Skip to main content April 2017 Investor Presentation – Encana Corp | Shale Experts
Loading...
Pm

April 2017 Investor Presentation – Encana Corp

Encana Corp · Apr 13, 2017 · 57 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. April 2017 Investor Presentation – Encana Corp – slide 1
  2. April 2017 Investor Presentation – Encana Corp – slide 2
    ? Core positions in four of North America?s premier basins ? Over 20,000 total inventory locations ? ~10,000 potential premium return locations ? >35% ATROR? returns ? Oil or condensate rich wells only ? Primary zones only* ?…
  3. April 2017 Investor Presentation – Encana Corp – slide 3
    - 1,000 2,000 3,000 4,000 2016 2017F 2018F 2019F 2020F 2021F 5 YEAR CAPITAL, PRODUCTION & CASH FLOW OUTLOOK Self-Funding Capital Program Post 2017 ? Projected >300% cash flow?* growth ? Focus on high margin production amplifies…
  4. April 2017 Investor Presentation – Encana Corp – slide 4
    ? 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 $5…
  5. April 2017 Investor Presentation – Encana Corp – slide 5
    MONTNEY Core Acreage in a Condensate Rich Play *Estimated inventory based on 440 - 880 ft spacing; **Compound annual growth rate ? Encana?s Montney is a condensate play ? 5,900 premium condensate-rich inventory* ? Stacked horizontal…
  6. April 2017 Investor Presentation – Encana Corp – slide 6
    EAGLE FORD Core Position in the Oil Window ? Largely contiguous position in the Karnes Trough ? Most active and profitable trend in the Eagle Ford ? Continued well cost improvements ? Industry leading well costs ? Well inventory…
  7. April 2017 Investor Presentation – Encana Corp – slide 7
    ? Large contiguous land base within core of play ? Significant growth opportunity ? 1,000 total locations, 500 premium locations ? Industry leading operating performance ? Multi-well pads and in-place infrastructure significantly…
  8. April 2017 Investor Presentation – Encana Corp – slide 8
    2017 GUIDANCE 2017F Guidance Capital Investment ($MM) 1,600 ? 1,800 Natural Gas (MMcf/d) 1,150 ? 1,200 Total Liquids (Mbbls/d) 125 ? 130 % Oil and Condensate* 80 ?85% % Natural Gas Liquids 15 ?20% Total Production (MBOE/d) 320 ?…
  9. April 2017 Investor Presentation – Encana Corp – slide 9
    0 20 40 60 80 100 120 140 1Q17F 2Q17F 3Q17F 4Q17F Mbbls/d Oil & Condensate 200 250 300 350 400 1Q17F 2Q17F 3Q17F 4Q17F MBOE/d Total Production 0 10 20 30 1Q17 F 2Q17 F 3Q17 F 4Q17 F Mbbls/d NGL (C2 ? C4) 1,000…
  10. April 2017 Investor Presentation – Encana Corp – slide 10
    DOUBLING THE CORPORATE MARGIN BY 2018 * Corporate margin for 2017/18 calculated at $55 WTI and $3.00 NYMEX **2016 production adjusted for divested assets . ? Non-GAAP measures defined in advisories. For additional information regarding…
  11. April 2017 Investor Presentation – Encana Corp – slide 11
    0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Full-year of Montney Plants IMPROVING PRODUCTION EFFICIENCY FOR 2018 Driven by Capital Allocation and Plant Timing Improving Exit Production Efficiency $/BOE/d 100 200 300…
  12. April 2017 Investor Presentation – Encana Corp – slide 12
    VALUE FOCUS AT ENCANA Delivering Premium Returns and Margins 0 5 10 15 20 25 30 Operating Margin F&D Non-well Capital G&A and Interest Expense Income Margin $25.00/BOE >$13.00/ BOE $8.00/ BOE $0.60/BOE 2017-2021 ECA…
  13. April 2017 Investor Presentation – Encana Corp – slide 13
    Self-Funding Program 2018 OUTLOOK ? Self-funding capital program ? >400 MBOE/d total annual production ? >30% growth in core asset production 4Q17 to 4Q18 ? Leverage drops to ~2x D/DACF
  14. April 2017 Investor Presentation – Encana Corp – slide 14
    RISK MANAGEMENT PROGRAM Adds Greater Certainty to Cash Flow and De-Risks Capital Program 0 25 50 75 100 2017 * 2018 Volume (Mbbls/d) Oil and Condensate Positions WTI Fixed Price Swap $52.20/bbl WTI 3-Way Option WTI Fixed Price…
  15. April 2017 Investor Presentation – Encana Corp – slide 15
    DIFFERENTIATED EXECUTION EFFICIENCY ? 60 - 70% of 2017 program locked in at contracted rates or selfsourced ? Ramped up to 2017 activity level in Q4 2016 ? Managing the supply chain ? Self-sourcing sand, water, OCTG, chemicals,…
  16. April 2017 Investor Presentation – Encana Corp – slide 16
  17. April 2017 Investor Presentation – Encana Corp – slide 17
    ENCANA?S POTENTIAL PREMIUM RETURN INVENTORY Only Premium Inventory Consumed in Growth Plan Permian Basin Montney Eagle Ford Duvernay 10,000 well inventory 2,750 premium locations ~1,000 wells drilled in 5 year plan Premium…
  18. April 2017 Investor Presentation – Encana Corp – slide 18
    PERMIAN 2017 Program FY 2017 Plan Acreage (net acres) 127,000 Average Working Interest (%) 91% Average Royalty Rate (%) 20 ? 25% Development Capital (net) ($MM) $775 ? 850 Rig Count 5 HZ Wells Drilled (net) 135 ? 145 HZ Wells…
  19. April 2017 Investor Presentation – Encana Corp – slide 19
    PERMIAN Core Position Martin Midland Howard Glasscock Upton Reagan
  20. April 2017 Investor Presentation – Encana Corp – slide 20
    PERMIAN 5 Year Growth Profile - 20 40 60 80 100 120 140 160 180 2016 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 CAGR* 30% ?…
  21. April 2017 Investor Presentation – Encana Corp – slide 21
    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…
  22. April 2017 Investor Presentation – Encana Corp – slide 22
    PERMIAN COMPETITOR BENCHMARKING Leading Acreage & Completion Design ? Encana wells among the top performers in Midland Basin ? Encana average IP180 of >500 BOE/d ? Data from >2,000 horizontal wells since 2014 normalized to 7,500?…
  23. April 2017 Investor Presentation – Encana Corp – slide 23
    PERMIAN RESERVOIR Zone Mar tin 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…
  24. April 2017 Investor Presentation – Encana Corp – slide 24
    Permian MIDSTREAM AND MARKETING OVERVIEW Permian Color ado City Midland Cr ane Pipelines to Cushing and Gulf Coast Permian: Proximity to market and environment of responsive infrastructure development Secured capacity on…
  25. April 2017 Investor Presentation – Encana Corp – slide 25
    Past & Future Pipeline Capacity Expansions Align with Growth PERMIAN BASIN FUNDAMENTALS Source: Wells Fargo Securities 2017 Incremental Announcements Pipeline Nameplate Capacity Adds (Mbbls/d) BridgeTex +100 (Q2 2017) Cactus +60…
  26. April 2017 Investor Presentation – Encana Corp – slide 26
    PERMIAN Gross Premium Return Inventory County Midland Martin Howard Glasscock Zone WOLFCAMP SPRABERRY SPRABERRY WOLFCAMP SPRABERRY WOLFCAMP SPRABERRY IP30 (BOE/d) 700 900 700 825 675 825 675 IP180 (BOE/d) 550 600 525 575 500 575 500…
  27. April 2017 Investor Presentation – Encana Corp – slide 27
    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…
  28. April 2017 Investor Presentation – Encana Corp – slide 28
    MONTNEY Core Position Pipestone (up to 4 laterals) Tower/Dawson (up to 6 laterals) 650? Montney 1,000? Montney Alberta Pipestone Tower Dawson South B.C. 40mi Cross Section Crosssection Strat
  29. April 2017 Investor Presentation – Encana Corp – slide 29
    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 ? Operating margin? increases by >200% by 2021 ? Liquids production…
  30. April 2017 Investor Presentation – Encana Corp – slide 30
    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 ? Corporate…
  31. April 2017 Investor Presentation – Encana Corp – slide 31
    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 liquids ?…
  32. April 2017 Investor Presentation – Encana Corp – slide 32
    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 ?…
  33. April 2017 Investor Presentation – Encana Corp – slide 33
    Montney MIDSTREAM AND MARKETING OVERVIEW ? Staggered firm service contracts into NGTL ? Sufficient takeaway for Montney gas growth ? Domestic market for condensate ? Market premiums to incentivize imports from the U.S. ? Firm…
  34. April 2017 Investor Presentation – Encana Corp – slide 34
    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 ? Cadomin…
  35. April 2017 Investor Presentation – Encana Corp – slide 35
    MONTNEY Gross Premium Return Inventory Region Tower Dawson South Pipestone Type Wet Gas Gas Condensate Rich Gas Condensate Wet Gas Gas Condensate Gas Condensate Rich Gas Condensate Very Rich Gas Condensate Volatile Oil…
  36. April 2017 Investor Presentation – Encana Corp – slide 36
    EAGLE FORD 2017 Program FY 2017 Plan Acreage (net acres) 42,500 Average Working Interest (%) 91% Average Royalty Rate (%) 20 ? 25% Development Capital (net) $MM $235 ? 265 Rig Count 2 Wells Drilled (net) 50 ? 60 Wells on Stream…
  37. April 2017 Investor Presentation – Encana Corp – slide 37
    EAGLE FORD Core Position Karnes Lateral length Inventory Return Inventory Encana Lanc Basin Core Operator Acreage Map
  38. April 2017 Investor Presentation – Encana Corp – slide 38
    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 expense…
  39. April 2017 Investor Presentation – Encana Corp – slide 39
    PORTFOLIO ADVANTAGE Top Austin Chalk Results Devon 5H IP30: 2,140 BOE/d Devon 6H IP30: 1,000 BOE/d Encana 7H IP30: 2,000 BOE/d Encana 8H IP30: 3,100 BOE/d Gulftex 103H IP30: 2,250 BOE/d Gulftex 104H IP30: 2,300 BOE/d…
  40. April 2017 Investor Presentation – Encana Corp – slide 40
    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 ? Diverse…
  41. April 2017 Investor Presentation – Encana Corp – slide 41
    ENCANA EAGLE FORD TYPE CURVES Gross Premium Return Inventory Type Curve Lower Eagle Ford Austin Chalk* IP30 (BOE/d) 950 950 IP180 (BOE/d) 650 900 EUR/Well (Mbbls) 370 590 EUR/Well (MBOE) 570 770 GOR 2,500 1,500 Gross Premium…
  42. April 2017 Investor Presentation – Encana Corp – slide 42
    DUVERNAY 2017 Program FY 2017 Plan Acreage (net acres) 335,000 Simonette 93,000 Willesden Green 214,000 Edson/Pinto 28,000 Average Working Interest (%) 50% Average Royalty Rate (%) 5 ? 10% Development Capital (net) $MM $60 ? 70…
  43. April 2017 Investor Presentation – Encana Corp – slide 43
    DUVERNAY Core Position 12 miles Alberta Simonette North Simonette South 140? Duvernay Strat Cross Sectino
  44. April 2017 Investor Presentation – Encana Corp – slide 44
    DUVERNAY INCOME MARGIN All-In Profitability 0 5 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…
  45. April 2017 Investor Presentation – Encana Corp – slide 45
    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 Keyerra Simonette…
  46. April 2017 Investor Presentation – Encana Corp – slide 46
    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 ? Diversified…
  47. April 2017 Investor Presentation – Encana Corp – slide 47
    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…
  48. April 2017 Investor Presentation – Encana Corp – slide 48
    ENCANA DUVERNAY Gross Premium Return Inventory Region Simonette South Simonette North Type Rich Gas Condensate Very Rich Gas Condensate Rich Gas Condensate Very Rich Gas Condensate IP90 (MMcf/d) 4 - 6 3 - 5 3.5 ? 4.5 2.5 ? 3.5…
  49. April 2017 Investor Presentation – Encana Corp – slide 49
  50. April 2017 Investor Presentation – Encana Corp – slide 50
    LIQUIDS VALUE CHAIN Projected Composition of Total Liquids Production *2017F based on company guidance as at February 16, 2017; production ranges are not additive; **Includes plant condensate Liquids primarily comprised of…
  51. April 2017 Investor Presentation – Encana Corp – slide 51
    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…
  52. April 2017 Investor Presentation – Encana Corp – slide 52
    0 20 40 60 80 100 120 140 2012 Avg - Column1 Column2 2017F $MM BUILDING ON OUR TRACK RECORD Delivering Corporate Cost Savings ? Normalized interest* on long term debt run rate ~$70 MM/quarter ? Interest expense reduced as a…
  53. April 2017 Investor Presentation – Encana Corp – slide 53
    36% 30% 28% 23% 0% 10% 20% 30% 40% 50% 60% 70% 80% YE 2013 YE 2014 YE 2015 YE 2016 ? $4.5B fully committed, unsecured, revolving credit facilities ? $4.5B available at December 31st, 2016 ? Committed to July 2020 ? No use…
  54. April 2017 Investor Presentation – Encana Corp – slide 54
  55. April 2017 Investor Presentation – Encana Corp – slide 55
    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 $MM Transportation & Processing Commitments* *Represents…
  56. April 2017 Investor Presentation – Encana Corp – slide 56
    2017F ENCANA CORPORATE GUIDANCE US$, U.S. GAAP February 16, 2017 2017F Capital Investment ($ billions) Total Capital Investment 1.6 ? 1.8 Production(after royalties) Natural Gas (MMcf/d) 1,150 ? 1,200 Liquids (Mbbls/d) 125 ? 130…
  57. April 2017 Investor Presentation – Encana Corp – slide 57
    Upstream Operating Expense (2) 3.75 ? 4.25 Transportation and Processing 6.50 ? 7.00 Administrative Expense (2) 1.40 ? 1.60 Production, Mineral & Other Taxes (% of Revenue (3)) 3.75 ? 4.25% 1. Includes plant & field condensate. 2. Ex…

From the store

Browse maps, data & reports in the Shale Experts store