Skip to main content April 2018 Corporate Presentation – Encana Corp | Shale Experts
Loading...
Pm

April 2018 Corporate Presentation – Encana Corp

Encana Corp · Apr 7, 2018 · 59 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 2018 Corporate Presentation – Encana Corp – slide 1
  2. April 2018 Corporate Presentation – Encana Corp – slide 2
    ENCANA Value Proposition TOP TIER MARKET RESOURCE FUNDAMENTALS ? Encana today: ? Great portfolio with large inventory ? Strong balance sheet ? Disciplined capital allocation ? Leading growth ? cash flow,…
  3. April 2018 Corporate Presentation – Encana Corp – slide 3
    FOCUSED ON SHAREHOLDER RETURNS ~$3 Billion of Free Cash FlowT Over Five Year Plan $400 million share repurchase program to be initiated in Q1 2018(a) ~$3 billion of cumulative free cash flowT (2018-2022F)* Balance sheet…
  4. April 2018 Corporate Presentation – Encana Corp – slide 4
    FOCUS ON QUALITY CORPORATE RETURNS Our Business Works Today Strategy Execution ? World class portfolio of assets ? Track record of delivery ? Execution excellence ? Culture of innovation both technical and commercial ? Market…
  5. April 2018 Corporate Presentation – Encana Corp – slide 5
    AN OPERATOR INVESTORS CAN COUNT ON Increasing Value & Resiliency 2017-2022F Cash FlowT ~25% CAGR ? Updated 5 year plan is better across the board 5,000 4,000 ? Maintaining efficiencies in a busier industry ($MM) 3,000 ?…
  6. April 2018 Corporate Presentation – Encana Corp – slide 6
    RESILIENT BUSINESS MODEL Capital Discipline & Risk Management ? Multi-basin portfolio ? Short cycle capital ? Highly focused capital allocation ? Integrated supply chain ? Flexible commercial arrangements ?…
  7. April 2018 Corporate Presentation – Encana Corp – slide 7
    FOCUS ON CORPORATE RETURNS Differentiated ROCE ? Independent analysis of over 50 North American E&P?s ? Encana ?set to deliver above average ROCET through 2019?* ? Assumptions / Methodology* ? Projected ROCET based on…
  8. April 2018 Corporate Presentation – Encana Corp – slide 8
    MARGIN EXPANSION CONTINUES Profitable Growth ? Cash flow marginT continues to grow ? 2017 cash flow marginT up 81% versus 2016 ? Liquids mix ? Higher realized pricing ? Lower operating and corporate costs ? 2018 cash flow…
  9. April 2018 Corporate Presentation – Encana Corp – slide 9
    5 YEAR PLAN Production Growth Within Cash Flow ? Resilient to operational risk ? Focus on high margin production ? Continuous improvement drives quality corporate returns ? Liquids production CAGR of ~20% ? Leading…
  10. April 2018 Corporate Presentation – Encana Corp – slide 10
    MARGIN GROWTH DRIVEN BY LIQUIDS Premium Liquids Markets and Diversified Gas Markets ? >70% revenue from liquids ? Oil and condensate priced at ~WTI accounts for ~65% of revenue ? Canadian Condensate ~ at par with WTI ?…
  11. April 2018 Corporate Presentation – Encana Corp – slide 11
    2018 GUIDANCE Cash FlowT and Production Growing >30% ? Capital balanced with expected cash flowT ? Total production is 95% from core assets ? Annual production growth of >30% excluding dispositions ? Q4 core asset production…
  12. April 2018 Corporate Presentation – Encana Corp – slide 12
    GROWING MARGIN & CASH FLOW IN 2018 Ahead of Plan on 5 Year Outlook 2018 Full Year: ? Capital and cash flow balanced ? > 30% annual production growth on core assets ? Growth profile back half weighted ? Cash Flow margin up…
  13. April 2018 Corporate Presentation – Encana Corp – slide 13
    WORLD CLASS PORTFOLIO Encana\'s Resource In Context ? Core positions in four of North America?s premier basins ? >23,000 total inventory locations ? ~11,000 premium return locations ? >35% ATRORT returns ? Oil or…
  14. April 2018 Corporate Presentation – Encana Corp – slide 14
    PERMIAN BASIN Highly Efficient Development at Scale ? Developing the cube ? Critical to creating value at industrial scale ? Reservoir & above-ground benefits ? Natural extension of our experience & capabilities ? Stacked…
  15. April 2018 Corporate Presentation – Encana Corp – slide 15
    MONTNEY Driving Margin Expansion ? Encana?s Montney is a condensate play ? Receives ~WTI pricing ? Stacked horizontal development ? Over 1,000? of pay, up to 6 stacked horizons ? Completions design driving productivity…
  16. April 2018 Corporate Presentation – Encana Corp – slide 16
    EAGLE FORD Technical Innovation Unlocking Value ? Largely contiguous position in the Karnes Trough ? Most active and profitable trend in the Eagle Ford ? Completion innovations leading to better wells ? Stacked pay, infill…
  17. April 2018 Corporate Presentation – Encana Corp – slide 17
    DUVERNAY Industry Leading Well Performance ? Large contiguous land base within condensate window ? WTI pricing for condensate ? Significant future growth opportunity ? Highly efficient operating performance ? Multi-well…
  18. April 2018 Corporate Presentation – Encana Corp – slide 18
    TECHNOLOGY & INNOVATION LEADERSHIP AT ENCANA A Competitive Advantage Subsurface ? Geo-cellular reservoir modeling to identify the best rocks ? Leveraging massive proprietary analytics dataset (core, logs, seismic,…
  19. April 2018 Corporate Presentation – Encana Corp – slide 19
    INNOVATION IN OPERATIONS Driven By Culture ? Chiefs organizational structure ? Promotes rapid transfer of technology between plays ? Rapidly translated success in tight cluster design from Eagle Ford to other plays ? Scaling…
  20. April 2018 Corporate Presentation – Encana Corp – slide 20
    INNOVATION IN ACTION Evolution in Completion Design Fueling Growth ? Advanced completion design is focused on creating better wells for lower costs ? Applying completions intensity thoughtfully ? Tight clusters and optimized…
  21. April 2018 Corporate Presentation – Encana Corp – slide 21
    CUBE DEVELOPMENT ABOVE-GROUND BENEFITS Development at Industrial Scale ? Highly efficient, agile development Multi-well ? Multi-well pads Pads ? Higher utilization of services & infrastructure Water Multi-rig, ?…
  22. April 2018 Corporate Presentation – Encana Corp – slide 22
    CUBE DEVELOPMENT Differentiated Execution ? Reservoir benefits ? Optimizes resource recovery ? Minimizes inter-wellbore communication ? Less downtime on existing wells ? Eliminates ?parent-child? in-fill drilling ? No…
  23. April 2018 Corporate Presentation – Encana Corp – slide 23
    CUBE DEVELOPMENT Improved Resource Recovery & Efficiency ? Higher recovery from stacked pay reservoirs Cube Development Maximizing Recovery from the Stack ? Generating effective draw down within cube ? Highly efficient, agile…
  24. April 2018 Corporate Presentation – Encana Corp – slide 24
    COMMERCIAL INNOVATION Delivering Value in any Environment ECA 2018 D&C Cost Breakdown ? Fully offsetting service cost inflation with sourcing and ~35% of well cost is drilling efficiency improvements ~65% of well cost is…
  25. April 2018 Corporate Presentation – Encana Corp – slide 25
    RISK MANAGEMENT Adds Greater Certainty to Cash Flow and De-Risks Capital Program ? 2018 Price sensitivity to a $5 decrease to WTI is about $120 million to cash flow ? 2018 Price sensitivity to a $0.25 decrease to NYMEX gas is…
  26. April 2018 Corporate Presentation – Encana Corp – slide 26
    BASIS RISK MANAGEMENT PROGRAM Market Access & Price Risk Management ? Western Canada ? Realized price including hedge expected to be ~$0.45 below NYMEX in 2018 ? AECO US$0.25 fluctuation equals less than US$15MM cash flow in…
  27. April 2018 Corporate Presentation – Encana Corp – slide 27
  28. April 2018 Corporate Presentation – Encana Corp – slide 28
    ENCANA?S POTENTIAL PREMIUM RETURN INVENTORY Only Premium Inventory Consumed in Growth Plan Permian Basin Montney Premium 12,000 well inventory 9,600 well inventory Inventory 3,450 premium locations 6,900…
  29. April 2018 Corporate Presentation – Encana Corp – slide 29
    PERMIAN 2018 Program 2018 Program FY 2018 Plan Acreage (net acres) 118,000 ? 30% growth from FY2017 to FY2018 Average Working Interest (%) 94% ? 70% program focused in Midland/Martin Average Royalty Rate (%)…
  30. April 2018 Corporate Presentation – Encana Corp – slide 30
    PERMIAN CONTINUES STRONG EXECUTION Targeting 30% Annual Growth Permian Cube Performance ? Finished 2017 ahead of plan with Q4 production of >82MBOE/d 175 (MBOE)* 150 ? Innovation continues to drive well productivity…
  31. April 2018 Corporate Presentation – Encana Corp – slide 31
    CUBE DEVELOPMENT ABOVE-GROUND BENEFITS Effective Water Management ? Improves capital efficiency and de-risks supply ? 3 frac spreads per hub ? Simple and effective catch basin design Martin County ? Central Water Resource…
  32. April 2018 Corporate Presentation – Encana Corp – slide 32
    PERMIAN 5 Year Growth Profile ? ~50% of Encana?s capital directed to the Permian in 2018 ? Permian production expected to grow 3x ? 5 year CAGR 25% ? Quality inventory with scale ? No infrastructure or midstream…
  33. April 2018 Corporate Presentation – Encana Corp – slide 33
    MIDSTREAM AND MARKETING OVERVIEW Permian Gathering system links production to Colorado pipeline hubs City Midland Pipelines connect to Cushing and Crane Gulf Coast Permian Permian: Proximity to market and…
  34. April 2018 Corporate Presentation – Encana Corp – slide 34
    PERMIAN BASIN FUNDAMENTALS Past & Future Pipeline Capacity Expansions Align with Growth Crude Oil Production / Takeaway Capacity (Mbbls/d) 5,000 Potential…
  35. April 2018 Corporate Presentation – Encana Corp – slide 35
    PERMIAN RESERVOIR Massive Potential with Stacked Benches Zone Martin Midland/ Glasscock Howard Upton Clear Fork ? ? M. SPBY ? ? Jo Mill ? ? L. SPBY ? ? ? ? L. SPBY- 2nd ? ? ? ? WCMP A ? ? ? ? WCMP A-…
  36. April 2018 Corporate Presentation – Encana Corp – slide 36
    PREMIUM INCREASE OUTPACING DRILLING Gross Premium Return Inventory County Midland/ Martin Howard Glasscock Upton IP30 (BOE/d) 985 950 825 800 IP180 (BOE/d) 700 650 600 550 EUR/Well…
  37. April 2018 Corporate Presentation – Encana Corp – slide 37
    MONTNEY 2018 Program FY 2018 Plan 2018 Program Acreage (net acres) 379,000 British Columbia (CRP) 289,000 ? 2018 significant production growth while generating Alberta (Pipestone) 90,000 free cash flow Working Interest (%)…
  38. April 2018 Corporate Presentation – Encana Corp – slide 38
    DIVERSIFIED MARKET EXPOSURE IN WESTERN CANADA Portfolio Approach to Price Risk Management 100% firm capacity on Nova Gas Transmission System (NGTL) Condensate sold into premium Condensate local…
  39. April 2018 Corporate Presentation – Encana Corp – slide 39
    MONTNEY DELIVERING CONDENSATE GROWTH Significant Margin Expansion ? Margin expansion driven by liquids growth ? Liquids more than doubled from Q4/16 to Q4/17 and are set to double again in Q4/18 to 55-65Mbbls/d ? Cube…
  40. April 2018 Corporate Presentation – Encana Corp – slide 40
    MONTNEY CASH FLOW GROWTH High Quality Condensate Play ? Montney growth has been self-funded ? Transition to liquids and increase in scale driving margin expansion ? 2018 significant production growth while generating free cash…
  41. April 2018 Corporate Presentation – Encana Corp – slide 41
    AGREEMENT WITH VERESEN MIDSTREAM Fee-for-Service Structure All 3 Montney Plants On-Stream ? Tower, Sunrise and Saturn plants on-stream Q4 2017 ? Facilities came on ahead of schedule and under budget ? Encana designed, built…
  42. April 2018 Corporate Presentation – Encana Corp – slide 42
    MONTNEY INFRASTRUCTURE PLAN Liquids Handling Capacity Supports Growth & Flexibility Net Encana Capacity Icon Name Anticipated Gas* Condensate* NGLs* Timing (MMcf/d) (bbls/d) (bbls/d) Existing Facilities…
  43. April 2018 Corporate Presentation – Encana Corp – slide 43
    ENCANA MONTNEY 5 Year Growth Profile ? Development focused in condensate rich areas ? 2018 program to fill new liquids capacity ? Additional capacity comes online late 2018 ? Operating margin expected to increase >40% by…
  44. April 2018 Corporate Presentation – Encana Corp – slide 44
    MONTNEY Cutbank Ridge Partnership (CRP) ? Partnership with a subsidiary of Mitsubishi ? Encana: 60% interest ? Mitsubishi: 40% interest ? Investment structure (C$2.9B) ? C$1.45 billion upfront in 2012 ? Further…
  45. April 2018 Corporate Presentation – Encana Corp – slide 45
    MONTNEY Gross Premium Return Inventory Region Tower Dawson South Pipestone Type Wet Gas Gas Rich Gas Wet Gas Gas Gas Rich Gas Very Rich Gas Volatile Oil Condensate Condensate Condensate Condensate Condensate…
  46. April 2018 Corporate Presentation – Encana Corp – slide 46
    EAGLE FORD & DUVERNAY Quality Assets Generating Free Operating Cash Flow ? Completions design continues to drive productivity improvements and expand inventory ? Eagle Ford and Austin Chalk ahead of type curve ? Duvernay…
  47. April 2018 Corporate Presentation – Encana Corp – slide 47
    EAGLE FORD 2018 Program FY 2018 Plan Acreage (net acres) 42,000 2018 Program Average Working Interest (%) 92% Average Royalty Rate (%) 20 ? 25% ? Maximize free operating cash flow Development Capital (net) $MM $270 -…
  48. April 2018 Corporate Presentation – Encana Corp – slide 48
    MIDSTREAM AND MARKETING OVERVIEW Eagle Ford Close proximity to market and well-developed infrastructure ? Firm gas gathering and NGL processing aligned with asset development program ? Infield gathering and extensive…
  49. April 2018 Corporate Presentation – Encana Corp – slide 49
    EAGLE FORD Gross Premium Return Inventory Type Curve Eagle Ford Austin Chalk IP30 (BOE/d) 1200 1400 IP180 (BOE/d) 950 1040 ? 220 premium return EUR/Well (Mbbls) 490 590 inventory locations ?…
  50. April 2018 Corporate Presentation – Encana Corp – slide 50
    DUVERNAY 2018 Program FY 2018 Plan 2018 Program Simonette Acreage (net acres) 91,000 ? Maximize free operating cash flow Average Working Interest (%) 50% Average Royalty Rate (%) 5 ? 10% ? Strong margin driven…
  51. April 2018 Corporate Presentation – Encana Corp – slide 51
    MIDSTREAM AND MARKETING OVERVIEW Duvernay Condensate to Edmonton market center Duvernay Alliance Pipeline to U.S. Midwest (Chicago) ? Condensate sales via pipeline to premium Edmonton market…
  52. April 2018 Corporate Presentation – Encana Corp – slide 52
    DUVERNAY Gross Premium Return Inventory Region Simonette South Simonette North Type Rich Gas Condensate Very Rich Gas Rich Gas Condensate Very Rich Gas Condensate Condensate IP30 (BOE/d) 1,550 ?…
  53. April 2018 Corporate Presentation – Encana Corp – slide 53
    SAN JUAN BASIN Evaluating Liquids Growth Potential ? Strong 2017 well results ? 5 Tocito wells exceeding type curve expectations ? Targeted best rock with transverse orientation and advanced completion design to generate more frac…
  54. April 2018 Corporate Presentation – Encana Corp – slide 54
  55. April 2018 Corporate Presentation – Encana Corp – slide 55
    MAXIMIZING MARGIN Cost Control of Corporate Items Enhances Per Unit Margin ? Benefit of scale driving lower per unit BOE costs ? Reducing costs & growing production volumes Corporate Items Cost Control ? Interest…
  56. April 2018 Corporate Presentation – Encana Corp – slide 56
    PRODUCT VALUE CHAIN Projected Composition of Total Production Canada US 2018F* 2018F Pricing 2018F* 2018F Pricing (Mbbls/d) (%WTI) (Mbbls/d) (%WTI) Oil 0 ? 1 98% 87 ? 90 100% Condensate** 38 ? 40 98% 3 ? 4…
  57. April 2018 Corporate Presentation – Encana Corp – slide 57
    WESTERN CANADIAN CONDENSATE FUNDAMENTALS Premium Condensate Market Condensate demand in western Canada is expected to outstrip domestic supply ? with imports bridging the gap Source: RBC Capital Markets and…
  58. April 2018 Corporate Presentation – Encana Corp – slide 58
    DISCIPLINED FINANCIAL MANAGEMENT Access to Ample Liquidity Through 2020 ? $4.5B fully committed, unsecured, revolving credit facilities ? $4.5B available at December 31, 2017 ? Committed to July 2020 ? No use of credit…
  59. April 2018 Corporate Presentation – Encana Corp – slide 59
    DISCIPLINED FINANCIAL MANAGEMENT Debt Portfolio as at December 31, 2017 ? Total debt reduced by ~$3 billion since Y/E 2014 ? Significant financial flexibility with no debt maturities until 2019 ? ~75% of fixed rate long-term…

From the store

Browse maps, data & reports in the Shale Experts store