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Corporate Presentation April 2016 – Encana Corp

Encana Corp · Apr 18, 2016 · 32 slides

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Slides

  1. Corporate Presentation April 2016 – Encana Corp – slide 1
    CORPORATE PRESENTATION ENCANA CORPORATION April 2016
  2. Corporate Presentation April 2016 – Encana Corp – slide 2
    ENCANA IN 2016 Sustainable Business Model Through the Cycle TOP TIER RESOURCE MARKET 95% of 2016F capital FUNDAMENTALS allocated to core four Maximizing realized prices 2016 program focused on Informs capital allocation core acreage…
  3. Corporate Presentation April 2016 – Encana Corp – slide 3
    STRENGTHENING THE BUSINESS Decisive Steps to Manage Through the Commodity Cycle Increased and Achieved Reset 2016 Re-aligned extended 4.5B 400MM in capital to C1.44B organization with credit facilities to capital and 0.9B - 1B…
  4. Corporate Presentation April 2016 – Encana Corp – slide 4
    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…
  5. Corporate Presentation April 2016 – Encana Corp – slide 5
    ENCANA CREDIT FACILITIES Access to Significant Liquidity Through 2020 ECA Ratio Well Within Covenant Threshold 4.5 billion fully committed, unsecured, revolving Debt to Adjusted Capitalization Ratio credit facilities 80% Renewed in…
  6. Corporate Presentation April 2016 – Encana Corp – slide 6
    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…
  7. Corporate Presentation April 2016 – Encana Corp – slide 7
    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…
  8. Corporate Presentation April 2016 – Encana Corp – slide 8
    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…
  9. Corporate Presentation April 2016 – Encana Corp – slide 9
    HEDGING PROGRAM Adds Greater Certainty to Cash Flow 75% of oil/condensate and gas production hedged for 2016 Natural Gas Positions Oil Positions 1.25 100 1.00 Volume (Mbbls/d) 2.22 x 2.46 75 Volume (Bcf/d) /MMcf 47.14 x…
  10. Corporate Presentation April 2016 – Encana Corp – slide 10
    LIQUIDS VALUE CHAIN Projected Composition of Total Liquids Production Canada US 2016F* 2016F Pricing 2016F* 2016F Pricing (Mbbls/d) (%WTI) (Mbbls/d) (%WTI) Oil and Condensate** 20 25 96% 70 75 87% Butane 25 41% 36 41% Propane 36…
  11. Corporate Presentation April 2016 – Encana Corp – slide 11
    Montney Liquids rich Duvernay High value condensate Asset Overview Permian Oil Eagle Ford Oil
  12. Corporate Presentation April 2016 – Encana Corp – slide 12
    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 program…
  13. Corporate Presentation April 2016 – Encana Corp – slide 13
    INNOVATION AT WORK Encanas Five Key Categories of Innovation 1. Well spacing in three dimensions in complex reservoirs 2. Targeting the best pay with advanced reservoir characterization & geosteering 3. Optimizing completions intensity 4.…
  14. Corporate Presentation April 2016 – Encana Corp – slide 14
    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 Midland Glasscock Howard Martin…
  15. Corporate Presentation April 2016 – Encana Corp – slide 15
    PERMIAN Peer D&C Cost Performance Driving Quality Returns MM 10 9.5 Top tier operator after less than a year 9 8.5 Culture of innovation and operating excellence 8 7.5 Production up 50% from acquisition 7 Enhancing capital…
  16. Corporate Presentation April 2016 – Encana Corp – slide 16
    PERMIAN 2016 PROGRAM Focus Development to Drive Efficiencies FY 2016 Plan Acreage (net acres) 146,000 Glasscock 18,500 Focused development with 3 horizontal rigs Howard 58,500 Maintain land position through a reduced vertical…
  17. Corporate Presentation April 2016 – Encana Corp – slide 17
    PERMIAN Key Modeling Statistics Glasscock Howard A Martin Midland/Upton Wolfcamp A Wolfcamp B Wolfcamp A Lower Wolfcamp B Wolfcamp A Wolfcamp B Wolfcamp C Spraberry IP30 (bbls/d) 950 700 875 900 800 775 900 725 EUR/Well (MBOE)…
  18. Corporate Presentation April 2016 – Encana Corp – slide 18
    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 improvement Graben…
  19. Corporate Presentation April 2016 – Encana Corp – slide 19
    EAGLE FORD A Great Asset Continues to Outperform Aggressive Reductions in D&C Costs Cost reduction achievements MM MM/1000 33% decrease in D&C costs since acquisition 10 5 Completion days dropped 42% to 3.5 days/well 8 7.8 4…
  20. Corporate Presentation April 2016 – Encana Corp – slide 20
    EAGLE FORD 2016 PROGRAM Enhancing Well Inventory FY 2016 Plan Enhancing well inventory Acreage (net acres) 43,200 Optimizing completion design for Graben wells Kenedy 6,400 Graben 20,600 Confirm chevron downspacing for undeveloped…
  21. Corporate Presentation April 2016 – Encana Corp – slide 21
    EAGLE FORD Key Modeling Statistics Kenedy Panna Maria Graben IP30 (bbls/d) 930 875 780 EUR/Well (MBOE) 800 900 500 620 400 500 Di (decline factor)* 80 81 80 bfactor* 1.2 1.2 0.9 Average Lateral Length (ft.) 5,000 5,000 5,000…
  22. Corporate Presentation April 2016 – Encana Corp – slide 22
    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 resource play…
  23. Corporate Presentation April 2016 – Encana Corp – slide 23
    DUVERNAY High Rate Wells Generating Quality Returns Duvernay and Eagle Ford well comparison Industry-leading operating efficiencies MM (Gross) Dual rig/dual frac crews per pad 12 Water and road infrastructure allowing for year-round…
  24. Corporate Presentation April 2016 – Encana Corp – slide 24
    DUVERNAY JOINT VENTURE Brion (formerly Phoenix, a subsidiary of PetroChina) agreed to invest C2.18 billion for 49.9% working interest C1.18 billion up front cash in 2012 Further investment of C1.0 billion during the commitment…
  25. Corporate Presentation April 2016 – Encana Corp – slide 25
    DUVERNAY 2016 PROGRAM Moving Along the Development Curve FY 2016 Plan Drill to fill in 2016 Acreage (net acres) 335,000 2/3 of activity focused in Simonette North Simonette 97,000 Willesden Green 200,000 10-29 Plant phase 1 start up…
  26. Corporate Presentation April 2016 – Encana Corp – slide 26
    DUVERNAY Key Modeling Statistics Condensate Gas Ratio Condensate Gas Ratio 65 150 bbls/MMcf 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) 65 150 150 250 Di Gas…
  27. Corporate Presentation April 2016 – Encana Corp – slide 27
    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 and condensate…
  28. Corporate Presentation April 2016 – Encana Corp – slide 28
    MONTNEY Decades of Low Cost Inventory Montney Play* Marcellus Play Competitive to the Marcellus in well Basin Extent 58,000 mi2 47,000 mi2 deliverability, cost and economics 980 thick 20 250 thick Expecting 50,000 bbls/d of liquids…
  29. Corporate Presentation April 2016 – Encana Corp – slide 29
    MONTNEY Cutbank Ridge Partnership (CRP) Tower Partnership with a subsidiary of Mitsubishi Encana: 60% interest Saturn Mitsubishi: 40% interest Development areas Montney: Tower, Dawson North, Dawson South and Tumbler Ridge Dawson…
  30. Corporate Presentation April 2016 – Encana Corp – slide 30
    MONTNEY 2016 PROGRAM Focus On Oil and Liquids Development FY 2016 Plan Acreage (net acres) 525,000 Fill existing infrastructure to maintain production Cutbank Ridge (BC) 293,000 Development focused in the liquids rich zones and Peace…
  31. Corporate Presentation April 2016 – Encana Corp – slide 31
    MONTNEY Key Modeling Statistics Tower Saturn Dawson South IP30 (MMcf/d) 4 9 10 14 7 14 EUR/Well (Bcfe) 10 13 8 18 13 19 EUR/Well (MBOE) 1,630 2,130 1,400 3,000 2,000 3,200 Condensate Yield (bbls/MMcf) 30 90 6 20 15 55 Di…
  32. Corporate Presentation April 2016 – Encana Corp – slide 32
    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) 120 130…

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