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October 2015 Investor Presentation – Encana Corp

Encana Corp · Oct 12, 2015 · 40 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. October 2015 Investor Presentation – Encana Corp – slide 1
    Cover Slide
  2. October 2015 Investor Presentation – Encana Corp – slide 2
    1 1 ? Four strategic assets expected to deliver rates of return >30% ? ~80% of capital to Permian, Eagle Ford, Duvernay & Montney Executing a disciplined capital program ? Expect to reduce net debt by ~$2 billion in 2015 ? Fully funded…
  3. October 2015 Investor Presentation – Encana Corp – slide 3
    HIGH QUALITY ASSET BASE Focused on Four Strategic Assets *2015F operating margins based on year-to-date actuals as at June 30th plus flat commodity price assumptions of $50/bbl WTI and $3.00/MMBtu NYMEX for the remainder of the year.…
  4. October 2015 Investor Presentation – Encana Corp – slide 4
    POSITIONED FOR GROWTH BEYOND 2015 Permian + Eagle Ford + Duvernay + Montney On track to achieve 270,000 BOE/d in Q4 from four strategic assets position for growth beyond 2015 permian + eagle ford + duvernay +…
  5. October 2015 Investor Presentation – Encana Corp – slide 5
    FOUR STRATEGIC ASSETS OFFER >12,000 LOCATIONS Oil & Condensate NGL (C2-C4) Gas 2015 production composition (%) PERMIAN 5,000 DUVERNAY* MONTNEY* EAGLE FORD ~5,000 ~5,000 ~620 ~1,400 *Encana condensate in Montney & Duvernay…
  6. October 2015 Investor Presentation – Encana Corp – slide 6
    3 5 FOCUSED CAPITAL PROGRAM ~80% of 2015 Capital Allocated to Four Strategic Assets 6 STRONG OPERATING MARGINS AT TODAY?S PRICES Assets - Permian, Eagle Ford & Duvernay Gas-Weighted Asset -  Montney Permian Eagle Ford Montney…
  7. October 2015 Investor Presentation – Encana Corp – slide 7
    STRONG OPERATING MARGINS AT TODAY?S PRICES Investing In Profitable Growth - 0.50 1.00 1.50 2.00 2.50 - 5 10 15 20 25 30 35 40 1Q15A 2Q15A 3Q15F 4Q15F Oil-Weighted Asset Operating Margin ($/BOE) 1Q & 2Q operating margins are actuals.…
  8. October 2015 Investor Presentation – Encana Corp – slide 8
    FINANCIAL POSITIONING Expect To Reduce Net Debt by ~$2 Billion in 2015 *Expected to close 4Q15; **$3.1 billion available under bank credit facilities as of July 16th due to outstanding commercial paper balances ? Committed to maintaining…
  9. October 2015 Investor Presentation – Encana Corp – slide 9
    PERMIAN High Quality Resource and Long Term Growth Engine ? Stacked resource potential ? Low risk, high margin inventory ? 2015 HZ program focused on Wolfcamp A, B,C and Lower Spraberry Glasscock Howard Martin Midland Upton Middle…
  10. October 2015 Investor Presentation – Encana Corp – slide 10
    PERMIAN 2015 Program ? Focused on optimizing well performance, capital efficiency, supply chain consolidation, developing midstream & marketing plan ? Horizontal program to integrate RPH* model into operations ? Better well design,…
  11. October 2015 Investor Presentation – Encana Corp – slide 11
    PERMIAN Strong Well Performance and Cost Reductions *Normalized to 7,500 ft. lateral length ? August production at ~45 MBOE/d ECA Midland County Performance (Wolfcamp B) ? 26% production growth since 2Q15 ? 31 HZ wells expected to come on…
  12. October 2015 Investor Presentation – Encana Corp – slide 12
    PERMIAN Inventory and Well Performance County Gross HZ Inventory Targeted Zones 1H15 Gross Wells Vert./HZ 2015 Gross Wells Vert./HZ Inventory Type Curve EUR (MBOE) Glasscock 1,360 WC A & B 12 / 9 17 / 16 600 ? 1,000 Howard 685 WC A 22 / 9…
  13. October 2015 Investor Presentation – Encana Corp – slide 13
    PERMIAN ? CURRENT PROGRAM Key Modeling Statistics *Di factor & b-factor for use with Arps? decline equation. Glasscock Howard A Martin Midland/Upton Wolfcamp A Wolfcamp B Wolfcamp A Lower Spraberry Wolfcamp B Wolfcamp A Wolfcamp B…
  14. October 2015 Investor Presentation – Encana Corp – slide 14
    8 15 PERMIAN BASIN MARKET FUNDAMENTALS Close Proximity to Market, Extensive Infrastructure in Place ? Well-developed transportation network ? Pipeline expansions have alleviated basin export constraints ? Permian differentials have…
  15. October 2015 Investor Presentation – Encana Corp – slide 15
    EAGLE FORD Core Position in a Premier Oil Play ? Largely contiguous position in the Karnes Trough ? Core of the core of the Eagle Ford ? Acreage primarily lies in the condensate / volatile oil window ? Most active and profitable trend in…
  16. October 2015 Investor Presentation – Encana Corp – slide 16
    EAGLE FORD 2015 Program Upper and Lower Eagle Ford Stacking Patterns Austin Chalk + Eagle Ford Austin Chalk + Eagle Ford and Buda ? Increasing Inventory ? Position Encana to be among the best operators in the play ? Decrease well costs by…
  17. October 2015 Investor Presentation – Encana Corp – slide 17
    EAGLE FORD Significant Value Additions Since Acquisition * D&C to 5,000? lateral length ** Excludes ~70 HZ drilled to date since acquisition Base Decline Production D&C Cost* Well Inventory Type Curve EUR Acquisition May 2014 ~40% 43…
  18. October 2015 Investor Presentation – Encana Corp – slide 18
    EAGLE FORD Better Wells, Lower Costs and Increasing Inventory 8.0 7.4 6.7 5.7 1.6 5.4 1.5 1.3 1.1 1.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 0 2 4 6 8 10 Pre-ECA 4Q14 1Q15 2Q15 Aug\'15 $MM/1,000? $MM D&C* D&C/1,000\' Drilling and Completions Costs*…
  19. October 2015 Investor Presentation – Encana Corp – slide 19
    EAGLE FORD Inventory and Well Performance Kenedy Area / PTS Graben Kenedy Panna Maria Type Curve Areas Gross Inventory 1H15 Gross Wells 2015 Gross Wells Inventory Type Curve EUR (MBOE) Kenedy PTS 120 30 41 800 - 900 Graben 300 7 7 400 -…
  20. October 2015 Investor Presentation – Encana Corp – slide 20
    11 21 EAGLE FORD ? CURRENT PROGRAM Key Modeling Statistics Note: Oil gravity 42 - 55 API, heat content 1,300 Btu/scf Kenedy Panna Maria Graben Gross Inventory (#) 120 200 300 Gross 2015 Wells (#) 41 22 7 WI % 100 98 98 IP30 (bbls/d) 930…
  21. October 2015 Investor Presentation – Encana Corp – slide 21
    DUVERNAY Premier Position in World Class Reservoir ? Massive resource ? Estimated total resource of 443 Tcf gas, 11.3 Bbbls NGLs, 61.7 Bbbls oil (source: AER: AGS Open File Report October 2012; medium case) ? Huge potential growth engine…
  22. October 2015 Investor Presentation – Encana Corp – slide 22
    12 23 DUVERNAY 2015 Program 2015 Rig Count 2015 Rig Release 2015 Wells on Stream 2015 Capital Q4 Production 2 ? 3 14 ? 18 20 ? 25 $200 ? 250MM 17 MBOE/d ? Significant well cost reductions ? Some of the highest EUR wells in North America*…
  23. October 2015 Investor Presentation – Encana Corp – slide 23
    DUVERNAY Driving Down Costs Repeated Cost Improvement ? Reducing drilling days ? Since 2013, wells are drilled 41% faster ? ~$3MM/well savings ? Primary drivers include casing design, bottom-hole assembly, bit selection, and pad drilling…
  24. October 2015 Investor Presentation – Encana Corp – slide 24
    13 25 DUVERNAY Impressive Well Performance 14-20 & 12-? Average August production at ~9.4 MBOE/d 06 Pad Performance Updates ? 62% production growth since 2Q15 ? 15-31 Phase 2 started up in July (18 MBOE/d gross) ? Strong well performance…
  25. October 2015 Investor Presentation – Encana Corp – slide 25
    DUVERNAY Inventory and Well Performance Simonette Q2 Well Performance Most Recent Well Performance 14-20 Pad 06-16 02/06-16 12-06 Pad 4-13 02/16-11 Simonette North Simonette South Note: Inventory based on 125 acre spacing, EUR based on…
  26. October 2015 Investor Presentation – Encana Corp – slide 26
    14 27 DUVERNAY ? CURRENT PROGRAM Key Modeling Statistics Note: Condensate gravity 52 API, heat content 1,270 Btu/scf Condensate Gas Ratio 65 ? 150 bbls/MMcf Condensate Gas Ratio 150 ? 250 bbls/MMcf Gross Inventory (#) 150 400 Gross 2015…
  27. October 2015 Investor Presentation – Encana Corp – slide 27
    DUVERNAY JOINT VENTURE ? Brion (formerly Phoenix, a subsidiary of PetroChina) agreed to invest C$2.18 billion for 49.9% working interest ? C$1.18 billion up front cash in 2012 ? Further investment of C$1.0 billion during the commitment…
  28. October 2015 Investor Presentation – Encana Corp – slide 28
    MONTNEY Decades of Low Cost Inventory ? Massive running room and scale ? Potential of >2 Bcf/d and >50,000 bbls/d on Encana lands ? >25 years of drilling inventory ? Large contiguous core land positions ? Encana acreage in most proven…
  29. October 2015 Investor Presentation – Encana Corp – slide 29
    MONTNEY 2015 Program 2015 Rig Count 2015 Rig Release 2015 Wells on Stream 2015 Capital Q4 Production 2 ? 3 15 ? 25 40 ? 50 $220 - $280MM 146 MBOE/d Water Resource Hub ? Development focus in liquids rich region ? Maximize well…
  30. October 2015 Investor Presentation – Encana Corp – slide 30
    MONTNEY Premier play in North America *Encana Data **Data Source: various public reports (ITG Investment Research, IHS, Investor Presentations: Range, Cabot, SWN) ***BTax IRR: ECA $50 Oil / $3.00 Gas & Core Marcellus $55 Oil / $3.00 Gas…
  31. October 2015 Investor Presentation – Encana Corp – slide 31
    MONTNEY Inventory and Well Performance High rate gas well performance (4 wells) ? Average August production at ~145 MBOE/d ? 7% production growth since 2Q15 ? Condensate rich wells ? 13-16 Pad (4 wells) and 04-14 pad (4 wells) ? Wells…
  32. October 2015 Investor Presentation – Encana Corp – slide 32
    MONTNEY Inventory and Well Performance Impact of High Intensity Frac to IP and EUR Montney Liquids Growth Outlook 0 3,000 6,000 9,000 12,000 15,000 0 200 400 600 800 1,000 Normalized Well Gas Rate(Mcf/d) Days Slickwater Reduced Cluster…
  33. October 2015 Investor Presentation – Encana Corp – slide 33
    MONTNEY ? CURRENT PROGRAM Key Modeling Statistics Tower Saturn Dawson South Gross Inventory (#) 600 1945 1755 Gross 2015 Wells (#) 9 10 4 WI% 60 60 60 IP30 (MMcf/d) 5 -7 10 - 14 7 - 14 EUR/Well (Bcfe) 15 ? 19 12 ? 20 13 ? 19 EUR/Well…
  34. October 2015 Investor Presentation – Encana Corp – slide 34
    MONTNEY Cutbank Ridge Partnership (CRP) ? Partnership with a subsidiary of Mitsubishi ? Encana: 60% interest ? Mitsubishi: 40% interest ? Development areas ? Montney: Tower, Dawson North, Dawson South and Tumbler Ridge ? Cadomin ?…
  35. October 2015 Investor Presentation – Encana Corp – slide 35
    DJ BASIN, SAN JUAN, TMS Key Statistics DJ Basin San Juan TMS Land (net acres): 51,000 206,000 200,000 Average working interest: 37% 58% 60% RPH type curve EUR/well: 540 ? 840 Mboe 400 ? 600 MBoe 600 ? 700 MBoe Well inventory (gross):…
  36. October 2015 Investor Presentation – Encana Corp – slide 36
    DEMONSTRATING RESULTS AT TODAY?S PRICES Better Wells, Lower Costs, Increasing Inventory ? Achieving strong well performance across the 4 strategic assets ? Permian IP rates of >1,000 bbls/d oil ? Eagle Ford Graben IP rate of 1,300 bbls/d…
  37. October 2015 Investor Presentation – Encana Corp – slide 37
    BUILDING MOMENTUM FOR 2H 2015 Q2 In Review Q2 2015 YTD 2015 Upstream Operating Cash Flow** Excluding Realized Hedging ($MM) 315 769 Upstream Operating Cash Flow** Including Realized Hedging ($MM) 479 1,181 Total Cash Flow ($MM) 181 676 -…
  38. October 2015 Investor Presentation – Encana Corp – slide 38
    ON TRACK TO MEET 2015 GUIDANCE 2015F Total Cash Flow ($B) 1.4 ? 1.6 - per common share, diluted ($/sh) 1.70 ? 1.95 Weighted Average Common Shares Outstanding ? diluted* (millions) 821 Capital Investment ($B) 2.0 ? 2.2 Natural Gas (MMcf/d)…
  39. October 2015 Investor Presentation – Encana Corp – slide 39
    PRUDENT FINANCIAL MANAGEMENT Debt Portfolio as at June 30, 2015 * Excludes outstanding CP balance 0 250 500 750 1,000 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038…
  40. October 2015 Investor Presentation – Encana Corp – slide 40
    Liquids Value Chain Projected Composition of Total Liquids Production Canada US 2015F 2015F Pricing 2015F 2015F Pricing (Mbbls/d) (%WTI) (Mbbls/d) (%WTI) Oil and Condensate* Butane Propane Ethane Liquids primarily composed of…

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