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August 2016 Corporate Presentation – Encana Corp

Encana Corp · Aug 4, 2016 · 32 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. August 2016 Corporate Presentation – Encana Corp – slide 1
  2. August 2016 Corporate Presentation – Encana Corp – slide 2
    • Lower cash costs – additional $100 million savings • Lower D&C costs – 30?40% reduction • Higher returns – over 35% ATROR • Raising 2016 production – up by 10,000 BOE/d • Increasing 2016 D&C activity – 50% more wells for 20% more…
  3. August 2016 Corporate Presentation – Encana Corp – slide 3
    3 ENCANA IN 2016 Well Positioned for Success TOP TIER RESOURCE • 95% of 2016F capital allocated to core four • 2016 program focused on core acreage in each asset OPERATIONAL EXCELLENCE • Significant D&C cost efficiencies •…
  4. August 2016 Corporate Presentation – Encana Corp – slide 4
    4 2016 GUIDANCE UPDATE Lower Costs, Higher Core Four Production 2016 Guidance (Feb 24, 2016) Revised 2016 Guidance Capital Investment Capital Investment ($MM) 900 – 1,000 1,100 – 1,200 Production Natural Gas (MMcf/d) 1,300 –…
  5. August 2016 Corporate Presentation – Encana Corp – slide 5
    5 Q2 HIGHLIGHTS Strong Operational Execution Q1 2016 Q2 2016 Upstream Operating Cash Flow* Excluding Hedging ($MM) 103 204 Upstream Operating Cash Flow* Including Hedging ($MM) 280 330 Transportation & Processing ($/BOE) 7.07…
  6. August 2016 Corporate Presentation – Encana Corp – slide 6
    6 BUILDING ON OUR TRACK RECORD Delivering Cost Savings • Expect to achieve an additional $100 MM in savings – LOE cost reduction task force reducing operating expense – Renegotiated contracts lowering T&P expense • Clean G&A* run…
  7. August 2016 Corporate Presentation – Encana Corp – slide 7
    7 PRUDENT FINANCIAL MANAGEMENT Debt Portfolio as at June 30, 2016 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 2038…
  8. August 2016 Corporate Presentation – Encana Corp – slide 8
    8 36% 30% 28% 31%** 0% 10% 20% 30% 40% 50% 60% 70% 80% YE 2013 YE 2014 YE 2015 Q2 2016 • $4.5B fully committed, unsecured, revolving credit facilities – Renewed in 2015 and committed to July 2020 – $3B available at June…
  9. August 2016 Corporate Presentation – Encana Corp – slide 9
    9 HEDGING PROGRAM Adds Greater Certainty to Cash Flow Hedge positions as at June 30, 2016 *July to December 2016 positions NYMEX Fixed Price Swap 0.00 0.25 0.50 0.75 1.00 1.25 2016* 2017 Volume (Bcf/d) Natural Gas Positions…
  10. August 2016 Corporate Presentation – Encana Corp – slide 10
    10 LIQUIDS VALUE CHAIN Projected Composition of Total Liquids Production *2016F based on company guidance as at July 21, 2016; production ranges are not additive **Includes plant condensate Liquids primarily comprised of…
  11. August 2016 Corporate Presentation – Encana Corp – slide 11
    ASSET OVERVIEW Permian drilling in Midland County
  12. August 2016 Corporate Presentation – Encana Corp – slide 12
    12 ENCANA Multi-Basin Portfolio Advantage • “Core of the core” positions in four of North America’s top basins – ~15,900 high quality locations • Operational excellence – Rapid application of innovations across the portfolio –…
  13. August 2016 Corporate Presentation – Encana Corp – slide 13
    13 ENCANA’S EXECUTION EXCELLENCE Basin Leading Operator BASIN LEADING OPERATOR INNOVATION CONTINUOUS IMPROVEMENT PORTFOLIO ADVANTAGE DISCIPLINED BENCHMARKING TO COMPETITORS
  14. August 2016 Corporate Presentation – Encana Corp – slide 14
    14 PACESETTING WELLS Relentless focus on capital efficiency $MM Permian Quarterly D&C Performance • Pacesetters are a leading indicator of future costs • Driven by innovation – Structured approach to testing new ideas/technologies…
  15. August 2016 Corporate Presentation – Encana Corp – slide 15
    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…
  16. August 2016 Corporate Presentation – Encana Corp – slide 16
    16 PERMIAN Basin Leading Operator • New pacesetting D&C cost of $4.3 MM – Average D&C cost of $4.9 MM/well in Q2, down 31% from 2015 • Davidson 14-well pad producing >10,000 BOE/d – Only 120 days from first spud to on production –…
  17. August 2016 Corporate Presentation – Encana Corp – slide 17
    17 PERMIAN – 2016 PROGRAM Focused Development to Drive Efficiencies • Development focus in the Midland/Martin/Upton • Longer laterals and more wells per pad to drive efficiency • Maintain land position through a reduced vertical…
  18. August 2016 Corporate Presentation – Encana Corp – slide 18
    18 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)…
  19. August 2016 Corporate Presentation – Encana Corp – slide 19
    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 –…
  20. August 2016 Corporate Presentation – Encana Corp – slide 20
    20 6.3 3.5 3.9 3.0 8 6 4 2 0 2015 Average 2016 Q1 2016 Q2 Pacesetter • New pacesetting D&C cost of $3.0 MM – Pacesetting drill in 8.5 days – Average D&C cost of $3.9 MM/well in Q2, down 38% from 2015 • Increasing productivity…
  21. August 2016 Corporate Presentation – Encana Corp – slide 21
    21 • Achieving substantial cost reductions • Enhancing well inventory – Delineating Upper Eagle Ford & Austin Chalk potential – Optimizing completion design for Graben wells – Confirm chevron downspacing for undeveloped acreage…
  22. August 2016 Corporate Presentation – Encana Corp – slide 22
    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 D i (decline factor)* 80 81 80 b?factor* 1.2 1.2 0.9 Average Lateral Length (ft.) 5,000 5,000…
  23. August 2016 Corporate Presentation – Encana Corp – slide 23
    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…
  24. August 2016 Corporate Presentation – Encana Corp – slide 24
    25 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…
  25. August 2016 Corporate Presentation – Encana Corp – slide 25
    26 DUVERNAY – 2016 PROGRAM Lowering Costs, Increasing Productivity • Advance downspacing and completion pilots • Increasingly material to production and cash flow • 2/3 of activity focused in Simonette North • Basin leading…
  26. August 2016 Corporate Presentation – Encana Corp – slide 26
    27 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…
  27. August 2016 Corporate Presentation – Encana Corp – slide 27
    28 • Large resource poised for significant growth – ~470,000 net acres in 3 contiguous core blocks – Over 1,000’ of pay, up to 6 stacked horizons – Up to 220 Bcf/section with up to 450 bbls/MMcf condensate – 9,300 gross well…
  28. August 2016 Corporate Presentation – Encana Corp – slide 28
    29 MONTNEY Focusing on the Condensate • New pacesetting D&C cost of $4.2 MM – Average D&C cost of $4.3 MM/well in Q2, down 33% from 2015 • Growing Montney liquids – 2016 program averaging >75 bbls/MMcf condensate • Pipestone new…
  29. August 2016 Corporate Presentation – Encana Corp – slide 29
    30 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 –…
  30. August 2016 Corporate Presentation – Encana Corp – slide 30
    31 MONTNEY – 2016 PROGRAM Focused 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…
  31. August 2016 Corporate Presentation – Encana Corp – slide 31
    32 ENCANA MONTNEY TYPE CURVES Total Gross Inventory BRITISH COLUMBIA ALBERTA Region Gas Condensate Super ? Condensate Condensate Condensate Super ? IP30 (BOE/d) 1,500 ? 2,000 1,400 ? 1,800 900 ? 1,100 1,850 ? 2,050 600 ? 800 IP180…
  32. August 2016 Corporate Presentation – Encana Corp – slide 32
    • Lower cash costs – additional $100 million savings • Lower D&C costs – 30?40% reduction • Higher returns – over 35% ATROR • Raising 2016 production – up by 10,000 BOE/d • Increasing 2016 D&C activity – 50% more wells for 20% more…

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