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Barclays CEO Energy Power Conference – Encana Corp

Encana Corp · Sep 7, 2012 · 86 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. Barclays CEO Energy Power Conference – Encana Corp – slide 1
    Encana Corporation Barclays CEO Energy/Power Conference Eric Marsh | Executive Vice-President, Encana Corp. & Sr. Vice-President, USA Division September 6, 2012 | New York, NY
  2. Barclays CEO Energy Power Conference – Encana Corp – slide 2
    Encana Corporation Barclays CEO Energy/Power Conference Eric Marsh | Executive Vice-President, Encana Corp. & Sr. Vice-President, USA Division September 6, 2012 | New York, NY
  3. Barclays CEO Energy Power Conference – Encana Corp – slide 3
    ? Accelerate pace of investment in oil and liquids rich natural gas plays ? Minimize dry natural gas investments ? Enhance financial strength and flexibility through multiple joint ventures and divestitures ? Continue to achieve…
  4. Barclays CEO Energy Power Conference – Encana Corp – slide 4
    4 Building Momentum 65% Two Year Liquids CAGR* 2011 2012F 2013F Capital Investment ($B) 4.6 3.5 4.0 ? 5.0 Net Divestitures ($B) 1.6 3.0 1.0 ? 1.5 Net Capital Investment ($B) 3.0 0.5 3.0 ? 3.5 Natural Gas (Bcf/d) 3.3 3.0 2.9 ? 3.1…
  5. Barclays CEO Energy Power Conference – Encana Corp – slide 5
    5 Balancing Our Operating Cash Flow Growing Contribution from Oil and NGLs 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 2011 2012F 2013F Oil NGLs Natural Gas $ Billions 2012F operating cash flow based on guidance as at June 20, 20112.…
  6. Barclays CEO Energy Power Conference – Encana Corp – slide 6
    6 ? Base capital program funded by cash flow ? Expect to achieve net divestitures of $1.0B - $1.5B ? High degree of confidence in our ability to execute joint ventures and divestitures ? Will only spend beyond cash flow once…
  7. Barclays CEO Energy Power Conference – Encana Corp – slide 7
    7 Transitioning to a More Balanced Portfolio Accelerating Pace of Development in Oil & Liquids Rich Natural Gas Plays Liquids Play Original 2012F Wells Current 2012F Wells Duvernay 5 - 10 10 Tuscaloosa 5 12 DJ Basin Niobrara…
  8. Barclays CEO Energy Power Conference – Encana Corp – slide 8
    8 Tuscaloosa Marine Shale Asset Overview Weyerhaeuser 73H-1 BOE 1H Anderson 18H-1 Anderson 17H-1 Joe Jackson 4H-2 Play Core 7.5 MMbbls/Section PIIP ECA Drilled Completed ECA 2012 Industry Drilled Industry Planned Vertical…
  9. Barclays CEO Energy Power Conference – Encana Corp – slide 9
    9 Eaglebine Asset Overview Well Name Zone Lateral Length (ft) # of Stages 30 Day IP (BOE/d)* Gresham 1H Lower Lam 5,200 18 240 Williams 1H Sand 5,400 18 164 Williams 2H Sand 6,200 21 198 Williams 3H Lower Lam 4,500 19 228…
  10. Barclays CEO Energy Power Conference – Encana Corp – slide 10
    Mississippian Lime Asset Overview Kansas Oklahoma Encana Play Outline Industry HZ Drilling Industry VT Drilling Industry HZ Permits Industry HZ Producers Industry VT Producers ECA 2012 Locations Mississippian production:…
  11. Barclays CEO Energy Power Conference – Encana Corp – slide 11
    11 San Juan Basin Asset Overview Well Name Lateral Length (ft) # of Stages 30 day IP (BOE/d) Lybrook H36 4,087 16 445 Good Times P32 4,189 17 210 Escrito P16 3,977 17 287 Meadows IO8 3,886 16 - Bisti I32 H09 3,917 17 - Good…
  12. Barclays CEO Energy Power Conference – Encana Corp – slide 12
    12 Duvernay Asset Overview Resource ? 400,000 net acres ? 97% average working interest ? PIIP*: ~8.7 billion BOE ? 50 ? 60 API oil gravity ? 1,020 ? 1,170 Btu/scf average heat content ? 1,000 ? 1,600 net well locations ? 160 ?…
  13. Barclays CEO Energy Power Conference – Encana Corp – slide 13
    13 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 Bbbls PIIP on Encana lands ?…
  14. Barclays CEO Energy Power Conference – Encana Corp – slide 14
    14 Increasing Liquids Extraction with Deep Cut Low-Risk, Low-Cost Barrels ? Planned Deep Cut expansions: ? 5,000 bbls/d at Musreau ? Q3 2012 ? 3,000 bbls/d at Gordondale ? Q4 2012 ? 12,000 bbls/d at Resthaven ? Phase 1 Q2 2014 ?…
  15. Barclays CEO Energy Power Conference – Encana Corp – slide 15
    15 $1.39 $1.38 $1.01 $0.70 $0.88 $1.39 $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Dewpoint Shallow Cut Deep Cut Natural Gas NGLs Increasing Exposure to Oil and NGLs Liquids Value Uplift C$/Mcfe* * Based on 1,100 Btu/Mcf…
  16. Barclays CEO Energy Power Conference – Encana Corp – slide 16
    Enhancing Financial Strength and Flexibility Exploring Multiple Joint Ventures and Divestitures ? Additional 10% of Cutbank Ridge Partnership ? Early life liquids portfolio joint ventures - Duvernay - Tuscaloosa Marine Shale -…
  17. Barclays CEO Energy Power Conference – Encana Corp – slide 17
    17 High Quality Asset Base Reserves and Economic Contingent Resources (ECR) (Tcfe) Reserves: P1 is proved, P2 is probable, P3 is possible Economic contingent resources: C1 is low estimate, C1+C2 is best estimate, C1+C2+C3 is high…
  18. Barclays CEO Energy Power Conference – Encana Corp – slide 18
    18 ? $1.5 billion of long term debt maturing in the next five years ? $1.8 billion of cash and short term investments at June 30, 2012; expect ~$2.5 billion by year end ? ~$5 billion of undrawn bank lines committed until 2015 ? Joint…
  19. Barclays CEO Energy Power Conference – Encana Corp – slide 19
    19 Continue to Achieve Industry Leading Cost Structures Encana - North America?s Resource Play Specialist Established history of developing resource plays from the ground up: ? From early stage identification ? Supported by…
  20. Barclays CEO Energy Power Conference – Encana Corp – slide 20
    North American Fundamentals Attractive Fundamentals Emerging for Gas, Oil & NGLs ? Natural gas prices are bottoming and will start trending to levels that are more sustainable long-term ? Natural gas demand growth from power…
  21. Barclays CEO Energy Power Conference – Encana Corp – slide 21
    Maintaining financial strength while transitioning to a more diversified portfolio Why Invest in Encana? Take A Closer Look See the Upside ? Leading North American resource play company - Exposure to natural gas - Growing exposure…
  22. Barclays CEO Energy Power Conference – Encana Corp – slide 22
    23 0 1 2 3 4 5 6 7 8 Other Jonah Texas Piceance Haynesville Bighorn CBM Horn River Greater Sierra Peace River Arch Cutbank Ridge1 2 3 1P (Proved) Reserves Evaluated by Independent Qualified Reserves Evaluators as of…
  23. Barclays CEO Energy Power Conference – Encana Corp – slide 23
    24 Comprehensive Disclosure of Reserves & Resources Largest Reserves and Resource Life in Encana?s History Encana Reserves and Resources (Tcfe) 1 Estimated reserves Estimated economic contingent resources KRP P1 Proved P2…
  24. Barclays CEO Energy Power Conference – Encana Corp – slide 24
    25 Reserves and Contingent Resources Definitions Characterization of Petroleum Initially in Place (PIIP) Reserve ? Resource Description Petroleum Resource Management System SPE ? PRMS Deve lopme nt not viable On produc tion P…
  25. Barclays CEO Energy Power Conference – Encana Corp – slide 25
    26 Leading N.A. Resource Play Company Encana Resource Play Execution Methodology Resource Play Methodology Work With Governments ? Engage Stakeholders Address Infrastructure Exploration Assemble Land Base Pilot Understand…
  26. Barclays CEO Energy Power Conference – Encana Corp – slide 26
    27 ? Implement Mitsubishi and Toyota joint ventures ? Evaluate Duvernay and other potential liquids-rich assets ? Advance liquids extraction through deep-cut midstream arrangements ? Initiate Clearwater liquids development ?…
  27. Barclays CEO Energy Power Conference – Encana Corp – slide 27
    28 5 0 10 15 20 25 30 2011 2012F 2013F Oil NGLs ? Continuing development of liquids rich plays ? Bighorn, Peace River Arch (PRA) Montney ? Advancing Duvernay appraisal ? Implementing deep cut processing ? Musreau,…
  28. Barclays CEO Energy Power Conference – Encana Corp – slide 28
    29 Peace River Arch Asset Overview Well Lateral Length (ft) # of Stages Gas (MMcf/d) Field Liquids Yield (bbls/MMcf) 10-22-78-11W6 10,600 18 6.7 41 1-5-79-11W6 7,298 14 5.8 16 9-6-79-11W6 12,900 18 5.2 103 Resource ?…
  29. Barclays CEO Energy Power Conference – Encana Corp – slide 29
    30 Bighorn Asset Overview Well Name Lateral Length (ft) # of Stages Gas (MMcf/d) Field Liquids Yield (bbls/MMcf) 09-15-060-03W6 6,000 14 8.3 45 13-14-060-03W6 4,600 13 7.6 48 Resource ? 383,000 net acres ? PIIP: 33 Tcf, 1 ?…
  30. Barclays CEO Energy Power Conference – Encana Corp – slide 30
    31 Cutbank Ridge Asset Overview Well Name Lateral Length (ft) # of Stages IP (MMcf/d) G12-31-77-15W6 8,935 12 19* *Normalized Resource ? 819,000 gross acres ? PIIP: 130 Tcf, 1 ? 2 Bbbls ? Well cost: $5 ? $10 million ? EUR per…
  31. Barclays CEO Energy Power Conference – Encana Corp – slide 31
    Clearwater Asset Overview Resource ? 4.6 million net acres ? Encana owns mineral rights on 78% of lands ? Average royalty rate of ~2% ? PIIP: 12 Tcf (CBM), 200 MMbbls Strategy ? Advance conventional oil plays ? Maintain CBM…
  32. Barclays CEO Energy Power Conference – Encana Corp – slide 32
    33 100 1000 10000 100000 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 6000 6500 Flow Time (hrs) Normalized Gas Rate (Mcf/d) Normalized Gas Rate (mcf/d) Production hours 13-8-70-9W6 Slickwater Performance Avg Well…
  33. Barclays CEO Energy Power Conference – Encana Corp – slide 33
    34 0 20 40 60 80 100 CARD. DUNV. CDTT Vertical Wells FLHR F / WLRCH A Bighorn ? Horizontal Inventory # of Wells Estimated Inventory Drilled 2012F Cardium 100 0 1 Dunvegan 165 4 6 Cadotte 130 1 0 Falher/Wilrich 260 33 16…
  34. Barclays CEO Energy Power Conference – Encana Corp – slide 34
    35 Cutbank Ridge Partnership (CRP) ? Partnership with Mitsubishi: ? Mitsubishi agreed to acquire 40% interest in the CRP undeveloped assets for C$2.9 billion ? 5 development areas: ? Saturn, Swan and Cutbank Montney ? Cutbank…
  35. Barclays CEO Energy Power Conference – Encana Corp – slide 35
    36 Montney Supply Cost Evolution Advancing Resource Play Hub Design and Development *Supply Cost is defined as the flat NYMEX price that yields a risked IRR of 9% and does not include land or G&A costs. $0.55 $0.50 $3.20 $0.63…
  36. Barclays CEO Energy Power Conference – Encana Corp – slide 36
    37 ? Aerial extent ~150km x 600km ? Montney fairway contains over 1,800 Tcf of NGIP ? ECA Montney acreage well positioned in the highest NGIP/section area. MONTNEY FAIRWAY High Montney Tight Gas Play Total Resource GR_1 0 200…
  37. Barclays CEO Energy Power Conference – Encana Corp – slide 37
    37 ? Aerial extent ~150km x 600km ? Montney fairway contains over 1,800 Tcf of NGIP ? ECA Montney acreage well positioned in the highest NGIP/section area. MONTNEY FAIRWAY High Montney Tight Gas Play Total Resource GR_1 0 200…
  38. Barclays CEO Energy Power Conference – Encana Corp – slide 38
    38 ? 5 well pilot: Improved initial rates compared to offsetting wells ? Cost reduction expected with continued optimization ? More sustainable approach to completions Gas Rate/100m (Mcf/d) Production Days Pilot Wells Offsets 60%…
  39. Barclays CEO Energy Power Conference – Encana Corp – slide 39
    39 Clearwater Business Unit Liquids Potential ? Currently evaluating more than 9 prospective oil zones ? 300 high graded oil locations identified to date ? Well cost: $1 ? $3 million ? EUR per well: 60 ? 150 Mbbls ? Oil gravity:…
  40. Barclays CEO Energy Power Conference – Encana Corp – slide 40
    40 Toyota Tsusho *Encana Joint Venture Lands with Toyota Tsusho Wheatland ? Toyota Tsusho Corporation: ? Upfront cash component of $100 million ? Provides capital funding of $502 million over 7 years: ? 1,488 drilling locations…
  41. Barclays CEO Energy Power Conference – Encana Corp – slide 41
    41 KOGAS Joint Venture Kiwigana Two Separate Deals ? Deal 1 - Signed February 26, 2010 - 38 sections - $324 million earning capital ? Earned 50% WI in April 2012 ? Deal 2 - Signed July 28, 2011 - 33 sections - $185 million…
  42. Barclays CEO Energy Power Conference – Encana Corp – slide 42
    Kitimat LNG Project ? Encana 30% Interest Diversifying Markets ? Building Demand ? Co-owners - Apache (40%, operator) - Encana (30%) - EOG (30%) ? 1,400 MMcf/d (10 MMTPA) export capacity ? Final investment decision pending -…
  43. Barclays CEO Energy Power Conference – Encana Corp – slide 43
    43 Deep Panuke Project First Natural Gas Production Forecast: Q3 2012 Operating cost ($/Mcfe) $0.95-$0.65 at 200 ? 300 MMcf/d Transportation cost ($/Mcfe) $1.68 Royalties 2% Delivery point Dracut
  44. Barclays CEO Energy Power Conference – Encana Corp – slide 44
    44 ? Advance oil and liquids-rich plays to commercial viability ? Transfer knowledge and technology from natural gas development to liquids plays ? Optimize processing contracts to capture liquids value ? Accelerate third party…
  45. Barclays CEO Energy Power Conference – Encana Corp – slide 45
    45 USA Division Emerging Liquids Portfolio ? Develop a low cost portfolio of high impact liquids plays ? Continue appraisal drilling program to assess prospectivity within existing liquids plays ? Capture additional acreage in…
  46. Barclays CEO Energy Power Conference – Encana Corp – slide 46
    46 8 6 4 2 0 10 12 14 16 18 20 2011 2012F 2013F Oil NGLs USA Division Liquids Production Profile 2012 and 2013 Liquids Strategy ? Complete appraisal and initiate commercial development of liquids portfolio ? Renegotiate…
  47. Barclays CEO Energy Power Conference – Encana Corp – slide 47
    47 Utica/Collingwood Shale Asset Overview Lake Michigan Lake Huron ECA acreage Collingwood Shale 2010 Location MI 25 miles 2011 Location 2012 Location Pioneer 1-3 Excelsior 1-25 Excelsior 1-13 Wilmot 1-21 Kendall &…
  48. Barclays CEO Energy Power Conference – Encana Corp – slide 48
    48 Oil Rate (Bbls/d) Subsurface Learnings ? Longer laterals & enhanced completions delivering improved performance ? Data sharing agreements with peers accelerating play understanding ? Flowing wells under restricted rates…
  49. Barclays CEO Energy Power Conference – Encana Corp – slide 49
    49 Eaglebine Well Performance & Key Learnings Encana average lateral length to date is 6,000? Lower Laminated Sand Subsurface Learnings ? Lower Laminated zone capable of >700 BOE/d ? Testing the impact of restricted rate…
  50. Barclays CEO Energy Power Conference – Encana Corp – slide 50
    50 Utica/Collingwood Shale Well Performance Well Name Lateral Length (ft) # of Stages 30 Day IP (MMcfe/d) Excelsior 1-25 7,500 30 5.9 Excelsior 1-13 5,300 20 2.5 Pioneer 1-3 5,000 15 2.6 Subsurface Learnings ? Reservoir…
  51. Barclays CEO Energy Power Conference – Encana Corp – slide 51
    51 10 100 1,000 0 5 10 15 20 25 30 35 40 45 50 55 60 Cumulative (Mbbls) Herren 1A-33H (Longitudinal) McConahay 1A-34H (Oblique) Frederiksen 1A-28H (Longitudinal) William Peltier 1A-20H (Oblique) Williams 3A-18H (Longitudinal)…
  52. Barclays CEO Energy Power Conference – Encana Corp – slide 52
    52 Haynesville Supply Cost Evolution 6 5 4 3 2 1 0 2008 LR 2009 LR 2010 RPH 2011 RPH 2012F ? Continuous completion design evolution ? Optimum well density ? Slowback ? Deeper longer wells ? Ultra long laterals ? Cross…
  53. Barclays CEO Energy Power Conference – Encana Corp – slide 53
    53 Haynesville Resource Play Hub Long Lateral Current Pattern 640 acre, 4,600 ft lateral Previously undeveloped setback area Planned RPH Well Lease Retention Well New Planned Pattern 1,920 acre, 7,500 ft lateral Encana Leading…
  54. Barclays CEO Energy Power Conference – Encana Corp – slide 54
    54 $0 $5 $10 $15 $20 $25 Dec- 01 Dec- 02 Dec- 03 Dec- 04 Dec- 05 Dec- 06 Dec- 07 Dec- 08 Dec- 09 Dec- 10 Dec- 11 Dec- 12 Dec- 13 Dec- 14 Dec- 15 Gas Price per MMBtu Oil Source: NYMEX oil, coal, and…
  55. Barclays CEO Energy Power Conference – Encana Corp – slide 55
    55 0% 10% 20% 30% 40% 50% 60% Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 % of Total Generation Coal Natural Gas 58 60 62 64 66 68 1997 1999 2001 2003…
  56. Barclays CEO Energy Power Conference – Encana Corp – slide 56
    56 Short-term: Coal to Gas Displacement Historical and Implied by Gas Forward Curve 8 6 4 2 0 10 12 Jan 2010 May 2010 Sep 2010 Jan 2011 May 2011 Sep 2011 Jan 2012 May 2012 Sep 2012 Jan 2013 May 2013 Sep 2013…
  57. Barclays CEO Energy Power Conference – Encana Corp – slide 57
    57 Source: Encana fundamentals, company announcements. 39 GWs of coal-fired capacity retirements have been announced equaling 4 Bcf/d of potential NG demand by 2025 Over 50 GWs of coal fired capacity are expected to ultimately…
  58. Barclays CEO Energy Power Conference – Encana Corp – slide 58
    58 -7 -6 -5 -4 -3 -2 -1 7 6 5 4 3 2 1 0 Jan 2011 Apr 2011 Jul 2011 Oct 2011 Jan 2012 Apr 2012 Jul 2012 Oct 2012 -1,000 -800 -600 -400 -200 0 200 400 600 800 1,000 Source: Encana Fundamentals, EIA Coal-to-gas…
  59. Barclays CEO Energy Power Conference – Encana Corp – slide 59
    59 0 10 20 30 40 50 60 70 80 Jan 2010 May 2010 Sep 2010 Jan 2011 May 2011 Sep 2011 Jan 2012 May 2012 Sep 2012 Jan 2013 May 2013 Sep 2013 Dry Gas Liquids Rich Gas Associated Gas EIA + Canadian Pipeline…
  60. Barclays CEO Energy Power Conference – Encana Corp – slide 60
    60 New Natural Gas Demand Creation Excellent Opportunities Diversified Across Many Sectors Bcf/d Short Term < 3 yrs Medium Term 3 to 10 yrs Long Term 10 years + Announced Retirements 1 to 2* 2 to 4 4 + Incremental Power 0 to 1 7…
  61. Barclays CEO Energy Power Conference – Encana Corp – slide 61
    61 Supply Factors ? Supply growth from liquids rich plays and oil plays alone will be insufficient to balance market requirements ? Full-cycle returns for natural gas development will need to be competitive with liquids rich and oil…
  62. Barclays CEO Energy Power Conference – Encana Corp – slide 62
    62 North American Oil Growth, Displacement and Infrastructure Investment Significant opportunities to grow North American oil production and displace imports ? We expect continued robust growth - Significant investment capital is…
  63. Barclays CEO Energy Power Conference – Encana Corp – slide 63
    63 Demand Factors ? North America is one of the lowest cost ethylene producers in the world and we expect ethane demand to thrive as a result ? Overall propane demand is expected to grow steadily as exports increase ? The heavier…
  64. Barclays CEO Energy Power Conference – Encana Corp – slide 64
    64 What Makes LNG for Transportation Viable? Illustrative Full Cycle Cost Components ? LNG vs. Diesel Sales and Excise Tax Retailing Distribution ? LNG offers 20% to 40% savings depending on region* ? LNG feed stock price is one…
  65. Barclays CEO Energy Power Conference – Encana Corp – slide 65
    65 Transforming North American Transportation Strategic with Economic Return on Infrastructure Investment 0 2.5 5 7.5 2012 2015 2018 2021 2024 2027 0 2.5 5 7.5 2012 2015 2018 2021 2024 2027 *Assumes $4.00/mcf NYMEX gas and…
  66. Barclays CEO Energy Power Conference – Encana Corp – slide 66
    66 The North American Market is Responding Infrastructure Growth and Recent Industry Announcements 38 36 44 46 1030 831 825 952 0 200 400 600 800 1,000 1,200 2008 2009 2010 2011 CNG LNG Total NGV Station Count Growth…
  67. Barclays CEO Energy Power Conference – Encana Corp – slide 67
    67 Natural Gas Fueling Projects through 2012 Paving the Way for Transportation and Operations ? Infrastructure Investment - 8 to 9 CNG stations - 1 mini liquefaction plant; additional planned - 12 mobile LNG stations - 1 fixed LNG…
  68. Barclays CEO Energy Power Conference – Encana Corp – slide 68
    68 0 10 20 30 40 50 60 70 2009 2011 2013 2015 2017 2019 Bcf/d China Korea Taiwan Singapore Thailand India Japan Forecast Source: Encana, IEA, IMF, Japan Statistics Bureau, KEEI, National Bureau of Statistics of China, Taiwan…
  69. Barclays CEO Energy Power Conference – Encana Corp – slide 69
    69 North American Proposed LNG Export Projects Kitimat T1/T2 1.4 Bcf/d 2016 Greenfield Received Regulatory Approval Approval Pending/ Not Filed Shell/Asian Consortium 1.6 Bcf/d 2020 Greenfield Progress/ PETRONAS 2 Bcf/d…
  70. Barclays CEO Energy Power Conference – Encana Corp – slide 70
    70 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 (200) (100) 0 100 200 300 400 500 600 700 800 August 2011 - March 2012 April 2012 - Present NYMEX Weekly L48 Storage Inventory Compared to Five-Year Moving Average Source: Encana…
  71. Barclays CEO Energy Power Conference – Encana Corp – slide 71
    71 2.8 0.4 3.3 0.9 -2.1 -0.4 1.0 1.1 0.8 0.6 0.7 0.9 -0.1 -0.3 0.1 0.2 -0.1 -3 -2 -1 5 4 3 2 1 0 2008 2009 2010 2011 2012 2013 Dry Gas Liquids Rich Gas Associated Gas Bcf/d Dry natural gas production is expected to…
  72. Barclays CEO Energy Power Conference – Encana Corp – slide 72
    72 0 2 4 6 8 10 12 14 16 18 20 2 $0.00 - 0.50 $0.50 - 1.00 $1.00 - 1.50 $1.50 - 2.00 $2.00 - 2.50 $2.50 - 3.00 $3.00 - 3.50 $3.50 - 4.00 $4.00 - 4.50 $4.50 - 5.00 $5.00 - 5.50 $5.50 - 6.00 >$6.00 Deliverability from One…
  73. Barclays CEO Energy Power Conference – Encana Corp – slide 73
    73 Tuscaloosa St. James (LLS) Source: Encana Fundamentals, EV maps. North American Oil Plays Oil Sands Bakken Utica SoCal Uinta San Juan Gulf of Mexico Greater Permian Wolfberry Avalon Barnett Eaglebine Greater…
  74. Barclays CEO Energy Power Conference – Encana Corp – slide 74
    74 Cushing (WTI) St. James (LLS) Keystone XL North (700) Flanagan South (585) Keystone XL MarketLink (830) Seaway Projects** (850) Trans Mountain Expansions (450) Northern Gateway (850) 10 Projects (>1,500) 2…
  75. Barclays CEO Energy Power Conference – Encana Corp – slide 75
    75 Proposed N.A. NGL Pipeline Expansion 2 MMbbls/d Slated to be Online by Mid-2014 Mont Belvieu Conway Sarnia Marcellus Western Canada Hobbs South LA East Rockies Skelly Medford Midwest Bakken West Rockies +60 +65…
  76. Barclays CEO Energy Power Conference – Encana Corp – slide 76
    76 500 700 900 1,100 1,300 1,500 1,700 2005 2007 2009 2011 2013 2015 2017 New Builds Exports Restart Conversions, Debottlenecking and Expansions Base Demand Supply Mbbls/d Source: Encana Fundamentals (outlook), EIA…
  77. Barclays CEO Energy Power Conference – Encana Corp – slide 77
    77 0 50 100 150 200 250 300 350 2005 2007 2009 2011 2013 2015 2017 Demand Expansions Demand* Supply The ethane market in Western Canada has the ability to expand to meet growing supply. Western Canadian Ethane Supply vs.…
  78. Barclays CEO Energy Power Conference – Encana Corp – slide 78
    78 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2005 2007 2009 2011 2013 2015 2017 Spare Export Capacity Exports Demand Supply (Including Imports from Canada) Propane demand is expected to grow steadily as exports…
  79. Barclays CEO Energy Power Conference – Encana Corp – slide 79
    79 0 50 100 150 200 250 2005 2007 2009 2011 2013 2015 2017 Spare Export Capacity Exports Demand Supply Western Canadian Propane Supply vs. Demand Post 2016 export capacity expansions will likely be required to meet expected…
  80. Barclays CEO Energy Power Conference – Encana Corp – slide 80
    80 9 8 7 6 5 4 3 2 1 0 10 Jan 2005 Jul 2005 Jan 2006 Jul 2006 Jan 2007 Jul 2007 Jan 2008 Jul 2008 Jan 2009 Jul 2009 Jan 2010 Jul 2010 Jan 2011 Jul 2011 Jan 2012 Jul 2012 Jan 2013 Jul 2013 Gulf of…
  81. Barclays CEO Energy Power Conference – Encana Corp – slide 81
    81 The Evolving NGL Barrel Ethane (C2) 37% Propane (C3) 29% Butanes (C4) 18% Pentanes (C5+) 16% Ethane (C2) 42% Propane (C3) 28% Butanes (C4) 17% Pentanes (C5+) 13% 2001 NGL Barrel NGL Barrel 2011 NGL Barrel 2015F* Ethane…
  82. Barclays CEO Energy Power Conference – Encana Corp – slide 82
    82 2012 U.S. GAAP Conversion ? Encana has adopted U.S. GAAP for 2012 financial reporting ? Previously followed Canadian GAAP/IFRS, with annual U.S. GAAP reconciliations ? Why convert? ? Improves comparability of financial results…
  83. Barclays CEO Energy Power Conference – Encana Corp – slide 83
    83 APA EOG DVN ECA TLM NXY APC SWN CHK Credit Rating Comparison As of May 31, 2012 - Indicates ratings below investment grade S&P Moody?s AAA Aaa AA+ Aa1 AA Aa2 AA- Aa3 A+ A1 A A2 A- A3 BBB+ Baa1 BBB Baa2 BBB- Baa3 BB+…
  84. Barclays CEO Energy Power Conference – Encana Corp – slide 84
    84 2012 U.S. GAAP Conversion Cash Flow & Operating Earnings ($ millions) $0 $200 $400 $600 $800 $1,000 $1,200 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 U.S. GAAP - Cash Flow U.S. GAAP - Operating Earnings IFRS -…
  85. Barclays CEO Energy Power Conference – Encana Corp – slide 85
    85 Refocusing Capital Allocation Rapid Transition to Liquids Focused Investments 0 0.5 1 1.5 2 2.5 3 2011 2012F 2013F Oil Liquids Rich Natural Gas Natural Gas Represents upstream capital only. 2013 based on mid-point or $4.0 -…
  86. Barclays CEO Energy Power Conference – Encana Corp – slide 86
    Operating Costs ($ millions) Upstream Operating Costs (5) 775 Administrative Expense 400 $0.05 decrease in the U.S./Canadian dollar exchange rate 0 130 $10/bbl increase in the WTI oil price 65 50 $0.50/Mcf increase in the NYMEX…

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