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

December 2018 Corporate Presentation – Encana Corp

Encana Corp · Dec 28, 2018 · 60 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. December 2018 Corporate Presentation – Encana Corp – slide 1
  2. December 2018 Corporate Presentation – Encana Corp – slide 2
    • Encana today: – Great portfolio with large inventory – Strong balance sheet – Disciplined capital allocation – Leading growth – cash flow, margin and liquids production – Culture of innovation and execution • ~$3 billion of…
  3. December 2018 Corporate Presentation – Encana Corp – slide 3
    FOCUSED ON SHAREHOLDER RETURNS ~$3 Billion of Free Cash Flow? Over Five Year Plan Repurchased 20.7MM shares for ~$250MM Q3 YTD ~$3 billion of cumulative free cash flow? (2018-2022F)* Balance sheet discipline
  4. December 2018 Corporate Presentation – Encana Corp – slide 4
    Return on Capital Employed grows over the 5 year plan ~25% Cash Flow CAGR 2018F – 2022F ~$3.0 Billion Free Cash Flow 2018F – 2022F
  5. December 2018 Corporate Presentation – Encana Corp – slide 5
    AN OPERATOR INVESTORS CAN COUNT ON Increasing Value & Resiliency • Updated 5 year plan is better across the board ? Maintaining efficiencies in a busier industry ? Major facility milestones achieved ahead of schedule & under budget…
  6. December 2018 Corporate Presentation – Encana Corp – slide 6
    RESILIENT BUSINESS MODEL Capital Discipline & Risk Management Net Debt to Adjusted EBITDA Non-GAAP measures defined in advisories. For additional information regarding non-GAAP measures see the Company’s website. 3.2x 2.3x 1.6x…
  7. December 2018 Corporate Presentation – Encana Corp – slide 7
    MARGIN EXPANSION CONTINUES Profitable Growth • Cash flow margin? continues to grow • 2017 cash flow margin? up 81% versus 2016 ? Liquids mix ? Higher realized pricing ? Lower operating and corporate costs • 2018 cash flow margin?…
  8. December 2018 Corporate Presentation – Encana Corp – slide 8
    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 capital and…
  9. December 2018 Corporate Presentation – Encana Corp – slide 9
    2018 GUIDANCE UPDATE Free Cash Flow? Positive in 2018 On track to deliver liquids growth • 2018F cash flow margin? >$16/BOE ($14/BOE original) – Driven by high value liquids growth • Cost structure in excellent shape – T&P expected…
  10. December 2018 Corporate Presentation – Encana Corp – slide 10
    THE STRATEGY IS WORKING Liquids Growth + Margin Growth = Cash Flow Growth Q3 2018 Q2 2018 Delta Liquids Production (Mbbls/d) 179 155 15% Total Production (MBOE/d) 378 338 12% Liquids Mix (%) 47% 46% 1% Realized Price, ex Hedge…
  11. December 2018 Corporate Presentation – Encana Corp – slide 11
    STRONG FINANCIAL PERFORMANCE Q3 Highlights • FCF? positive in Q3 – Generated $66MM of FCF? – Expect full year positive FCF? – Cash flow margin? of $16.93/BOE in Q3 and expect >$16/BOE for 2018 – Core assets each generating positive…
  12. December 2018 Corporate Presentation – Encana Corp – slide 12
    World Class PortfolioCore Encana\'s Resource in Context Core positions in four of North America’s premier basins • >23,000 total gross inventory locations* • ~11,000 gross premium return locations – >35% ATROR? returns – Oil or…
  13. December 2018 Corporate Presentation – Encana Corp – slide 13
    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 pay &…
  14. December 2018 Corporate Presentation – Encana Corp – slide 14
    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 higher •…
  15. December 2018 Corporate Presentation – Encana Corp – slide 15
    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 spacing,…
  16. December 2018 Corporate Presentation – Encana Corp – slide 16
    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 pads and…
  17. December 2018 Corporate Presentation – Encana Corp – slide 17
    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, micro-seismic,…
  18. December 2018 Corporate Presentation – Encana Corp – slide 18
    INNOVATION IN OPERATIONS 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…
  19. December 2018 Corporate Presentation – Encana Corp – slide 19
    CUBE DEVELOPMENT Maximizing Value Through Optimized Development • Spacing & stacking across multiple zones – Vertical and horizontal optimizations – System based approach considers how wells interact in the sub-surface over time •…
  20. December 2018 Corporate Presentation – Encana Corp – slide 20
    CUBE DEVELOPMENT Improved Resource Recovery & Efficiency • Higher recovery from stacked pay reservoirs – Generating effective draw down within cube • Highly efficient, agile development – Higher utilization of services &…
  21. December 2018 Corporate Presentation – Encana Corp – slide 21
    COMMERCIAL INNOVATION Delivering Value in any Environment • Fully offsetting service cost inflation with sourcing and efficiency improvements – Seamless linkage between supply chain and operations • Actively managing the supply…
  22. December 2018 Corporate Presentation – Encana Corp – slide 22
  23. December 2018 Corporate Presentation – Encana Corp – slide 23
    MARKET ACCESS & RISK MITIGATION Market Diversification Enhances Cash Flow • Market diversification leads to strong price realizations – Realized Permian oil price of $70.03/bbl was 101% of WTI in Q3 (Midland price $56.84/bbl) –…
  24. December 2018 Corporate Presentation – Encana Corp – slide 24
  25. December 2018 Corporate Presentation – Encana Corp – slide 25
    PERMIAN MIDSTREAM & MARKETING OVERVIEW Diversified Price Exposure • Dedicated oil gathering – > 90% of oil gathered on Medallion system – Provides better margins and flow assurance – In system storage with multiple sales points •…
  26. December 2018 Corporate Presentation – Encana Corp – slide 26
    MARKET DIVERSIFICATION PAYS Q3 Permian Price Uplift Delivers Value Q3 Permian Realized Oil Price (incl. Basis Hedge) WTI $69.50/bbl • Ensuring market access – Firm market access to Houston • Maximizing price realizations – Portion…
  27. December 2018 Corporate Presentation – Encana Corp – slide 27
    DIVERSIFIED MARKET EXPOSURE IN WESTERN CANADA Portfolio Approach to Price Risk Management ~0.5 Bcf/d AECO basis hedged at ($0.88/Mcf) to Henry Hub • ~0.5 Bcf/d firm transportation out of the basin • 100% firm capacity secured on…
  28. December 2018 Corporate Presentation – Encana Corp – slide 28
    BASIS RISK MANAGEMENT PROGRAM Market Access & Price Risk Management Western Canada – Realized price including hedge expected to be ~$0.20 below NYMEX in 2018 – AECO US$0.25 fluctuation equals less than US$5MM cash flow in 2018 after…
  29. December 2018 Corporate Presentation – Encana Corp – slide 29
    RISK MANAGEMENT Adds Greater Certainty to Cash Flow and De-Risks Capital Program • 2018 balance of year price sensitivity to a $5 increase to WTI is ~$5 million to cash flow • 2018 balance of year price sensitivity to a $0.25…
  30. December 2018 Corporate Presentation – Encana Corp – slide 30
  31. December 2018 Corporate Presentation – Encana Corp – slide 31
    ENCANA’S POTENTIAL PREMIUM RETURN INVENTORY Only Premium Inventory Consumed in Growth Plan Permian Basin Montney 12,000 gross well inventory* 3,450 premium…
  32. December 2018 Corporate Presentation – Encana Corp – slide 32
    PERMIAN 2018 Program FY 2018 Plan Acreage (net acres) 118,000 Average Working Interest (%) 94% Average Royalty Rate (%) 25% Development Capital (net) ($MM) $750-800 Gross Rig Count 4 - 5 HZ Wells Drilled (net) 100 – 115 HZ…
  33. December 2018 Corporate Presentation – Encana Corp – slide 33
    PERMIAN EXCEEDING TARGETS Cube Development Driving Efficient Execution • Permian delivering record production – Currently producing >100 MBOE/d – Cube development driving strong well performance – Exceeding targets of 30% annualized…
  34. December 2018 Corporate Presentation – Encana Corp – slide 34
    CUBE DEVELOPMENT ABOVE-GROUND BENEFITS Effective Water Management Martin County – Central Water Resource Hub • Improves capital efficiency and de-risks supply – 3 frac spreads per hub – Simple and effective catch basin design –…
  35. December 2018 Corporate Presentation – Encana Corp – slide 35
    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 limitations •…
  36. December 2018 Corporate Presentation – Encana Corp – slide 36
    PERMIAN RESERVOIR Massive Potential with Stacked Benches Zone Martin Midland/ Upton Glasscock Howard Clear Fork ? ? M. SPBY ? ? Jo Mill ? ? L. SPBY ? ? ? ? L. SPBY- 2nd ? ? ? ? WCMP A ? ? ? ? WCMP A- 2nd ? ? WCMP B ? ? ?…
  37. December 2018 Corporate Presentation – Encana Corp – slide 37
    PREMIUM INCREASE OUTPACING DRILLING Gross Premium Return Inventory County Midland/ Upton Martin Howard Glasscock IP30 (BOE/d) 985 950 825 800 IP180 (BOE/d) 700 650 600 550 EUR/Well (Mbbls) 610 675 550 530 EUR/Well (MBOE) 1,020…
  38. December 2018 Corporate Presentation – Encana Corp – slide 38
    MONTNEY 2018 Program FY 2018 Plan Acreage (net acres) 379,000 British Columbia 289,000 Alberta (Pipestone) 90,000 Working Interest (%) 63% (includes Pipestone) Average Royalty Rate (%) 5 – 10% Development Capital (net) $MM $400 –…
  39. December 2018 Corporate Presentation – Encana Corp – slide 39
    MONTNEY CONTINUES TO DELIVER LIQUIDS GROWTH Targeting Q4 Liquids Production of 55-65Mbbls/d • Montney liquids growth on track – Delivered >3x liquids production since Q1 2017 – Currently producing ~55Mbbls/d, on track to meet Q4…
  40. December 2018 Corporate Presentation – Encana Corp – slide 40
    MONTNEY OPTIONALITY Activity Focused on Richest Reservoir • Encana’s Montney acreage spans the maturity window from dry gas to volatile oil – Initial condensate gas ratios (CGRs) vary…
  41. December 2018 Corporate Presentation – Encana Corp – slide 41
    • Supports condensate-focused growth in Pipestone – Infrastructure supports Montney 5-year plan • Includes Pipestone Liquids Hub and Pipestone Processing Facility • Encana will design, construct and initially operate the facilities…
  42. December 2018 Corporate Presentation – Encana Corp – slide 42
  43. December 2018 Corporate Presentation – Encana Corp – slide 43
    MONTNEY INFRASTRUCTURE PLAN Liquids Handling Capacity Supports Growth & Flexibility *Condensate capacity includes field & plant condensate. Capacities are net ECA, and stated after shrink and before royalties. **Pipestone facilities…
  44. December 2018 Corporate Presentation – Encana Corp – slide 44
    ENCANA MONTNEY 5 Year Growth Profile • Development focused in condensate rich areas • 2018 program to fill new liquids capacity • Operating margin expected to increase >40% by 2022 • Liquids production of 55-65 Mbbls/d Q4 2018 •…
  45. December 2018 Corporate Presentation – Encana Corp – slide 45
    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 investment of C$1.45…
  46. December 2018 Corporate Presentation – Encana Corp – slide 46
    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…
  47. December 2018 Corporate Presentation – Encana Corp – slide 47
    EAGLE FORD & DUVERNAY Generating Significant Free Operating Cash Flow • Generated ~$215MM of combined free operating cash flow? YTD • Q3 Eagle Ford growth driven by strong Austin Chalk performance – Production up >15% Q3 vs Q2, expect…
  48. December 2018 Corporate Presentation – Encana Corp – slide 48
    EAGLE FORD 2018 Program FY 2018 Plan Acreage (net acres) 42,000 Average Working Interest (%) 92% Average Royalty Rate (%) 20 – 25% Development Capital (net) $MM $270 - 310 Gross Rig Count (average) 2 Wells Drilled (net) 45 – 50…
  49. December 2018 Corporate Presentation – Encana Corp – slide 49
  50. December 2018 Corporate Presentation – Encana Corp – slide 50
    EAGLE FORD Gross Premium Return Inventory • 220 premium return inventory locations • Testing additional opportunity in both the Graben area of the Eagle Ford and in the Austin Chalk Type Curve Eagle Ford Austin Chalk IP30 (BOE/d)…
  51. December 2018 Corporate Presentation – Encana Corp – slide 51
    DUVERNAY 2018 Program FY 2018 Plan Simonette Acreage (net acres) 91,000 Average Working Interest (%) 50% Average Royalty Rate (%) 5 – 10% Development Capital (net) $MM $100 – 130 Gross Rig Count (average) 1 Wells Drilled (net) 7 –…
  52. December 2018 Corporate Presentation – Encana Corp – slide 52
  53. December 2018 Corporate Presentation – Encana Corp – slide 53
    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 IP30 (BOE/d) 1,550 – 1,650 1,600 - 1,700 1,200 – 1,300…
  54. December 2018 Corporate Presentation – Encana Corp – slide 54
  55. December 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 • Interest on debt expected to be ~$70MM/quarter –…
  56. December 2018 Corporate Presentation – Encana Corp – slide 56
    PRODUCT VALUE CHAIN Projected Composition of Total Production Excluding Hedge *2018F based on company guidance as at November 1, 2018, excluding impact of hedges; production ranges are not additive; **Includes plant condensate Canada…
  57. December 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 Condensate Production Implied Condensate Imports…
  58. December 2018 Corporate Presentation – Encana Corp – slide 58
    DISCIPLINED FINANCIAL MANAGEMENT Access to Ample Liquidity Through 2022 • $4.0B fully committed, unsecured, revolving credit facilities – $4.0B available at September 30, 2018 – Committed to July 2022 – No use of credit facility to…
  59. December 2018 Corporate Presentation – Encana Corp – slide 59
    DISCIPLINED FINANCIAL MANAGEMENT Debt Portfolio as at September 30, 2018 • Total debt reduced by ~$3 billion since Y/E 2014 • Significant financial flexibility • ~75% of fixed rate long-term debt not due until 2030 and beyond •…
  60. December 2018 Corporate Presentation – Encana Corp – slide 60
    2018F ENCANA CORPORATE GUIDANCE US$, U.S. GAAP November 1, 2018 2018F Capital Investment ($ billions) Total Capital Investment 2.0 Production (after royalties) Liquids (Mbbls/d) 165 – 175 Natural Gas (MMcf/d) 1,150 – 1,250 Total…

From the store

Browse maps, data & reports in the Shale Experts store