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Montney Update – Encana Corp

Encana Corp · Apr 19, 2017 · 31 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. Montney Update – Encana Corp – slide 1
  2. Montney Update – Encana Corp – slide 2
    ? Decades of technical and operational experience ? Focused on value and returns ? Track record of delivering on large scale programs at high efficiency ? Driving innovation and continuous improvement ? Knowledge and innovation flows…
  3. Montney Update – Encana Corp – slide 3
    Combined Scale and Efficiency 0 50 mi ? Largest producer in the Montney ? Drilling cost leader ? Over a decade of operations in the play ? Longest laterals with highest completion intensity ? Massive wells ? Wells up to 2.5 MMBoe,…
  4. Montney Update – Encana Corp – slide 4
    0 100 200 300 400 500 600 700 800 900 1,000 Gross Operated Production (MMcf/d) ENCANA IS THE LARGEST MONTNEY PRODUCER Montney Producers at a Glance Source : Industry data ? December 2016 production Montney ECA net…
  5. Montney Update – Encana Corp – slide 5
    Core Acreage in a Condensate Rich Play *Estimated inventory based on 440 - 880 ft spacing ? Encana?s Montney is a condensate play ? 5,900 premium condensate-rich inventory* ? Stacked horizontal development ? Over 1,000? of pay, up to…
  6. Montney Update – Encana Corp – slide 6
    ENCANA MONTNEY 5 Year Growth Profile - 200 400 600 800 1,000 1,200 1,400 2016 2017F 2018F 2019F 2020F 2021F MMcf/d ? Development focused in condensate rich areas ? Liquids production to >70 Mbbls/d by 2019 ? 50 Mbbls/d of…
  7. Montney Update – Encana Corp – slide 7
    MONTNEY 2017 Program FY 2017 Plan Acreage (net acres) 384,000 British Columbia (CRP) 292,000 Alberta (Pipestone) 92,000 Working Interest (%) 74% (includes Pipestone) Average Royalty Rate (%) 5 ? 10% Development Capital (net) $MM…
  8. Montney Update – Encana Corp – slide 8
    AGREEMENT WITH VERESEN MIDSTREAM Fee-for-Service Structure ? Maximizing flexibility while managing execution ? Encana/CRP* sold a portion of Montney infrastructure to Veresen Midstream & entered into gathering arrangement in 2015 ?…
  9. Montney Update – Encana Corp – slide 9
    Net Encana Capacity Icon Name Timing Gas* (MMcf/d) Condensate* (bbls/d) NGLs* (bbls/d) Existing Facilities Present Day 900 17,000 2,800 Tower Q4-2017 120 7,500 3,400 Sunrise Q4-2017 240 2,500 2,400 South-Central Liquids Hub…
  10. Montney Update – Encana Corp – slide 10
  11. Montney Update – Encana Corp – slide 11
    DESIGN & BUILD STRATEGY Modular Execution Strategy ? Modular Execution Strategy minimizes project costs ? Reduced plant footprint ? Optimized equipment layout ? Lowest capital cost compared to other design strategies ? >50% of the…
  12. Montney Update – Encana Corp – slide 12
    6 11 Gas Processing ? Encana bundled infrastructure model ? Larger and more efficient production growth ? Smaller environmental footprint with less risk of regulatory delays ? 15-30% lower total cost ? Lower operating costs…
  13. Montney Update – Encana Corp – slide 13
    TOWER SWEET GAS PLANT Projected Onstream: Q4 2017 Scope & Gross Capacity ? 200 MMcf/d sweet gas plant ? Bundled infrastructure model: ? Inlet liquids handling ? Inlet/sales compression ? NGL recovery ? Condensate stabilization ?…
  14. Montney Update – Encana Corp – slide 14
    SUNRISE SWEET GAS PLANT Projected Onstream: Q4 2017 Scope & Gross Capacity ? 400 MMcf/d sweet gas plant ? Bundled infrastructure model ? Inlet liquids handling ? Inlet/sales compression ? NGL recovery ? 5,700 bbls/day NGL (C3+)…
  15. Montney Update – Encana Corp – slide 15
    SATURN SWEET GAS PLANT Projected Onstream: Early 2018 Scope & Gross Capacity ? 400 MMcf/d sweet gas plant ? Bundled infrastructure model ? Inlet liquids handling ? Inlet/sales compression ? NGL recovery ? Train 1 retrofit ? 200…
  16. Montney Update – Encana Corp – slide 16
  17. Montney Update – Encana Corp – slide 17
    DIFFERENTIATED EXECUTION EFFICIENCY ? 60 - 70% of 2017 program locked in at contracted rates or selfsourced ? Ramped up to 2017 activity level in Q4 2016 ? Managing the supply chain ? Self-sourcing sand, water, OCTG, chemicals,…
  18. Montney Update – Encana Corp – slide 18
    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 return…
  19. Montney Update – Encana Corp – slide 19
    ? 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…
  20. Montney Update – Encana Corp – slide 20
    0 100 200 300 400 500 0 30 60 90 120 150 180 210 240 270 300 330 360 390 420 450 480 Cumulative MBOE Producing Days Type Curve 02-12 Pad 05-01 Pad D4-14 F4-14 RICH GAS CONDENSATE (50-150 bbls/MMcf) Tower Well Performance…
  21. Montney Update – Encana Corp – slide 21
    ? Situated in core of Alberta Montney ? Oil resource of ~45 MMbbls/section ? Condensate ratios up to 300 bbls/MMcf ? ~92,000 contiguous acres, 98%WI ? ~2,400 premium well inventory ? Up to 4 stacked HZ horizons ENCANA PIPESTONE…
  22. Montney Update – Encana Corp – slide 22
    0 50 100 150 200 250 300 0 20 40 60 80 100 120 140 160 180 Cumulative MBOE Producing Days 12-25 5-14 15-31 03/01-23 02/01-24 04-15 02/04-15 Type Curve VOLATILE OIL (>250 bbls/MMcf) Pipestone Well Performance Type Curve…
  23. Montney Update – Encana Corp – slide 23
    ? 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% WI ? ~1,100 premium well inventory ? Up to 5 stacked HZ…
  24. Montney Update – Encana Corp – slide 24
    ? 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% WI ? ~1,100 premium well inventory ? Up to 5 stacked HZ…
  25. Montney Update – Encana Corp – slide 25
    MONTNEY INCOME MARGIN All-In Profitability ? Premium returns at the corporate level ? Over 60% of revenue comes from condensate ? Montney delivers ~$14/BOE operating margin ? NRI F&D ~$4.00/BOE ? Non-well capital of $0.60/BOE ?…
  26. Montney Update – Encana Corp – slide 26
  27. Montney Update – Encana Corp – slide 27
    WESTERN CANADIAN NATURAL GAS FUNDAMENTALS Existing Available Capacity Exceeds Export Forecast Source: Encana Fundamentals, IHS Bcf/d 0 2 4 6 8 10 12 14 16 2005 2007 2009 2011 2013 2015 2017F 2019F Exports Export Capacity ?…
  28. Montney Update – Encana Corp – slide 28
    ENCANA WCSB MIDSTREAM AND MARKETING OVERVIEW ? NGTL system has ~11 BCF/d of capacity, >15,000 miles of pipeline, and thousands of receipt & delivery points ? Firm takeaway contracted for 100% expected ECA Montney gas growth ?…
  29. Montney Update – Encana Corp – slide 29
    MARKET ACCESS & PRICE RISK MANAGEMENT Minimizing AECO Price Exposure* 475 MMcf/d 100 MMcf/d to Sumas/Malin 80 MMcf/d to Chicago 316 MMcf/d to Dawn Less than 1/3 2018F - 2020F AECO Exposure Physical Export Transport** AECO…
  30. Montney Update – Encana Corp – slide 30
    WESTERN CANADIAN CONDENSATE FUNDAMENTALS Premium Condensate Market Source: RBC Capital Markets and Government Data 0.00 0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 2000 2002 2004 2006 2008 2010 2012…
  31. Montney Update – Encana Corp – slide 31
    ENCANA MONTNEY 5 Year Growth Profile - 200 400 600 800 1,000 1,200 1,400 2016 2017F 2018F 2019F 2020F 2021F MMcf/d ? Delivering industry leading cash flow growth and returns ? Condensate rich development focus ? Diversified…

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