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Encana Investor Day Presentation – Encana Corp

Encana Corp · Oct 5, 2016 · 113 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. Encana Investor Day Presentation – Encana Corp – slide 1
  2. Encana Investor Day Presentation – Encana Corp – slide 2
    2 Clear Strategic Focus Eagle Ford 600 well locations Permian 10,000 well locations Montney 9,300 well locations Duvernay 1,000 well locations ENCANA ? Foundation (2013 ? 2015) ? Major portfolio transformation ? Overhauled…
  3. Encana Investor Day Presentation – Encana Corp – slide 3
    4 ENCANA Quality Returns & Leading Growth (2016 ? 2021) * Assumes flat $55/bbl WTI and $3/MMBtu NYMEX; ** Assumes flat $50/bbl WTI and $3/MMBtu NYMEX . Delivering quality returns >300% cash flow* growth >60% production* growth…
  4. Encana Investor Day Presentation – Encana Corp – slide 4
    5 250 350 450 550 650 2016F 2017F 2018F 2019F 2020F 2021F PRODUCTION GROWTH TRAJECTORY ? >60% total company production* growth ? Permian grows ~3x ? 4x ? Montney liquids grow ~4x ? 5x, gas grows ~2x ? Combination of Eagle Ford…
  5. Encana Investor Day Presentation – Encana Corp – slide 5
    6 - 1,000 2,000 3,000 4,000 2016F 2017F 2018F 2019F 2020F 2021F 5 YEAR CAPITAL & CASH FLOW OUTLOOK Self-Funding Capital Program Post 2017 ? >300% cash flow* growth ? Focus on high margin production amplifies cash flow growth ?…
  6. Encana Investor Day Presentation – Encana Corp – slide 6
    7 TOP TIER RESOURCE OPERATIONAL EXCELLENCE BALANCE SHEET STRENGTH MARKET FUNDAMENTALS CAPITAL ALLOCATION Delivering Quality Returns ENCANA ? Leading growth ? >300% cash flow growth over 5 year plan ? World class assets ?…
  7. Encana Investor Day Presentation – Encana Corp – slide 7
    3 ? Core positions in four of North America?s premier basins ? Resource rich basins with significant upside ? Growing inventory through technical excellence in each play since entering RESOURCE IN CONTEXT Encana?s World Class…
  8. Encana Investor Day Presentation – Encana Corp – slide 8
    4 0 30 60 90 120 150 180 RESOURCE IN CONTEXT Encana Holds Core Positions in Premier Basins Horizontal Rig Activity* by Play Source: RigData, IHS, GeoScout, and RS Energy, Inc as of Sept 2016 ECA portfolio focused entirely on…
  9. Encana Investor Day Presentation – Encana Corp – slide 9
    6 1,000? CORE POSITIONS IN THE BEST ROCKS Building of a Premium Return Inventory Montney 10 - 45 MMBOE/sec Up to 6 stacked laterals Permian >200 MMBOE/sec Up to 8 stacked laterals Eagle Ford 30 - 50 MMBOE/sec Up to 3 stacked…
  10. Encana Investor Day Presentation – Encana Corp – slide 10
    7 0 5,000 10,000 15,000 20,000 25,000 2014 Current Inventory Count Permian Montney Duvernay Eagle Ford ENCANA WELL INVENTORY Significant Growth Total Encana Inventory ? >20,000 locations ? ~10,000 premium locations…
  11. Encana Investor Day Presentation – Encana Corp – slide 11
    8 ENCANA?S PREMIUM RETURN INVENTORY Only ~15% of Premium Inventory Consumed in Growth Plan Permian Basin Montney Eagle Ford Duvernay 10,000 well inventory 2,750 premium locations ~1,000 wells drilled in 5 year plan Premium…
  12. Encana Investor Day Presentation – Encana Corp – slide 12
    9 RESOURCE IN CONTEXT Permian ? Premier North American oil play ? Heavily weighted to liquids (~80% of production) ? Productive intervals spanning over 5,000? of stratigraphy ? Inventory continues to expand ? De-risking new zones…
  13. Encana Investor Day Presentation – Encana Corp – slide 13
    10 30 miles Midland Texas Encana Land Basin Core RECENT TRANSACTIONS SUPPORT QUALITY 2016 Industry Deals in Glasscock, Howard and Martin Counties August 2016 SM Energy / Rock Oil Implied Acreage Value: ~$32,000/acre* August…
  14. Encana Investor Day Presentation – Encana Corp – slide 14
    11 PERMIAN RESERVOIR Zone Martin Midland* Glasscock Howard Clear Fork ? ? M. SPBY ? ? L. SPBY ? ? ? ? L. SPBY- 2nd ? ? ? ? WCMP A ? ? ? ? WCMP A- 2nd ? ? WCMP B ? ? ? WCMP C ? ? WCMP D / Cline ? ? ? ? Deep Targets ? ? Total…
  15. Encana Investor Day Presentation – Encana Corp – slide 15
    12 PERMIAN WELL PRODUCTIVITY Encana Average IP180 >500 BOE/d Data sourced from IHS, Inc. Results normalized to 7,500?, includes all data from 2014 onward. Peers include APA, AREX, CPE, CVX, CXO, DVN, EGN, END, EOG, EPE, FANG, LPI, OXY,…
  16. Encana Investor Day Presentation – Encana Corp – slide 16
    13 ? Core position with scale within a premier North American play ? Encana?s innovation and efficiency are converting inventory to premium return inventory ? Continuous improvement of cost structure ? Downspacing pilots beyond 660?…
  17. Encana Investor Day Presentation – Encana Corp – slide 17
    14 RESOURCE IN CONTEXT Eagle Ford ? Strategically positioned in the Karnes Trough ? Best rock in the Eagle Ford ? Most active and profitable trend in the Eagle Ford ? Well inventory improving since entry ? 600 total inventory…
  18. Encana Investor Day Presentation – Encana Corp – slide 18
    15 STACKING WELLS IN THE EAGLE FORD Play Continues to Expand Austin Chalk First Encana wells on stream for less than 30 days No current inventory Upper Eagle Ford Now developing Upper Eagle Ford targets optimized with existing…
  19. Encana Investor Day Presentation – Encana Corp – slide 19
    16 RESOURCE IN CONTEXT Eagle Ford Remaining Inventory ~100% of premium inventory consumed through 2021 Total Inventory 600 locations Premium 130 locations ? Positioned within the most active and profitable trend ? Well…
  20. Encana Investor Day Presentation – Encana Corp – slide 20
    17 RESOURCE IN CONTEXT Duvernay ? Encana holds a large contiguous land base within the core of the play ? Significant growth opportunity ? 1,000 total locations, 500 premium locations ? Encana focusing on Simonette region as the…
  21. Encana Investor Day Presentation – Encana Corp – slide 21
    18 Significant overpressure enhances deliverability from thick resource rich section Encana Holds Large Core Position SIMONETTE IS THE CORE OF THE DUVERNAY Area Condensate Ratio (bbls/MMcf) Simonette North Simonette South Volatile…
  22. Encana Investor Day Presentation – Encana Corp – slide 22
    19 ? A premier position in a leading, emerging liquids rich play ? Encana investing into 2 key areas - Simonette North ? leading the industry in cost performance - Simonette South ? deeper, more prolific, highest rate wells in the…
  23. Encana Investor Day Presentation – Encana Corp – slide 23
    20 RESOURCE IN CONTEXT Montney ? Massive inventory ? Stacked resource parallels the Permian development ? Wells up to 2.5 MMBoe, IP >2,500 BOE/d ? Optionality among fluid windows ? Not a shale; highly productive across all fluid…
  24. Encana Investor Day Presentation – Encana Corp – slide 24
    21 MONTNEY STACKED RESOURCE Growing Stack of High Quality Liquids Rich Montney Pipestone (up to 4 laterals) Tower/Dawson (up to 6 laterals) 650? Montney 1,000? Montney Zone Condensate Ratio (bbls/MMcf) Tower Dawson South…
  25. Encana Investor Day Presentation – Encana Corp – slide 25
    22 ? Premium return inventory economics driven by liquids ? Condensate receives WTI pricing in Canada ? Liquids rich inventory amongst best wells in Encana?s portfolio ? Liquids growth drives margin expansion over the five year…
  26. Encana Investor Day Presentation – Encana Corp – slide 26
    23 ENCANA PORTFOLIO POSITIONED FOR GROWTH Top Tier Resource Portfolio Aligned With Strategy World Class Multi-Basin Portfolio Permian Eagle Ford Duvernay Montney Massive Premium Return Inventory 10,000 Premium Return Wells >20,000…
  27. Encana Investor Day Presentation – Encana Corp – slide 27
    5 OPERATIONAL EXCELLENCE D&C Cost Momentum Continues to Build *All D&C cost data sourced from peer public presentations, normalized to industry standard lengths (Permian 7,500?, Eagle Ford 5,000?, Montney 9,000?, Duvernay 8,200?) 7 5…
  28. Encana Investor Day Presentation – Encana Corp – slide 28
    6 LOWER COSTS FASTER D&C Cost Momentum Continues to Build 9 8 7 6 5 4 10 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 $MM *All D&C cost data sourced from peer public presentations; data normalized to 7,500?; Peers include: EGN, FANG, LPI, OXY, PE,…
  29. Encana Investor Day Presentation – Encana Corp – slide 29
    7 D&C COST REDUCTIONS SINCE 2014 Drivers of Success Drivers Reduced drilling days Drilling design breakthroughs Increased pumping time per day Completion design breakthroughs Streamlined logistics Service cost reductions %…
  30. Encana Investor Day Presentation – Encana Corp – slide 30
    8 WELL PRODUCTIVITY IP180 Well Performance *Data sourced from RS Energy Group, raw data provided by geoSCOUT. Permian Eagle Ford Montney* Duvernay* 0 200 400 600 800 ECA Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 IP180 (bbls/d,…
  31. Encana Investor Day Presentation – Encana Corp – slide 31
    9 OPERATIONAL EXCELLENCE Reducing Operating Costs Permian Eagle Ford Montney Duvernay $0 $2 $4 $6 $8 $10 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 $0 $2 $4 $6 $8 $10 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 $0 $5 $10 $15…
  32. Encana Investor Day Presentation – Encana Corp – slide 32
    10 ENCANA INCOME MARGIN All-In Profitability 5 0 10 15 20 25 30 Operating Margin F&D Non-well Capital Overhead Income Margin ? Premium returns at the corporate level ? Locations in the plan deliver an average of ~$25/BOE…
  33. Encana Investor Day Presentation – Encana Corp – slide 33
    11 5 YEAR OUTLOOK Self-Funding Post 2017 ? Focus on high margin production ? Continuous improvement drives high returns ? Production growth of >60%* ? Leading D&C costs sets up self-funding post-2017 250 350 450 550 650…
  34. Encana Investor Day Presentation – Encana Corp – slide 34
    5 WESTERN CANADIAN MARKET FUNDAMENTALS Natural Gas Export Basin ? Premium Condensate Market Source: Encana Fundamentals, RBC Capital Markets, Various Pipeline Postings; *Net Effective Capacity (Bakken Access) To Pacific Northwest…
  35. Encana Investor Day Presentation – Encana Corp – slide 35
    6 9 8 7 6 5 4 10 11 12 13 2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F WCSB Net Exports Export Capacity WESTERN CANADIAN NATURAL GAS FUNDAMENTALS Required Exports - Existing Infrastructure More than Sufficient for Growth…
  36. Encana Investor Day Presentation – Encana Corp – slide 36
    7 ? AECO basis has averaged ~$(0.50) from 2009 through the present ? Current market dramatically affected by winter 2015-2016 (one of the warmest on record) ? Market sees a gradual tightening toward more historical levels ? Encana…
  37. Encana Investor Day Presentation – Encana Corp – slide 37
    8 WESTERN CANADIAN CONDENSATE FUNDAMENTALS Premium Condensate Market Source: RBC Capital Markets and Government Data 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 0.55 0.6 0.65 2000 2002 2004 2006 2008 2010 2012 2014…
  38. Encana Investor Day Presentation – Encana Corp – slide 38
    9 Past & Future Pipeline Capacity Expansions Align with Growth PERMIAN BASIN FUNDAMENTALS Source: Wells Fargo Securities Forecast
  39. Encana Investor Day Presentation – Encana Corp – slide 39
    10 ? Midland basis historically maintained a close connection to WTI ? Infrastructure additions have paced supply since late 2014 yielding a differential in line with historical norms ? The market is expecting pipeline development…
  40. Encana Investor Day Presentation – Encana Corp – slide 40
    2 ? Core acreage within top quality basin ? Acreage situated in northern/central sweet spot of the Midland Basin ? Productive intervals spanning over 5,000? of stratigraphy ? D&C cost leader ? D&C costs down from >$8 MM to less than…
  41. Encana Investor Day Presentation – Encana Corp – slide 41
    3 0 10,000 20,000 30,000 40,000 50,000 60,000 PXD ECA OXY FANG EGN XOM APA CVX QEP LPI RSPP END CXO CPE BBEP Gross Operated Production (BOE/d) ENCANA IS THE 2nd LARGEST PRODUCER Core Midland Basin Producers at a Glance Source:…
  42. Encana Investor Day Presentation – Encana Corp – slide 42
    4 ? Current D&C well costs of $4.9 MM/well ? Down from >$8MM/well since entering the basin ? Performing amongst the top operators ? 45% reduction in drilling days ? Mud system improvements ? Shortened intermediate casing string ?…
  43. Encana Investor Day Presentation – Encana Corp – slide 43
    5 WELL PRODUCTIVITY Encana Wells Outpacing Peer Results Data sourced from IHS, Inc. Results normalized to 7,500?, includes all data from 2014 onward. Peers include APA, AREX, CPE, CVX, CXO, DVN, EGN, END, EOG, EPE, FANG, LPI, OXY, PE,…
  44. Encana Investor Day Presentation – Encana Corp – slide 44
    6 WOLFCAMP Midland/Upton County Midland/Upton WCA Type Curve IP30 = 700 BOE/d 6 mo. Oil Cum = 90 MBO EUR = 900 MBOE D&C = $5.1 MM Lateral Length = 7,500 ft All metrics based on $3.0/MMBtu NYMEX, $55/bbl WTI Type Well Metrics ?…
  45. Encana Investor Day Presentation – Encana Corp – slide 45
    7 INNOVATION SUCCESS Large Scale Pad Development Davidson Pad Project Stats Well Count 14 Target Zone Wolfcamp Average Spud-RR 16.4 days Average Lateral Length 8,630 ft Average Completion 1,500 ppf, 2,000 gal/ft Average D&C Cost…
  46. Encana Investor Day Presentation – Encana Corp – slide 46
    8 LOWER SPRABERRY Martin, Midland/Upton, Howard, Glasscock Martin Lower Spraberry Type Curve IP30 = 600 BOE/d 6 mo. Oil Cum = 85 MBO EUR = 850 MBOE D&C = $5.1 MM Lateral Length = 7,500 ft All metrics based on $3.0/MMBtu NYMEX,…
  47. Encana Investor Day Presentation – Encana Corp – slide 47
    9 INNOVATION SUCCESS Identifying Optimal Completion Design and Geometry Low Proppant Concentration High Proppant Concentration ? Microseismic work identified optimal completion intensity ? Low proppant completions inefficiently…
  48. Encana Investor Day Presentation – Encana Corp – slide 48
    10 EXPANDING MARGINS Reducing Operating Costs ? Improving efficiencies ? Company-wide effort ? Accountability at the operator level ? Working smarter ? >80% of produced water on pipe ? >70% of production on remote monitoring and…
  49. Encana Investor Day Presentation – Encana Corp – slide 49
    11 INNOVATION SUCCESS Water Integration and Recycling ? Self sufficient water supply ? Reduced dependency on third-party water supply ? Flexibility to support development schedules ? Reduced well costs and operating expense ?…
  50. Encana Investor Day Presentation – Encana Corp – slide 50
    12 PERMIAN INCOME MARGIN All-In Profitability ? Premium returns at the corporate level ? Locations in the Permian deliver ~$30/BOE operating margin ? NRI F&D ~$9.00/BOE ? Non-well capital of $0.60/BOE ? G&A and interest expense…
  51. Encana Investor Day Presentation – Encana Corp – slide 51
    13 Permian MIDSTREAM AND MARKETING OVERVIEW Gathering system links production to pipeline hubs Permian ? Majority of oil production gathered via pipeline with access to multiple physical markets ? Firm gas gathering and NGL…
  52. Encana Investor Day Presentation – Encana Corp – slide 52
    14 ENCANA PERMIAN 5 Year Growth Profile - 20 40 60 80 100 120 140 160 180 2016F 2017F 2018F 2019F 2020F 2021F MBOE/d ? >50% of Encana?s capital directed to the Permian ? Permian production expected to grow 3-4x ? 5 year…
  53. Encana Investor Day Presentation – Encana Corp – slide 53
    2 ENCANA IN THE MONTNEY A Premier North American Play Encana Core Montney Encana Non-core Montney *Estimated inventory based on 440 - 880 ft spacing ? Encana?s Montney is a condensate play ? 5,900 premium condensate-rich…
  54. Encana Investor Day Presentation – Encana Corp – slide 54
    3 0 200 400 600 800 1,000 1,200 Gross Operated Production (MMcf/d) ENCANA IS THE LARGEST MONTNEY PRODUCER Montney Producers at a Glance Source : Industry data Montney ECA net production ECA gross production Peer gross…
  55. Encana Investor Day Presentation – Encana Corp – slide 55
    4 CONTINOUS IMPROVEMENT Reducing Drilling & Completion Costs ? Significant reduction in drilling & completion costs ? New bit designs ? Increased lateral drilling efficiencies ? 30% reduction in cycle time ? Domestic frac sand…
  56. Encana Investor Day Presentation – Encana Corp – slide 56
    5 Top Performance vs Peers WELL PRODUCTIVITY Data sourced from RS Energy Group, raw data provided by geoSCOUT. 0 200 400 600 800 1,000 1,200 1,400 IP180 (bbls/d, BOE/d) Oil Gas ECA 2017 focused on higher margin, higher…
  57. Encana Investor Day Presentation – Encana Corp – slide 57
    6 ? Situated in core of Alberta Montney ? Oil resource of ~45 MMbbls/section ? ~90,000 contiguous acres, 98%WI ? ~2,400 premium well inventory ? Up to 4 stacked HZ horizons ? Condensate ratios up to 300 bbls/MMcf ENCANA PIPESTONE…
  58. Encana Investor Day Presentation – Encana Corp – slide 58
    7 0 100 200 300 400 500 0 30 60 90 120 150 180 210 240 270 300 330 Cumulative MBOE Producing Days 2017 Type Curve 12-25-071-09 15-31-071-08 05-14-072-09 VOLATILE OIL (>250 bbls/MMcf) Pipestone Well Performance Type Curve…
  59. Encana Investor Day Presentation – Encana Corp – slide 59
    8 ? Located in core of central region ? Active area for industry ? Condensate and oil development ? Condensate ratios up to 250 bbls/MMcf ? ~64,000 contiguous acres, 60% WI ? ~2,400 premium well inventory ? Up to 6 stacked HZ…
  60. Encana Investor Day Presentation – Encana Corp – slide 60
    9 0 100 200 300 400 500 0 30 60 90 120 150 180 210 240 270 300 330 Cumulative MBOE Producing Days Type Curve 02-12 Pad 05-01 Pad RICH GAS CONDENSATE (50-150 bbls/MMcf) Tower Well Performance Upper Montney Type Well Metrics…
  61. Encana Investor Day Presentation – Encana Corp – slide 61
    10 ENCANA DAWSON SOUTH Emerging Condensate Rich Acreage ? Located in core of central region ? Low risk, high value future growth potential ? Dry gas optionality ? Condensate ratios up to 50 bbls/MMcf ? ~87,000 contiguous acres, 60%…
  62. Encana Investor Day Presentation – Encana Corp – slide 62
    11 0 100 200 300 400 500 600 700 0 60 120 180 240 300 360 420 480 Cumulative MBOE Producing Days Lower Montney Type Curve 04-17 Unconstrained 12-05 & 09-35 Pad GAS CONDENSATE (20-50 bbls/MMcf) Dawson South Well…
  63. Encana Investor Day Presentation – Encana Corp – slide 63
    13 MONTNEY INCOME MARGIN All-In Profitability ? Premium returns at the corporate level ? Montney delivers ~$14/BOE operating margin ? NRI F&D ~$4.00/BOE ? Non-well capital of $0.60/BOE ? G&A & interest expense ~$3.00/BOE ?…
  64. Encana Investor Day Presentation – Encana Corp – slide 64
    14 INFRASTRUCTURE PLAN Liquids Handling Capacity Supports Growth British Columbia ? Majority of upstream gathering, compression, and processing is third party midstream ? Current capacity ? ~1.0 Bcf/d gas and ~10,500 bbls/d…
  65. Encana Investor Day Presentation – Encana Corp – slide 65
    16 Montney MIDSTREAM AND MARKETING OVERVIEW ? Flexible midstream and transportation portfolio aligned with development program ? Diversified physical markets and liquid financial market ? AECO is the benchmark price for the most…
  66. Encana Investor Day Presentation – Encana Corp – slide 66
    17 ENCANA MONTNEY 5 Year Growth Profile - 200 400 600 800 1,000 1,200 1,400 2016F 2017F 2018F 2019F 2020F 2021F MMcf/d ? Development focused in condensate rich areas ? Operating margin increases by >200% by 2021 ? Liquids…
  67. Encana Investor Day Presentation – Encana Corp – slide 67
    2 ? Large contiguous land base within core of play ? Significant growth opportunity ? 1,000 total locations, 500 premium locations ? Industry leading operating performance ? Multi-well pads and in-place infrastructure significantly…
  68. Encana Investor Day Presentation – Encana Corp – slide 68
    3 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 ECA RDS CVE XTO APA REP MUR TET Other Gross Operated Production (BOE/d) ENCANA IS THE LARGEST PRODUCER IN THE PLAY Duvernay Source : Industry data. 12 miles Gross…
  69. Encana Investor Day Presentation – Encana Corp – slide 69
    4 REDUCING COSTS Duvernay Duvernay D&C Costs* 12.3 8.0 7.5 6.8 9 6 3 0 12 15 2015 Average 2016 Q1 2016 Q2 Pacesetter $MM * D&C Costs normalized to 8,200 ft lateral length **Data sourced from peer investor presentations. Peers…
  70. Encana Investor Day Presentation – Encana Corp – slide 70
    5 3.8 5 5.3 6.5 5.2 6.0 7 6 5 4 3 2 1 0 9-10 Pad 4-4 Pad 16-26 Pad 8-14 Pad Phase 1 5-18 Pad 8-14 Pad Phase 2 Average Fracs Per Day ? 60% increase to fracs per day ? ~$0.5MM per well savings ? Reduced pump time ? Reduced…
  71. Encana Investor Day Presentation – Encana Corp – slide 71
    6 WELL PRODUCTIVITY Top Performance vs Peers Data sourced from RS Energy Group, raw data provided by geoSCOUT. Peers include APA, MUR, RDS, TET, XOM 0 200 400 600 800 ECA Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 IP180 (bbls/d, BOE/d)…
  72. Encana Investor Day Presentation – Encana Corp – slide 72
    7 0 50 100 150 200 250 300 350 400 450 500 0 50 100 150 200 250 300 350 400 Cumulative Production (MBOE) Producing Days SN-VRGC Actuals SN-VRGC Type Curve VERY RICH GAS CONDENSATE (150-250 bbls/MMcf) Simonette North All…
  73. Encana Investor Day Presentation – Encana Corp – slide 73
    8 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 300 350 400 450 500 Cumulative Production (MBOE) Producing Days SS-VRGC Actuals SS-VRGC Type Curve VERY RICH GAS CONDENSATE (150-250 bbls/MMcf) Simonette South All…
  74. Encana Investor Day Presentation – Encana Corp – slide 74
    9 High CGR Gas Plants EXPANDING MARGINS Operating Cost Performance ? Dramatic reduction in operating costs ? Three plants on-stream since 2014 ? Optimized for liquids handling ? Reduced trucking from location >60% Improvement…
  75. Encana Investor Day Presentation – Encana Corp – slide 75
    10 DUVERNAY INCOME MARGIN All-In Profitability 5 0 10 15 20 25 30 Operating Margin F&D Non-well Capital Overhead Income Margin ? Premium returns at the corporate level ? Locations in the Duvernay deliver ~$25/BOE operating…
  76. Encana Investor Day Presentation – Encana Corp – slide 76
    11 High CGR Gas Plants STRATEGIC INFRASTRUCTURE INVESTMENT Investment in Infrastructure Reducing Operating Costs Gross Facility Capacity Gas Capacity 155 MMcf/d Liquids Handling 30,000 bbls/d 10-29 15-31 5-31 Semcams KA…
  77. Encana Investor Day Presentation – Encana Corp – slide 77
    12 Duvernay ? Condensate sales via pipeline to premium Edmonton market center ? Firm market access aligned with development program ? Achieved liquids price upgrade while minimizing midstream capex via Alliance pipeline ?…
  78. Encana Investor Day Presentation – Encana Corp – slide 78
    2 EAGLE FORD Core Position in the Oil Window ? Largely contiguous position in the Karnes Trough ? Most active and profitable trend in the Eagle Ford ? Continued well cost improvements ? Leading industry with well costs below $4 MM…
  79. Encana Investor Day Presentation – Encana Corp – slide 79
    3 CORE POSITION WITHIN THE EAGLE FORD Top Karnes County Producers 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 MRO EOG ECA COP PXD MUR DVN Gross Operated Oil Production (bbls/d) Data sourced…
  80. Encana Investor Day Presentation – Encana Corp – slide 80
    4 EAGLE FORD CAPITAL EFFICIENCY Better Wells For Lower Costs 0.0 0.5 1.0 1.5 Peer 1 ECA Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 $MM/1000? *Normalized to 5,000?. **Data sourced from latest peer IR presentations. Peers include BTE, DVN,…
  81. Encana Investor Day Presentation – Encana Corp – slide 81
    5 WELL PRODUCTIVITY 0 100 200 300 400 500 600 700 800 900 Peer 1 Peer 2 Peer 3 ECA Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Peer 18 IP180 (bbls/d, BOE/d) Oil…
  82. Encana Investor Day Presentation – Encana Corp – slide 82
    6 MARGINS & RETURNS 0 50 100 150 200 250 300 350 400 0 100 200 300 400 500 600 700 Cumulative Production (MBOE) Days on Production South-Central Karnes Average Well Results Type Curve Type Curve IP30 = 1,300 BOE/d 6 month…
  83. Encana Investor Day Presentation – Encana Corp – slide 83
    7 INNOVATION SUCCESS - FRAC COMPLEXITY Thinner Fluids & Tighter Clusters Early completions ? Bypassed pay Parameters ? >60? Clusters ? High Viscosity Fluid Tight spacing ? stress shadowing ? overwhelmed interior clusters…
  84. Encana Investor Day Presentation – Encana Corp – slide 84
    8 EAGLE FORD TIGHTER SPACING Improving Fracture Effectiveness ? Successful downspacing in Eagle Ford ? Greater overall resource recovery ? Greater stimulation intensity ? Increased fracture complexity ? Tighter cluster spacing ?…
  85. Encana Investor Day Presentation – Encana Corp – slide 85
    9 EAGLE FORD STACKED AND STAGGERED Triple Stacking with Complex Fractures 1H 2H 4H 6H 0 50 100 150 200 250 0 3 6 9 12 15 Cumulative Production (MBOE) Months Lower Eagle Ford Upper Eagle Ford Original Lower Eagle Ford ?…
  86. Encana Investor Day Presentation – Encana Corp – slide 86
    10 EAGLE FORD STACKED AND STAGGERED Austin Chalk Results 5 0 10 15 20 25 30 35 40 45 50 0 5 10 15 20 Cumulative Production (MBOE) Days Korth A 7 Korth A 8 Lower Eagle Ford Type Curve Early time flow data outpacing the…
  87. Encana Investor Day Presentation – Encana Corp – slide 87
    11 EXPANDING MARGINS Reducing Operating Costs Eagle Ford Operating Cost Reductions $4 $5 $6 $7 $8 $9 Q1 Q2 Q3 Q4 Q1 Q2 2015 2016 $/BOE ? Leveraging company-wide effort ? Optimized repairs, maintenance, and workovers ?…
  88. Encana Investor Day Presentation – Encana Corp – slide 88
    12 EAGLE FORD INCOME MARGIN All-In Profitability ? Premium returns at the corporate level ? Locations in the Eagle Ford deliver ~$28/BOE operating margin ? NRI F&D ~$10.00/BOE ? Non-well capital of $0.60/BOE ? G&A and interest…
  89. Encana Investor Day Presentation – Encana Corp – slide 89
    13 Eagle Ford MIDSTREAM AND MARKETING OVERVIEW ? Firm gas gathering and NGL processing aligned with asset development program ? Infield gathering and extensive market assets in place to ensure flow and downstream connectivity ?…
  90. Encana Investor Day Presentation – Encana Corp – slide 90
    14 ENCANA EAGLE FORD Tremendous Flex Asset ? 30-40,000 BOE/d by end of plan ? Free cash flow generator ? 5 year plan consumes current premium inventory ? Focus on transitioning remaining inventory into premium locations
  91. Encana Investor Day Presentation – Encana Corp – slide 91
    4 MAINTAINING FINANCIAL STRENGTH $1.15 Billion Equity Issuance 2017F CFPS 2018F CFPS Cash Flow per Share Impact ? Accretive to cash flow, reduces leverage metrics ? Double digit accretion to 2017 and 2018 cash flow per share ?…
  92. Encana Investor Day Presentation – Encana Corp – slide 92
    5 DISCIPLINED FINANCIAL MANAGEMENT Debt Portfolio as at September 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…
  93. Encana Investor Day Presentation – Encana Corp – slide 93
    6 36% 30%…
  94. Encana Investor Day Presentation – Encana Corp – slide 94
    7 0 20 40 60 80 100 120 140 2012 Avg - Column1 Column2 2016F $MM BUILDING ON OUR TRACK RECORD Delivering Corporate Cost Savings ? Normalized interest* on long term debt run rate ~$70 - $75 MM/quarter ? Interest expense…
  95. Encana Investor Day Presentation – Encana Corp – slide 95
    8 $0 $2 $4 $6 $8 $10 $12 Peer 1 Peer 2 ECA Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 $/BOE 2016 Interest/BOE 2016 G&A/BOE G&A & INTEREST $/BOE PEER COMPARISON Top Quartile Cost Performance Source:…
  96. Encana Investor Day Presentation – Encana Corp – slide 96
    9 REDUCING LONG TERM T&P COMMITMENTS Legacy Costs Continue to Drop $0 $200 $400 $600 $800 $1,000 $1,200 2014 2015 2016F 2017F 2018F 2019F 2020F 2021F Non-core Core $MM Transportation & Processing Commitments* *Represents…
  97. Encana Investor Day Presentation – Encana Corp – slide 97
    11 HEDGING PROGRAM Adds Greater Certainty to Cash Flow 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 3-Way Option 0 25 50 75 100 2016* 2017 Volume (Mbbls/d)…
  98. Encana Investor Day Presentation – Encana Corp – slide 98
    12 2016 GUIDANCE UPDATE Cost Performance Continues to Improve * Includes plant & field condensate .**Excluding restructuring and long-term incentive costs 2016 Guidance Feb 24, 2016 July 23, 2016 Oct 5, 2016 Capital Investment…
  99. Encana Investor Day Presentation – Encana Corp – slide 99
    13 Projected 2017 Program ? $1.4 - $1.8 B total capital ? Permian: $850MM to $1.0B ? Montney: $200 to $300MM ? EF + Duvernay: $300 to $450MM ? >90% of capital to DC&T ? Growth in core four begins mid-year ? 15-20% core four…
  100. Encana Investor Day Presentation – Encana Corp – slide 100
    14 250 350 450 550 650 2016F 2017F 2018F 2019F 2020F 2021F PRODUCTION GROWTH TRAJECTORY ? >60% total company production* growth ? Permian grows ~3x ? 4x ? Montney liquids grow ~4x ? 5x, gas grows ~2x ? Combination of Eagle Ford…

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