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May 2016 Corporate Presentation – Encana Corp

Encana Corp · May 3, 2016 · 37 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. May 2016 Corporate Presentation – Encana Corp – slide 1
    CORPORATE PRESENTATION ENCANA CORPORATION May 2016
  2. May 2016 Corporate Presentation – Encana Corp – slide 2
    DELIVERING TOP TIER PERFORMANCE AND LOWER COSTS Significant progress on achieving 2016 cost savings target of 550 million year-over-year Innovation and asset quality driving capital productivity across the core four assets On…
  3. May 2016 Corporate Presentation – Encana Corp – slide 3
    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…
  4. May 2016 Corporate Presentation – Encana Corp – slide 4
    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…
  5. May 2016 Corporate Presentation – Encana Corp – slide 5
    Annual Per Unit Costs BUILDING ON OUR TRACK RECORD /BOE 16 T&P Opex* PMOT Delivering Cost Savings 12 8 On track for 550 MM of y-o-y cost savings 4 Operating*, T&P and PMOT cost structures in line - 1H15 2H15 Q1 2016 '16…
  6. May 2016 Corporate Presentation – Encana Corp – slide 6
    PRUDENT FINANCIAL MANAGEMENT Debt Portfolio as at March 31, 2016 Total debt reduced by 2 billion since year-end 2014 489MM senior notes retired at cost of 400MM in Q1 Lowered annual interest expense on senior notes by 30MM Significant…
  7. May 2016 Corporate Presentation – Encana Corp – slide 7
    PRUDENT FINANCIAL MANAGEMENT Access to Significant Liquidity Through 2020 4.5B fully committed, unsecured, revolving credit ECA Ratio Well Within Covenant Threshold facilities Debt to Adjusted Capitalization Ratio Renewed in 2015 and…
  8. May 2016 Corporate Presentation – Encana Corp – slide 8
    HEDGING PROGRAM Adds Greater Certainty to Cash Flow 75%* of oil/condensate and 85%* of gas production hedged for 2016 Natural Gas Positions Oil Positions 1.25 100 2.22 x 2.46 /Mcf 1.00 Volume (Mbbls/d) 75 Volume (Bcf/d)…
  9. May 2016 Corporate Presentation – Encana Corp – slide 9
    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…
  10. May 2016 Corporate Presentation – Encana Corp – slide 10
    Q1 HIGHLIGHTS Results In Line With 2016 Guidance 2016 Q1 2016 Guidance Highly disciplined and focused capital program Capital Investment Capital spend on track with guidance Capital Investment (MM) 359 900 1,000 96% of capital…
  11. May 2016 Corporate Presentation – Encana Corp – slide 11
    ASSET OVERVIEW
  12. May 2016 Corporate Presentation – Encana Corp – slide 12
    2016 Production Composition (%) HIGH QUALITY INVENTORY Oil & Condensate** Montney NGL (C2-C4) Huge Upside To Price Recovery Gas 5,000 Duvernay Core of the core positions in four of North locations Americas top basins Over 11,500…
  13. May 2016 Corporate Presentation – Encana Corp – slide 13
    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…
  14. May 2016 Corporate Presentation – Encana Corp – slide 14
    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.…
  15. May 2016 Corporate Presentation – Encana Corp – slide 15
    PERMIAN Premier North American Oil Basin 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 spanning…
  16. May 2016 Corporate Presentation – Encana Corp – slide 16
    PERMIAN Aggressive reductions in D&C Costs* Basin Leading Operator 8 MM 7.1 Average Q1 D&C cost of 5.4 MM/well 6 5.7 5.4 Beat our 5.7 MM D&C cost target 4 24% reduction from 2015 average New pacesetter of 4.6 MM 2 Maximizing…
  17. May 2016 Corporate Presentation – Encana Corp – slide 17
    PERMIAN 2016 PROGRAM Focused 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…
  18. May 2016 Corporate Presentation – Encana Corp – slide 18
    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)…
  19. May 2016 Corporate Presentation – Encana Corp – slide 19
    EAGLE FORD Core Position in the Oil Window 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 area…
  20. May 2016 Corporate Presentation – Encana Corp – slide 20
    EAGLE FORD Aggressive reductions in D&C Costs* Dramatic Cost Improvements 8 MM Average Q1 D&C cost of 3.5 MM/well 6 6.3 Beat our 4.3 MM D&C cost target 4.3 4 3.5 44% reduction from 2015 average New pacesetter of 3.4 MM 2…
  21. May 2016 Corporate Presentation – Encana Corp – slide 21
    EAGLE FORD 2016 PROGRAM Enhancing Well Inventory Enhancing well inventory FY 2016 Plan Optimizing completion design for Graben wells Acreage (net acres) 43,200 Kenedy 6,400 Confirm chevron downspacing for undeveloped acreage Graben…
  22. May 2016 Corporate Presentation – Encana Corp – slide 22
    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 b-factor* 1.2 1.2 0.9 Average Lateral Length (ft.) 5,000 5,000 5,000…
  23. May 2016 Corporate Presentation – Encana Corp – slide 23
    DUVERNAY Top 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…
  24. May 2016 Corporate Presentation – Encana Corp – slide 24
    DUVERNAY Aggressive reductions in D&C Costs* Leading on Productivity and Costs 14 MM 12.3 Average Q1 D&C cost of 8.0 MM/well 12 10 Matched our 2016 7.9 MM D&C cost target 8 7.9 8.0 35% reduction from 2015 average 6 New…
  25. May 2016 Corporate Presentation – Encana Corp – slide 25
    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…
  26. May 2016 Corporate Presentation – Encana Corp – slide 26
    DUVERNAY 2016 PROGRAM Lowering Costs, Increasing Productivity FY 2016 Plan Drill to fill in 2016 Acreage (net acres) 335,000 Simonette 97,000 2/3 of activity focused in Simonette North Willesden Green 200,000 Basin leading…
  27. May 2016 Corporate Presentation – Encana Corp – slide 27
    DUVERNAY Key Modeling Statistics Condensate Gas Ratio Condensate Gas Ratio 65 150 bbls/MMcf 150 250 bbls/MMcf IP30 (MMcf/d) 68 5 6.5 EUR/Well (MBOE) 1,200 1,600 1,000 1,400 Condensate Yields (bbl/MMcf) 65 150 150 250 Di Gas…
  28. May 2016 Corporate Presentation – Encana Corp – slide 28
    MONTNEY Decades of Low Cost Inventory 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…
  29. May 2016 Corporate Presentation – Encana Corp – slide 29
    MONTNEY Highly Competitive with Top North American Gas Plays Montney Play* Marcellus Play Competitive with the Marcellus in well Basin Extent 58,000 mi2 47,000 mi2 deliverability, cost and economics 980 thick 20 250 thick Expecting…
  30. May 2016 Corporate Presentation – Encana Corp – slide 30
    MONTNEY Production Efficiency & Liquids Growth Expecting 50,000 bbls/d of liquids by end of 2018 Liquids growth outpaces gas 1,500 oil and condensate Montney wells in inventory 2016 2018 Total Capital MM Production Efficiency…
  31. May 2016 Corporate Presentation – Encana Corp – slide 31
    MONTNEY Aggressive reductions in D&C Costs* Proving the Liquids Rich Portfolio 8 MM 6.4 Average Q1 D&C cost of 5.0 MM/well 6 5.1 5.0 Under our 2016 5.1 MM D&C cost target 4 22% reduction from 2015 average 2 New pacesetter of…
  32. May 2016 Corporate Presentation – Encana Corp – slide 32
    AECO BASIS DYNAMICS Short-term Outlook (Summer 2016) Storage levels high due to injections throughout Q1 2016 one of the warmest winters on record AECO basis has widened with the markets view of potential storage restrictions in late…
  33. May 2016 Corporate Presentation – Encana Corp – slide 33
    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…
  34. May 2016 Corporate Presentation – Encana Corp – slide 34
    MONTNEY 2016 PROGRAM Focused 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…
  35. May 2016 Corporate Presentation – Encana Corp – slide 35
    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…
  36. May 2016 Corporate Presentation – Encana Corp – slide 36
    DELIVERING TOP TIER PERFORMANCE AND LOWER COSTS Innovation and asset quality driving capital productivity across the core four assets Significant progress on achieving 2016 cost savings target of 550 million year-over-year On…
  37. May 2016 Corporate Presentation – Encana Corp – slide 37
    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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