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Encana January 2016 Presentation – Encana Corp

Encana Corp · Jan 25, 2016 · 26 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. Encana January 2016 Presentation – Encana Corp – slide 1
  2. Encana January 2016 Presentation – Encana Corp – slide 2
    2 2016 STRATEGIC OBJECTIVE Disciplined Focus on Profitable Growth ? Significant flexibility to adjust capital in 2016 ? Over 90% of capex is discretionary with minimal supply chain commitments ? Continuing to drive efficiencies…
  3. Encana January 2016 Presentation – Encana Corp – slide 3
    3 2016: FOCUS ON THE CORE FOUR Generating Quality Returns Core Four Total Production (Permian, Eagle Ford, Duvernay & Montney) ? Expect core four to maintain scale at ~270 MBOE/d ? ~12% y-o-y growth ? 2016F program is load-leveled…
  4. Encana January 2016 Presentation – Encana Corp – slide 4
    4 SUSTAINABLE BUSINESS MODEL THROUGH THE CYCLE 2016F Total Cash Flow ($B) 1.0 ? 1.2 Capital Investment ($B) 1.5 ? 1.7 Natural Gas (MMcf/d) 1,300 ? 1,400 Total Liquids (Mbbls/d) 120 ? 140 Total Production (MBOE/d) 340 ? 370 Core…
  5. Encana January 2016 Presentation – Encana Corp – slide 5
    7 2016 ASSET HIGHLIGHTS Focus On Highest Margin Assets PERMIAN ? Growing today and in the future ? Longer laterals and more wells per pad to drive efficiency ? Reduced land retention vertical program ? D&C target: $5.9 MM/well ?…
  6. Encana January 2016 Presentation – Encana Corp – slide 6
    8 PERMIAN High Quality Resource ? Top tier asset ? Acreage situated in northern/central sweet spot of the Midland Basin ? Heavily weighted to liquids (~80% of production) ? Stacked resource potential ? Productive intervals…
  7. Encana January 2016 Presentation – Encana Corp – slide 7
    9 PERMIAN Driving Quality Returns ? Top tier operator after less than a year ? Culture of innovation and operating excellence ? Production up 50% from acquisition ? Enhancing capital efficiency ? Achieving 10 fracs / day ?…
  8. Encana January 2016 Presentation – Encana Corp – slide 8
    10 PERMIAN ? 2016 PROGRAM Continue to grow production ? Grow production with 3-5 horizontal rigs ? Maintain land position through vertical drilling program ? Focus on the best rock ? D&C cost target* of $5.9 MM/well FY 2016 Plan…
  9. Encana January 2016 Presentation – Encana Corp – slide 9
    11 PERMIAN Key Modeling Statistics Glasscock Howard A Martin Midland/Upton Wolfcamp A Wolfcamp B Wolfcamp A Lower Spraberry Wolfcamp B Wolfcamp A Wolfcamp B Wolfcamp C IP30 (bbls/d) 950 700 875 900 800 775 900 725 EUR/Well (MBOE)…
  10. Encana January 2016 Presentation – Encana Corp – slide 10
    12 EAGLE FORD Core Position in a Premier Oil Play ? Largely contiguous position in the Karnes Trough ? Most active and profitable trend in the Eagle Ford ? Heavily weighted to liquids (85% of production) ? Well inventory…
  11. Encana January 2016 Presentation – Encana Corp – slide 11
    13 EAGLE FORD A Great Asset Continues to Outperform ? Cost reduction achievements ? 33% decrease in D&C costs since acquisition ? Completion days dropped 42% to 3.5 days/well ? Production growth ? 33% increase in production since…
  12. Encana January 2016 Presentation – Encana Corp – slide 12
    14 ? Maintaining production 50-60 MBOE/d ? Enhancing well inventory ? Optimizing completion design for Graben wells ? Confirm chevron downspacing for undeveloped acreage ? Uphole potential ? Upper Eagle Ford results in 2016 ? D&C…
  13. Encana January 2016 Presentation – Encana Corp – slide 13
    15 EAGLE FORD Key Modeling Statistics Kenedy Panna Maria Graben IP30 (bbls/d) 930 875 780 EUR/Well (MBOE) 800 ? 900 500 ? 620 400 ? 500 D i (decline factor)* 80 81 80 b-factor* 1.2 1.2 0.9 Average Lateral Length (ft.) 5,000 5,000…
  14. Encana January 2016 Presentation – Encana Corp – slide 14
    16 DUVERNAY Premier Position in World Class Reservoir ? Encana holds 1/3 of high-graded liquids fairway in the play ? Core fairway in Simonette ? Some of the highest EUR wells in North America* ? Liquids-rich gas and condensate…
  15. Encana January 2016 Presentation – Encana Corp – slide 15
    17 DUVERNAY High Rate Wells Generating Quality Returns ? Industry-leading operating efficiencies ? Dual rig/dual frac crews per pad ? Water and road infrastructure allowing for year-round operations ? Innovation at work ? Reducing…
  16. Encana January 2016 Presentation – Encana Corp – slide 16
    18 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…
  17. Encana January 2016 Presentation – Encana Corp – slide 17
    19 DUVERNAY ? 2016 PROGRAM Moving Along the Development Curve ? Drill to fill in 2016 ? Equally weighted program between North and South Simonette ? 10-29 Plant phase 1 start up in Q1 2016 ? 10,000 bbls/d and 50 MMcf/d gross…
  18. Encana January 2016 Presentation – Encana Corp – slide 18
    20 DUVERNAY Key Modeling Statistics Condensate Gas Ratio 65 ? 150 bbls/MMcf Condensate Gas Ratio 150 ? 250 bbls/MMcf IP30 (MMcf/d) 6 ? 8 5 ? 6.5 EUR/Well (MBOE) 1,200 ? 1,600 1,000 ? 1,400 Condensate Yields (bbl/MMcf) 65 ? 150…
  19. Encana January 2016 Presentation – Encana Corp – slide 19
    21 MONTNEY A Premier North American Play ? Large contiguous land position ? Encana acreage in most proven region of the fairway ? Massive running room and scale ? Diverse product mix ? ~5,000 horizontal well inventory ? >1,500 oil…
  20. Encana January 2016 Presentation – Encana Corp – slide 20
    22 MONTNEY Decades of Low Cost Inventory 0 25 50 2016 2017 2018 Liquids Mbbls/d 0.0 0.4 0.8 1.2 2016 2017 2018 Bcf/d Gas Accelerating Liquids Growth Basin Extent ~58,000 mi2 ~47,000 mi2 Multi Layer Development ~980?…
  21. Encana January 2016 Presentation – Encana Corp – slide 21
    23 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 ?…
  22. Encana January 2016 Presentation – Encana Corp – slide 22
    24 MONTNEY ? 2016 PROGRAM Focus On Oil and Liquids Development ? Fill existing infrastructure to maintain production ? Development focused in the liquids rich zones and acreage ? Maintain highest quality land position in Alberta ?…
  23. Encana January 2016 Presentation – Encana Corp – slide 23
    25 MONTNEY Key Modeling Statistics Tower Saturn Dawson South IP30 (MMcf/d) 4 - 9 10 - 14 7 - 14 EUR/Well (Bcfe) 15 ? 19 12 ? 20 13 ? 19 EUR/Well (MBOE) 1,630 ? 2,130 1,400 ? 3,000 2,000 ? 3,200 Condensate Yield (bbls/MMcf) 30 ? 90…
  24. Encana January 2016 Presentation – Encana Corp – slide 24
    28 PRUDENT FINANCIAL MANAGEMENT Debt Portfolio as at September 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…
  25. Encana January 2016 Presentation – Encana Corp – slide 25
    30 HEDGING PROGRAM Adds Greater Certainty to Cash Flow Hedge positions as at December 14, 2015 *The WTI Fixed Price Swaptions give the counterparty the option to extend fourth quarter 2015 fixed price swaps to the first quarter of…
  26. Encana January 2016 Presentation – Encana Corp – slide 26
    31 LIQUIDS VALUE CHAIN Projected Composition of Total Liquids Production 2016F based on company guidance as at December 14, 2015, assuming US$50.00 WTI Oil and US$2.75 MMBtu NYMEX Gas *Includes plant condensate Liquids primarily…

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