ENCANA CORPORATION Q4 2015 Results Conference Call February 24, 2016
DELIVERING QUALITY RETURNS WHILE PRESERVING VALUE Substantially reduced debt in 2015 Beat Q4 2015 production target in core four assets 274 MBOE/d Delivered significant cost reductions across the business in 2015 Asset quality…
STRENGTHENING THE BUSINESS Decisive Steps to Manage Through the Commodity Cycle Achieved Targeting 20% C1.44B 400MM in opex equity issue Early 1.3B Increased and capital and Expect 2016 reduction over Additional debt extended 4.5B…
PRUDENT FINANCIAL MANAGEMENT Debt Portfolio as at December 31, 2015 Debt reduced by 2.0 billion in 2015 Reduced future interest expense Financial flexibility with no debt maturities until 2019 75% of long-term debt not due until 2030…
ENCANA CREDIT FACILITIES Access to Significant Liquidity Through 2020 4.5 billion fully committed, unsecured, revolving ECA Ratio Well Within Covenant Threshold Debt to Adjusted Capitalization Ratio credit facilities Renewed in 2015…
BUILDING MOMENTUM IN 2H 2015 Q4 2015 Q3 2015 FY 2015 Upstream Operating Cash Flow* Q4 Highlights Excluding Hedging (MM) 261 314 1,344 Strong production from core four assets Upstream Operating Cash Flow* 552 531 2,264 Including…
Q4 2015 ASSET HIGHLIGHTS Focus On Highest Margin Assets BEAT CORE FOUR Q4 TARGET: 274 MBOE/D PERMIAN EAGLE FORD DUVERNAY MONTNEY FY D&C Cost Reduction 30% 35% 30% 9% FY Drill Cycle Time Improvement 30% 15% 35% 10% Average Q4 D&C…
EXERCISING CAPITAL DISCIPLINE 55% Reduction to 2016 Capital Program Capex reduction aligns activity levels with lower price environment 900 million - 1.0B total capital 40% reduction in capital from previous guidance 95% focused on…
2016 ASSET HIGHLIGHTS Focus On Highest Margin Assets Development focus in the Midland/Martin/Upton Rigs: 3 (Hz), 1 (Vt) PERMIAN Longer laterals and more wells per pad to drive efficiency D&C target: 5.7 MM/well Reduced vertical…
FURTHER COST REDUCTIONS Quarterly Costs MM 250 Building On Our Track Record G&A* Interest Expense** 200 Cost structure lower by 550 million versus 2015 150 Includes 200-250 million of new cost reductions 100 versus original 2016…
PRESERVING VALUE IN A LOWER PRICE ENVIRONMENT Revised 2016 Guidance Allocating capital to deliver highest returns 2016F and preserving asset value even at low Capital Investment (B) 0.9 1.0 prices Incremental 50 million of cash flow…
DELIVERING QUALITY RETURNS WHILE PRESERVING VALUE 2016 capital allocated to deliver quality returns Balance sheet and financial flexibility remain a priority Continuing to meaningfully reduce costs Asset quality and innovation…
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