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July 2014 Investor Presentation – Encana Corp

Encana Corp · Jul 4, 2014 · 21 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 2014 Investor Presentation – Encana Corp – slide 1
    EXECUTING ON STRATEGY Encana Corporation Corporate Presentation July 2014
  2. July 2014 Investor Presentation – Encana Corp – slide 2
    Year To Date Highlights EXECUTING ON STRATEGY Operational Excellence YTD costs savings of $100 million from organizational realignment and operating efficiencies Delivered 49% liquids growth YTD 2014 vs. YTD 2013 Growth plays…
  3. July 2014 Investor Presentation – Encana Corp – slide 3
    Focusing Our Business RAPID PORTFOLIO TRANSITION CONTINUES ? A&D activity has accelerated the strategy and sharpened our focus ? Replacing natural gas production with high-margin liquids ? Addition of Eagle Ford as 6th growth play ?…
  4. July 2014 Investor Presentation – Encana Corp – slide 4
    Q2 In Review STRATEGY DELIVERING ON PLAN Q2 2013 Q2 2014 % Ch Upstream Operating Cash Flow ($MM) Excluding Hedging 737 898 22 Including Hedging 788 800 2 Total Cash Flow ($MM) 665 656 (1) - $ per share, diluted 0.90 0.89 (1)…
  5. July 2014 Investor Presentation – Encana Corp – slide 5
    Cash Flow & Cost Improvements KEY OPERATIONAL DRIVERS ? YTD 2014 ? Focus on operational excellence ? Base production continues to perform better than expected ? Expect to reduce 2014 base decline from ~28-30% to ~26% ? Increase in…
  6. July 2014 Investor Presentation – Encana Corp – slide 6
    ? 2014F capex + dividends aligned with cash flow ? Expect ~$500 million free cash flow* in 2014 ? Investment grade credit rating ? $2.7 billion of cash and cash equivalents as at June 30, 2014 ? Bighorn divestiture of $1.8 billion…
  7. July 2014 Investor Presentation – Encana Corp – slide 7
    Updated 2014 Guidance GENERATING FREE CASH FLOW IN 2014 2014F Total Cash Flow ($B) 3.4 ? 3.6 - per common share, diluted ($/sh) $4.59 ? 4.86 Capital Investment ($B) 2.7 ? 2.8 Natural Gas (MMcf/d) 2,400 ? 2,500 Oil & Field…
  8. July 2014 Investor Presentation – Encana Corp – slide 8
    Oil & NGL Volumes (Mbbls/d) Natural Gas Volumes (MMcf/d) Revised 2014 Production Guidance 0 10 20 30 40 50 60 70 80 90 100 Original Guidance Divestitures Closed at Q2 Eagle Ford Other Revised Guidance 0 500 1,000…
  9. July 2014 Investor Presentation – Encana Corp – slide 9
    Operational Update ? Strong YTD operational performance across the portfolio ? Type curve performance meeting or exceeding expectations ? YTD 2014 netbacks up 84% (excluding hedges) compared to 2013 (43% including hedges) ? Lower…
  10. July 2014 Investor Presentation – Encana Corp – slide 10
    Eagle Ford ? Acquisition closed on June 20th with 2 rigs running ? 2014F capital of $300 ? $320 million ? 2014F production of 22,000 boe/d (annualized) ? ~ 85% liquids ? Development plan to maximize free cash flow* ? $200 - $250…
  11. July 2014 Investor Presentation – Encana Corp – slide 11
    Montney ? Continued success with high intensity completions in Cutbank Ridge ? 7 high-intensity completions wells brought on in Q2 with 30 day IPs of 12-14 MMcf/d; ~100% above prior type curve ? Higher than expected liquid yields ?…
  12. July 2014 Investor Presentation – Encana Corp – slide 12
    DJ Basin ? YTD drilling cycle times averaging 3 days faster than expectations ? Drilled first 7-day spud-to-rig release 4,150 ft. well ? Successfully drilled 3rd 10,000 ft. lateral well ? Added second completions crew in May ?…
  13. July 2014 Investor Presentation – Encana Corp – slide 13
    San Juan ? Advancing efficient commercial development ? YTD production and capital are in line with expectations ? Continuing to further delineate acreage ? Consistent well performance at or above expectations ? 30 day IPs of 400 -…
  14. July 2014 Investor Presentation – Encana Corp – slide 14
    Duvernay ? Currently drilling on three 8-well pads in the Kaybob/Simonette area ? Completions commencing in Q3 ? 10 high-intensity-completions wells meeting or exceeding type curve expectations ? 30 day IPs averaging ~1,300 boe/d ?…
  15. July 2014 Investor Presentation – Encana Corp – slide 15
    Tuscaloosa Marine Shale ? Demonstrating achievement of type curve across Tier 1 acreage ? Wells drilled YTD 2014 generally meeting normalized type curve expectations ? Cost improvements continue to be achieved ? Mathis and Lewis wells…
  16. July 2014 Investor Presentation – Encana Corp – slide 16
    Focus across all fields on base optimization projects to offset PDP declines ? Haynesville re-frac program ? Excellent results from 2 wells completed to date ? IPs up to 100% higher than expectations ? 5 additional wells planned for…
  17. July 2014 Investor Presentation – Encana Corp – slide 17
    Key 2014 Deliverables ? Disciplined and focused capital program ? Targeting 75% of 2014 capex allocated to growth assets ? Pre-hedge upstream operating cash flow expected to be up ~70% year over year ? Accelerate high-margin growth…
  18. July 2014 Investor Presentation – Encana Corp – slide 18
    Focused on Growing Value, not Volumes GROWTH ASSETS DELIVER HIGHER MARGINS THAN BASE IN 2014 PRODUCTION TIME $3.40/ Mcfe $5.75/ Mcfe Replacing lower margin production with higher margin production from five growth assets 2014F…
  19. July 2014 Investor Presentation – Encana Corp – slide 19
    Disciplined Focus on Profitable Growth VISION: Leading North American oil and gas resource play company ? High quality rocks ? Scale and running room ? Operational excellence ? Portfolio optionality STRATEGY: Disciplined focus on…
  20. July 2014 Investor Presentation – Encana Corp – slide 20
    2014F ENCANA CORPORATE GUIDANCE US$, U.S. GAAP July 24, 2014 2014F Cash Flow ($ billions, except per share amount) Total Cash Flow (1)(2) 3.4 ? 3.6 - Per common share, diluted ($/share) 4.60 ? 4.85 Weighted average common shares…
  21. July 2014 Investor Presentation – Encana Corp – slide 21
    Operating Costs ($/Mcfe at 6:1 ratio) Upstream Operating Expense (3) 0.65 Transportation and Processing 1.40 Administrative Expense (3) 0.25 Depreciation, Depletion and Amortization Rate (4) 1.50 2014 Sensitivities (1) ($ millions)…

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