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2019 Gudiance and 2018 Results – Encana Corp

Encana Corp · Feb 28, 2019 · 32 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. 2019 Gudiance and 2018 Results – Encana Corp – slide 1
    1 A Premier E&P Financial Strength 2019 Guidance & 2018 Return of Capital Results Conference Call FEBRUARY 28, 2019 Sustainable Free Cash Flow Capital Discipline High-Returns Multi-Basin Portfolio with Scale
  2. 2019 Gudiance and 2018 Results – Encana Corp – slide 2
    MULTI-BASIN PORTFOLIO WITH SCALE 2 Liquids-Focused, Multi-Basin Portfolio Strength Core positions in three of the top plays in North America 2.0 BBOE of proforma high quality proved reserves* o 2018 YE Reserve Life Index (RLI) of…
  3. 2019 Gudiance and 2018 Results – Encana Corp – slide 3
    MULTI-BASIN PORTFOLIO WITH SCALE 3 Creating Value Through Scale & Innovation Proven expertise in cube development o Concurrent, multi-stack development maximizes the resource value and lowers well costs 25% Average D&C cost*…
  4. 2019 Gudiance and 2018 Results – Encana Corp – slide 4
    HIGH RETURNS 4 Deep Inventory of High Return Growth Assets Core 3 Liquids Growth* 2019F** Capital 2.7-2.9B 300 Montney Liquids Production (Mbbls/d) Anadarko 200 Permian Other 100 75% of 2019F** capital directed to…
  5. 2019 Gudiance and 2018 Results – Encana Corp – slide 5
    CAPITAL DISCIPLINE 5 Disciplined Approach Priority 1 - Financial Strength Manage leverage at mid-cycle prices to 1.5x net debt to adjusted EBITDA Maintain strong liquidity Investment grade credit ratings Priority 2 Dividends*…
  6. 2019 Gudiance and 2018 Results – Encana Corp – slide 6
    SUSTAINABLE FREE CASH FLOW 6 Compelling Valuation Large/Mid-Cap E&P FCF Yield* 5.0% 8.0x Proven team with demonstrated Ent. Value / 2019F EBITDA 2.5% 6.0x capital discipline 2019 FCF Yield (%) 0.0% 4.0x Consistently…
  7. 2019 Gudiance and 2018 Results – Encana Corp – slide 7
    RETURN OF CAPITAL 7 Returning Capital to Shareholders 2018 2019F Planned Returns 2.0 Sold 13 billion of assets since 2013 o 80% of production and proved reserves sold were natural gas Distributions to Shareholders (B) Reshaped…
  8. 2019 Gudiance and 2018 Results – Encana Corp – slide 8
    FINANCIAL STRENGTH 8 Financial Flexibility Long-Term Debt (B) Commitment to maintaining a strong balance sheet 7.1 o Reduced long-term debt by nearly 3 billion since 2013 o Reduced long-term commitments by 4.3 billion since 2013…
  9. 2019 Gudiance and 2018 Results – Encana Corp – slide 9
    HITTING THE GROUND RUNNING 9 Rapid Integration Progression Anadarko Well Cost Savings 125 MM in annualized G&A synergies 1.00 o New organization structure implemented o Elimination of duplicative costs saves 25 MM (credit facility,…
  10. 2019 Gudiance and 2018 Results – Encana Corp – slide 10
    2019 OUTLOOK 10 Delivering on Encanas Priorities Our 2019 Plan 2018 Combined 2019 Full Year (1) ECA+NFX Buyback of 1.25B + 25% dividend increase o Drives per share accretion CAPITAL INVESTMENT ( BILLION) 3.5 2.7 2.9 Capital…
  11. 2019 Gudiance and 2018 Results – Encana Corp – slide 11
    CORE GROWTH ASSET 11 Anadarko Growing Production** Liquids growth and free cash flow generator o 134,800 BOE/d, 60% liquids in 2018 o 100% of core lands held by production Targeting 1 MM well cost reduction o Cube development…
  12. 2019 Gudiance and 2018 Results – Encana Corp – slide 12
    CORE GROWTH ASSET 12 Permian Cube development yields free cash flow and growth o Tripled liquids production since acquisition (Q4 2014) o 500 net wells drilled Basin innovator with peer leading performance ** o 20% reduction…
  13. 2019 Gudiance and 2018 Results – Encana Corp – slide 13
    CORE GROWTH ASSET 13 Montney 60 Growing Liquids** 50 Liquids (Mbbls/d) 40 Self-funded multi-year liquids growth o More than tripled liquids production since 2015 30 o 275 net wells drilled 20 10 Basin-leading cost and…
  14. 2019 Gudiance and 2018 Results – Encana Corp – slide 14
    T O D AY S E N C A N A C O R P O R AT I O N 14 A Premier E&P in 2019 A Premier E&P Financial Strength Investment grade profile Return of Capital 1.25 billion share buyback and 25% increase in annual dividend Sustainable Free…
  15. 2019 Gudiance and 2018 Results – Encana Corp – slide 15
    MULTI-BASIN PORTFOLIO WITH SCALE 16 Liquids-Focused, Multi-Basin Proved Reserves 2.0 BBOE of Proforma Proved Reserves* Total proforma proved reserves* increased 35% o Reserves additions** replaced FY18 production by 370% Permian…
  16. 2019 Gudiance and 2018 Results – Encana Corp – slide 16
    PERMIAN 17 2019 Program FY 2019 PLAN ACREAGE (net acres) / AVERAGE WORKING INTEREST % 115,000 / 92% 2019 AVERAGE WORKING INTEREST (%) 96% AVERAGE ROYALTY RATE (%) 25% CAPITAL (net) (MM) 925 975 NET WELLS DRILLED 105 120 NET…
  17. 2019 Gudiance and 2018 Results – Encana Corp – slide 17
    PERMIAN 18 Midstream And Marketing Overview Colorado City Majority of oil production gathered via pipeline with access to multiple physical markets Pipelines Midland connect to Firm gas gathering and NGL processing with Cushing…
  18. 2019 Gudiance and 2018 Results – Encana Corp – slide 18
    ANADARKO 19 2019 Program FY 2019 PLAN** ACREAGE (net acres) / AVERAGE WORKING INTEREST % 361,000 / 57% 2019 AVERAGE WORKING INTEREST (%) 70% AVERAGE ROYALTY RATE (%) 17 20% CAPITAL (net) (MM) 800 - 850 NET WELLS DRILLED 65…
  19. 2019 Gudiance and 2018 Results – Encana Corp – slide 19
    ANADARKO 20 Midstream And Marketing Overview Majority of oil production gathered via Cushing pipeline with direct access to Cushing markets Segregated WTI oil stream provides premium pricing at Cushing Firm NGL processing with…
  20. 2019 Gudiance and 2018 Results – Encana Corp – slide 20
    MONTNEY 21 2019 Program FY 2019 PLAN ACREAGE (net acres) / AVERAGE WORKING INTEREST % 793,000 / 64% - PIPESTONE ACREAGE / WI % 89,000 / 100% 2019 AVERAGE WORKING INTEREST (%) 72% AVERAGE ROYALTY RATE (%) 5 10% CAPITAL (net)…
  21. 2019 Gudiance and 2018 Results – Encana Corp – slide 21
    MONTNEY 22 Midstream And Marketing Overview Combination of firm export capacity and basis hedges to manage AECO gas price risk o Realized price including hedge expected to be 0.60 below NYMEX in 2019 100% firm capacity on o AECO…
  22. 2019 Gudiance and 2018 Results – Encana Corp – slide 22
    OPTIMIZING FREE CASH FLOW 23 Other Assets 125 Optimizing Free Cash Flow 100 75 MBOE/d 50 25 0 2018 2019F Duvernay Uinta Williston Eagle Ford FY 2019 PLAN EAGLE FORD WILLISTON DUVERNAY UINTA ACREAGE (net acres) /…
  23. 2019 Gudiance and 2018 Results – Encana Corp – slide 23
    CORE 3 24 Type Curves Play IP30 (BOE/d) IP180 (BOE/d) EUR/Well (Mbbls) EUR/Well (MBOE) GOR (scf/bbl) Permian Basin1 Midland/Upton 985 700 610 1,020 2,800 Martin 950 650 675 1,000 2,000 Howard 825 600 550 875 2,450 Glasscock…
  24. 2019 Gudiance and 2018 Results – Encana Corp – slide 24
    LEVERAGING SCALE 25 Cost Effective Water Management Permian Martin County Water Hub Area specific solutions o Permian Combination Encana-owned low-cost water hubs and third party providers Recycled 50% of produced water in…
  25. 2019 Gudiance and 2018 Results – Encana Corp – slide 25
    Q4 2018 HIGHLIGHTS 26 Strong Financial and Operational Performance Steady liquids growth o Annualized total company liquids growth of 30%, including 14 Mbbls/d growth from Q3 2018 (8% increase) Encana Q4 2018 Results o 13 MBOE/d…
  26. 2019 Gudiance and 2018 Results – Encana Corp – slide 26
    2018 RECAP 27 Met or Exceeded All 2018 Targets 2018 Results Guidance Actuals CAPITAL INVESTMENT ( MILLION) 2,000 1,975 Returned 306 MM of capital to shareholders through dividends and share TOTAL LIQUIDS (MBBLS/d) 165 175 168…
  27. 2019 Gudiance and 2018 Results – Encana Corp – slide 27
    2019 GUIDANCE 28 Reconciliation of Full Year Guidance to Reportable 14.00 2019 Guidance: Reportable Versus Full Year 12.00 2019 Reportable Impact of Newfield Full Year G&A Excl. LTI Guidance Jan 1 - Feb 13, 2019 Proforma 10.00…
  28. 2019 Gudiance and 2018 Results – Encana Corp – slide 28
    C O S T C O N T R O L O F C O R P O R AT E I T E M S E N H A N C E S P E R U N I T M A R G I N 29 Maximizing Margin G&A1 20% lower on a per BOE basis Lower Total G&A3 o On track for 125 million in annualized G&A savings 600 2.50…
  29. 2019 Gudiance and 2018 Results – Encana Corp – slide 29
    P R O J E C T E D C O M P O S I T I O N O F T O TA L P R O D U C T I O N 30 Product Value Chain Excluding Hedge Canada US 2019F* 2019F Pricing 2019F* 2019F Pricing (Mbbls/d) (% WTI) (Mbbls/d) (% WTI) Oil 01 70% 175 180 98%…
  30. 2019 Gudiance and 2018 Results – Encana Corp – slide 30
    MIDSTREAM AND MARKETING 31 Hedges Add Greater Certainty To Cash Flow BENCHMARK HEDGES 2019 FY(2) WTI Oil Oil and Condensate o 280 MM per 5.00/bbl change in WTI Oil to 2019 FY cash flow after hedge (1) WTI FIXED PRICE SWAP 35…
  31. 2019 Gudiance and 2018 Results – Encana Corp – slide 31
    D E BT P O R T F O L I O A S AT F E B R U A R Y 1 5 , 2 0 1 9 32 Disciplined Financial Management Total debt reduced by 3 billion since Y/E 2013 Significant financial flexibility Well dispersed maturity profile Investment grade…
  32. 2019 Gudiance and 2018 Results – Encana Corp – slide 32
    Contact Investor Relations: 403.645.3550 281.210.5110 investor.relationsencana.com

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