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March 2016 Investor Presentation – Encana Corp

Encana Corp · Mar 21, 2016 · 29 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. March 2016 Investor Presentation – Encana Corp – slide 1
  2. March 2016 Investor Presentation – Encana Corp – slide 2
    2 STRENGTHENING THE BUSINESS Decisive Steps to Manage Through the Commodity Cycle Reduced 2015 capital by 25% Planned $300MM in capital cost efficiencies & $75MM in direct opex efficiencies for 2015 Sale of Wheatland for…
  3. March 2016 Investor Presentation – Encana Corp – slide 3
    3 PRUDENT FINANCIAL MANAGEMENT Debt Portfolio as at December 31, 2015 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…
  4. March 2016 Investor Presentation – Encana Corp – slide 4
    4 36% 30% 28% 0% 10% 20% 30% 40% 50% 60% 70% 80% YE 2013 YE 2014 YE 2015 ? $4.5 billion fully committed, unsecured, revolving credit facilities ? Renewed in 2015 and committed to July 2020 ? $3.85 billion available at…
  5. March 2016 Investor Presentation – Encana Corp – slide 5
    5 EXERCISING CAPITAL DISCIPLINE 55% Reduction to 2016 Capital Program ? Capex reduction aligns activity levels with lower price environment ? $900 million - $1.0B total capital ? 40% reduction in capital from previous guidance ? 95%…
  6. March 2016 Investor Presentation – Encana Corp – slide 6
    6 PRESERVING VALUE IN A LOWER PRICE ENVIRONMENT 2016F Capital Investment ($B) 0.9 ? 1.0 Natural Gas (MMcf/d) 1,300 ? 1,400 Total Liquids (Mbbls/d) 120 - 130 Total Production* (MBOE/d) 340 - 360 Production, Mineral & Other Taxes…
  7. March 2016 Investor Presentation – Encana Corp – slide 7
    7 FURTHER COST REDUCTIONS Building On Our Track Record ? Cost structure lower by ~$550 million versus 2015 ? Includes $200-250 million of new cost reductions versus original 2016 guidance: ? T&P expense down ~$75-125 million ?…
  8. March 2016 Investor Presentation – Encana Corp – slide 8
    8 HEDGING PROGRAM Adds Greater Certainty to Cash Flow *Hedge positions reflect March to December 2016 NYMEX Fixed Price Swap 0.00 0.25 0.50 0.75 1.00 1.25 2016* 2017 Volume (Bcf/d) Natural Gas Positions NYMEX Costless…
  9. March 2016 Investor Presentation – Encana Corp – slide 9
    9 LIQUIDS VALUE CHAIN Projected Composition of Total Liquids Production *2016F based on company guidance as at February 24, 2016; production ranges are not additive **Includes plant condensate Liquids primarily comprised of…
  10. March 2016 Investor Presentation – Encana Corp – slide 10
    11 2016 ASSET HIGHLIGHTS Focus On Highest Margin Assets PERMIAN ? Development focus in the Midland/Martin/Upton ? Longer laterals and more wells per pad to drive efficiency ? Reduced vertical program by $100 million (~23 wells down…
  11. March 2016 Investor Presentation – Encana Corp – slide 11
    13 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…
  12. March 2016 Investor Presentation – Encana Corp – slide 12
    14 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 ?…
  13. March 2016 Investor Presentation – Encana Corp – slide 13
    15 PERMIAN ? 2016 PROGRAM Focus Development to Drive Efficiencies ? Focused development with 3 horizontal rigs ? Maintain land position through a reduced vertical drilling program ? Focus on the best rock ? D&C cost target* of $5.7…
  14. March 2016 Investor Presentation – Encana Corp – slide 14
    16 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)…
  15. March 2016 Investor Presentation – Encana Corp – slide 15
    17 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…
  16. March 2016 Investor Presentation – Encana Corp – slide 16
    18 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…
  17. March 2016 Investor Presentation – Encana Corp – slide 17
    19 ? 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 cost target* of $4.3 MM EAGLE FORD ?…
  18. March 2016 Investor Presentation – Encana Corp – slide 18
    20 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…
  19. March 2016 Investor Presentation – Encana Corp – slide 19
    21 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…
  20. March 2016 Investor Presentation – Encana Corp – slide 20
    22 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…
  21. March 2016 Investor Presentation – Encana Corp – slide 21
    23 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…
  22. March 2016 Investor Presentation – Encana Corp – slide 22
    24 DUVERNAY ? 2016 PROGRAM Moving Along the Development Curve ? Drill to fill in 2016 ? 2/3 of activity focused in Simonette North ? 10-29 Plant phase 1 start up in Q1 2016 ? 10,000 bbls/d and 50 MMcf/d gross capacity ? D&C cost…
  23. March 2016 Investor Presentation – Encana Corp – slide 23
    25 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…
  24. March 2016 Investor Presentation – Encana Corp – slide 24
    26 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…
  25. March 2016 Investor Presentation – Encana Corp – slide 25
    27 MONTNEY Decades of Low Cost Inventory Basin Extent ~58,000 mi2 ~47,000 mi2 Multi Layer Development ~980? thick Up to 6 HZ layers ~20 ? 250? thick 1 HZ layer Remaining Locations Basin ~115,000** (ECA: ~5,000) Basin ~92,000**…
  26. March 2016 Investor Presentation – Encana Corp – slide 26
    28 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 ?…
  27. March 2016 Investor Presentation – Encana Corp – slide 27
    29 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 ?…
  28. March 2016 Investor Presentation – Encana Corp – slide 28
    30 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…
  29. March 2016 Investor Presentation – Encana Corp – slide 29
    2016F ENCANA CORPORATE GUIDANCE US$, U.S. GAAP February 24, 2016 2016F Capital Investment ($ billions) Total Capital Investment 0.9 ? 1.0 Production (1) (after royalties) Natural Gas (MMcf/d) 1,300 ? 1,400 Liquids (Mbbls/d) 120 ?…

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