (CRP) Partnership with Mitsubishi: Encana 60% interest Mitsubishi, 40% interest 5 development areas: Montney: Saturn, Swan and Tumbler Ridge Cadomin: Tumbler Ridge Doig: Tumbler Ridge Investment…
  34. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 34
    Bighorn Asset Overview Resource 414,000 net acres Estimated PIIP: 32 Tcf, 1 2 Bbbls Well cost: 5 10 million EUR per well: 2 12 Bcfe Oil gravity: 55 60 API Strategy Focus on liquids-rich opportunities Continue stacked Cretaceous…
  35. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 35
    Bighorn Horizontal Inventory Approximate Liquids Yield (bbls/MMcf) Condensate (1) 100 Butane (1) Propane (1) 80 Ethane (2) 60 Hz 40 Hz 20 Hz 0 CARD. DUNV. CDTT FLHR / WLRCH Estimated of Wells Drilled 2013F…
  36. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 36
    Bighorn Cost Reductions Cost Reduction Example Falher Horizontal Wells Average number Cost per interval (MM) of intervals 2.5 20 2.0 16 1.5 12 1.0 8 0.5 4 0.0 0 2008 2009 2010 2011 2012 Drilling Completions Equip…
  37. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 37
    Bighorn - Kakwa 13-24-61-6W6 Falher C 30 day IP: 12.5 MMcf/d gas 220bbls/d C5+ (17 bbls/MMcf) 1,037 bbls/d liquids C2+ (83 bbls/MMcf) EUR 6.8 Bcf, 644 Mstb 82% above gas type curve per stimulation 275% above type curve for C5+…
  38. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 38
    Bighorn Completion Successes 2,000 20 700 1,800 Lateral Length 18 600 Average Lateral Length (m) 1,600 Frac Stages 16 Average Completion Cost Per Frac Stage (x 1000) Average Frac Stages 1,400 14 500 - 57% 1,200 12 400…
  39. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 39
    Duvernay Asset Overview Grand Prairie Resource 460,000 gross acres Estimated PIIP*: 9.1 billion BOE 50 60 API oil gravity 1,020 1,170 Btu/scf average heat content 1,000 - 1,600 gross well locations 160 330 acre expected well…
  40. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 40
    Duvernay The Encana Advantage Encana has captured over half of the high-graded liquids rich gas condensate fairway Encana free condensate yield results are top quartile Estimate 30 Tcf and 4 billion bbls PIIP on Encana lands…
  41. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 41
    Duvernay Joint Venture 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) Estimated C4.0 billion total…
  42. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 42
    260 miles Clearwater Asset Overview Resource 4.6 million net acres Encana owns mineral rights on 78% of lands Average royalty rate of 7% Estimated PIIP: 12 Tcf (CBM), 600 MMbbls Strategy 420 miles Advance conventional oil…
  43. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 43
    Clearwater Glauconitic Oil Play Well Parameters Inventory: 100 locations Well cost: Redland Vertical well: 1.3 2.0MM Horizontal well : 2.2 3.0MM EUR per well: 60 120 Mbbls 28 - 32 API oil Strathmore North Current Activity/Results…
  44. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 44
    Clearwater Royalty Interest Wells 2012 summary Production Gas: 35 MMcf/d NGL: 1.7 Mbbls/d Oil: 4.5 Mbbls/d Royalty interest revenue 160MM
  45. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 45
    Toyota Tsusho Upfront cash of C100 million Agreed to provide capital funding of C502 million over 7 years: 1,488 drilling locations 1,606 recompletion Wheatland locations Acquired uniform 32.5% GORR on PDP and Future…
  46. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 46
    KOGAS Farmouts Kiwigana Two Separate Deals Deal 1 Signed February 26, 2010 38 sections 324 million earn-in capital KOGAS earned 50% working interest in April 2012 Deal 2 Signed July 28, 2011 33 sections 185 million earn-in…
  47. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 47
    Deep Panuke Project First Natural Gas Production Forecast: Q3 2013 Operating cost (/Mcfe) 0.95-0.65 at 200 300 MMcf/d Transportation cost (/Mcfe) 1.68 Royalties 3% Delivery point Premium price to NYMEX
  48. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 48
    USA Division 2013 Key Strategies Complete evaluation of Collingwood/Utica emerging plays Jonah Position for success through milestone approach DJ Niobrara Niobrara/ Execute existing joint Mancos Piceance venture programs Jonah…
  49. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 49
    USA Division 2013 Budget Overview 2012 Actual 2013F % Change Gas Production (MMcf/d) 1,622 1,300 1,400 (20) (14) Liquids Production (Mbbls/d) 11.6 20 25 72 116 Core Capital* (MM) 1,727 1,400 1,500 (19) (13) * Does not include third…
  50. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 50
    USA Division Liquids Production Profile 2013 Liquids Growth Strategy Liquids Production (Mbbls/d) Complete evaluation of emerging 20 plays Milestone approach testing Range larger completions with defined type curve and cost 15…
  51. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 51
    Piceance Basin Asset Overview Williams Fork Resource 801,000 net acres EUR: 1 4 Bcf /well 8,000 gross well locations Strategy Continue to execute on existing joint ventures Optimize spacing and frac volume Reduce drilling and…
  52. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 52
    DJ Basin Asset Overview Resource 49,000 net acres Denver Estimated PIIP: 700 million BOE Primarily light oil with associated gas/NGLs 80% NRI 500 gross well locations Strategy Accelerate commercial development Optimize well…
  53. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 53
    Haynesville Asset Overview Resource 184,000 net acres NGIP: 80 Tcfe 500 gross producing wells 2,200 wells in inventory (1P + 1C) Strategy Top value/low risk wells Cross Unit laterals 7,500 RPH development Continue completion…
  54. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 54
    Haynesville Resource Play Hub Long Lateral Encana Leading the Way Cross unit well permitting rules amended by Louisiana in Q4 2012 14 cross unit wells on production Early time data meeting type curve expectations Enhancement to RPH…
  55. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 55
    Haynesville RPH Development Past, Present and Future Past - 2011/2012 8 wells per section (2 sections) 4,620 feet max lateral length XP completion design Supply Cost 3.25/Mcf - 3.70/Mcf Present 6 wells per section (3 sections)…
  56. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 56
    Haynesville Completions Design Evolution 2011 160 XP2 150 Completion Design Standard XP XP Proppant/Cluster (Mgal) 140 Cluster Spacing (feet) 55 55 55 130 120 XP Fluid (kgals/cluster) 90 100 110 110 100 Proppant,…
  57. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 57
    Haynesville Supply Cost Evolution Supply cost (/mcfe) 4.5 Long laterals and RPH development efficiencies 4.0 expected to deliver 2.50 to 3.5 0.55 3.00 supply cost in 2013 0.57 3.0 Cross unit drilling rules 0.38 amended by…
  58. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 58
    Utica/Collingwood Shale Asset Overview Lake Resource Huron 429,000 net acres Estimated PIIP: 24 Tcfe Lake Kendall & Koehler 1-33 85 bbls/MMcf of NGLs Michigan 83% RI Wilmot 1-21 500 net well locations Strategy Retain Acreage in…
  59. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 59
    Utica/Collingwood Shale Well Performance Mcf/d 10,000 Subsurface Learnings Reservoir responds well to soak time before production start up RPH Target Well Parameters 1,000 DCT Well cost: 8.6 million EUR per well: 8.7 Bcfe Lateral…
  60. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 60
    Eaglebine Well Posting IP(30) IP(30) Asset Overview Horizontal wells EGBN Wells ECA Hz Wells GT - 220 JG1 - 142 JG2 - 234 2013 Dev. Wells Resource L. McMurrey 1H & 2H IP(30) 483 & 387 124,000 net acres Estimated PIIP: 8.6…
  61. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 61
    San Juan Basin Asset Overview Resource 168,000 net acres captured in oil window Primarily light oil with associated NGLs 80% NRI 900 potential net locations Strategy Appraise oil window of the Gallup/Mancos formation Ramp-up to…
  62. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 62
    TMS 7.5 MMBO/Section OOIP Asset Overview Defines Play Core Resource Ash 31H-1,2 WOC 302,000 net acres J Jackson 4H-2 GDP-Crosby 12H-1 Estimated PIIP*: 8.0 billion BOE Anderson 17H-1, 18H-1 Primarily light oil; sold into Louisiana…
  63. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 63
    Tuscaloosa Marine Shale Well Performance & Key Learnings Subsurface Learnings Longer laterals & enhanced TMS Well Performance completions delivering improved performance Anderson wells establishing type curve Ave LL= 8000…
  64. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 64
    Supplemental
  65. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 65
    Comprehensive Disclosure of Reserves & Resources Largest Reserves and Resource Life in Encanas History Encana Reserves and Resources (Tcfe) 1 Estimated reserves Estimated economic contingent resources P1 P2 P3 Resource Play C1 C2…
  66. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 66
    Reserves & Resources Assignment Understanding 1C Economic Contingent Resources Surface locations Proved Developed (PD) wells 1P 1C 1P 1C 1P Proved Undeveloped (PUD) locations Contingent locations 1P 1C 1P 1C 1P
  67. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 67
    High Quality Asset Base Reserves and Economic Contingent Resources (ECR) (Tcfe) Reserves (Tcfe) Years 100 Technical Certainty Both reserves and ECR are 100% 90% evaluated by IQREs* 70 90 50% Chart illustrates implied reserve 80…
  68. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 68
    Encanas Resource Play Life Cycle A Portfolio Approach to Investment Peak Rate (%) 100 USA Jonah Canada Greater Sierra - Jean Marie 80 Liquids-rich Dry Gas Oil Horseshoe Canyon CBM 60 Texas Eaglebine Piceance Williams Fork San…
  69. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 69
    Disciplined Risk Management Natural Gas Price Hedging* - Increased Cash Flow Certainty Bcf/d /Mcf 3.0 5.00 4.37 4.37 2.5 4.19 4.00 2.3 2.0 3.00 1.5 1.5 2.00 1.0 0.8 1.00 0.5 0.0 0.00 2013 2014 2015 Volume NYMEX…
  70. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 70
    NGL Value Uplift Generic Example /Inlet Mcf USA Canada 6.00 5.06 5.20 4.92 5.03 5.00 4.66 4.76 0.24 4.55 0.57 0.89 1.29 0.48 1.32 0.64 0.91 4.00 1.16 3.00 2.00 4.34 4.16 3.88 3.90 3.73 3.47 3.12 1.00 0.00 Dew…
  71. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 71
    North American Natural Gas Dry Gas, Wet Gas and Associated Gas from Oil Wells Wet gas and associated gas productions share of total production is increasing over time Bcf/d 110 98.6 100 Forecast 90 18% 79.0 79.1 80.618% 80 12% 15%…
  72. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 72
    North American Cost of New Supply 2012 Market Deliverability Dry gas development is required to offset annual production declines Gas production required to offset Supply Cost* /MMBtu decline from December 2011 6.00 5.50 - 6.00 5.00 -…
  73. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 73
    North American Natural Gas December 2012 vs. December 2011 Production Total North American production decreased by 1 Bcf/d December-over-December Haynesville (1.24) Other (0.75) Gulf of Mexico (0.70) SW Basin (0.46) Barnett (0.37)…
  74. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 74
    North American Natural Gas Demand Ranges by Selected Sector Significant demand growth is possible in the LNG, transportation/HHP and power sectors through 2020 Power 2.5 4.5 10.0+ LNG Export 2.4 6.0 10.0+ Transport/HHP 0.5 2.5…
  75. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 75
    Projected New Natural Gas Demand Creation Excellent Opportunities Diversified Across Many Sectors Shorter Term Longer Term Bcf/d…
  76. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 76
    Coal-to-Gas Displacement Historical and Implied by Natural Gas Prices The forward curve implies a loss in coal-to-gas displacement of 4.5 Bcf/d Bcf/d from 2012-2013. 12 Year-Over-Year Displacement 10 Year Bcf/d 2011 1.3 8 7.4 2012…
  77. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 77
    North American Natural Gas U.S. Prior Announced and Forecast Coal Retirements Approximately 56 GW of coal retires in North America by 2025*, with the majority retiring mid- decade in accordance with environmental compliance deadlines GW…
  78. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 78
    Long-term: Coal Unit Retirements Coal Retirements are a 3.7 Bcf/d Demand Opportunity In 2012, 10 GW of coal-fired capacity retired. An additional 41 GW has announced retirement from 2013-2025. Source: Encana Fundamentals, company…
  79. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 79
    North American Natural Gas Announced Industrial Expansion Expansions, new builds, restarts and relocations from 2013 to 2025 Forecast Demand Growth (3.4 Bcf/d) Propylene Potential Demand 3% (MMcf/d) Methanol 23% Ammonia…
  80. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 80
    What Makes LNG for Transportation Viable Illustrative Full Cycle Cost Components LNG vs. Diesel Sales and Refining / Excise Tax Liquefaction Retailing Feedstock Distribution Profit Margin* LNG Diesel 2.50 to 2.90/DGE 3.70…
  81. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 81
    Transforming North American Transportation Strategic with Economic Return on Infrastructure Investment Bcf/d Low Adoption Estimates High Adoption Estimates Bcf/d 7.5 7.5 5% of Fuel Market Share 10% of Fuel Market Share 5 5 2.5…
  82. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 82
    The North American Market is Responding Infrastructure Growth and Recent Industry Announcements Total NGV Station Count Industry Announcements 1,200 1030 Station Infrastructure 96 952 1,000 831 Shell/Travel Centers of America 825…
  83. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 83
    Advisory Regarding Reserves Data & Other Oil & Gas Information Disclosure Protocols National Instrument (NI) 51-101 of the Canadian Securities Administrators imposes oil and gas disclosure standards for Canadian public companies such as…
  84. JULY 2013 CORPORATE PRESENTATION – Encana Corp – slide 84
    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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