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March 2019 Corporate Presentation – Encana Corp

Encana Corp · Mar 28, 2019 · 33 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. March 2019 Corporate Presentation – Encana Corp – slide 1
    Corporate Presentation March 2019
  2. March 2019 Corporate Presentation – 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. March 2019 Corporate Presentation – Encana Corp – slide 3
    A PREMIER E&P 3 Our 2019 Checklist Completed Realized 40% of First ECA cube in acquisition of NFX 1 MM/well from Anadarko Anadarko D&C cost Achieve full 1 MM+ per well cost reduction in Anadarko Jan Feb Mar Apr May Jun 2H…
  4. March 2019 Corporate Presentation – Encana Corp – slide 4
    MULTI-BASIN PORTFOLIO WITH SCALE 4 Creating Value Through Scale & Innovation Proven expertise in cube development Average D&C cost* o Concurrent, multi-stack development maximizes the resource value and lowers well costs o Higher…
  5. March 2019 Corporate Presentation – Encana Corp – slide 5
    HIGH RETURNS 5 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…
  6. March 2019 Corporate Presentation – Encana Corp – slide 6
    CAPITAL DISCIPLINE 6 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*…
  7. March 2019 Corporate Presentation – Encana Corp – slide 7
    SUSTAINABLE FREE CASH FLOW 7 Compelling Valuation Large/Mid-Cap E&P FCF Yield* 5.0% 8.0x Proven team with demonstrated capital discipline Ent. Value / 2019F EBITDA 2.5% 6.0x 2019 FCF Yield (%) 0.0% 4.0x Consistently…
  8. March 2019 Corporate Presentation – Encana Corp – slide 8
    RETURN OF CAPITAL 8 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)…
  9. March 2019 Corporate Presentation – Encana Corp – slide 9
    FINANCIAL STRENGTH 9 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…
  10. March 2019 Corporate Presentation – Encana Corp – slide 10
    HITTING THE GROUND RUNNING 10 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…
  11. March 2019 Corporate Presentation – Encana Corp – slide 11
    2019 OUTLOOK 11 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…
  12. March 2019 Corporate Presentation – Encana Corp – slide 12
    CORE GROWTH ASSET 12 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…
  13. March 2019 Corporate Presentation – Encana Corp – slide 13
    CORE GROWTH ASSET 13 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 in D&C…
  14. March 2019 Corporate Presentation – Encana Corp – slide 14
    CORE GROWTH ASSET 14 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…
  15. March 2019 Corporate Presentation – Encana Corp – slide 15
    TODAYS ENCANA CORPORATION 15 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 Cash Flow Unique…
  16. March 2019 Corporate Presentation – Encana Corp – slide 16
    Appendix
  17. March 2019 Corporate Presentation – Encana Corp – slide 17
    MULTI-BASIN PORTFOLIO WITH SCALE 17 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…
  18. March 2019 Corporate Presentation – Encana Corp – slide 18
    PERMIAN 18 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…
  19. March 2019 Corporate Presentation – Encana Corp – slide 19
    PERMIAN 19 Midstream And Marketing Overview Colorado City Majority of oil production gathered via pipeline with access to multiple physical markets Firm gas gathering and NGL processing with access to Pipelines Midland connect…
  20. March 2019 Corporate Presentation – Encana Corp – slide 20
    ANADARKO 20 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…
  21. March 2019 Corporate Presentation – Encana Corp – slide 21
    ANADARKO 21 Midstream And Marketing Overview Majority of oil production gathered via pipeline with direct Cushing access to Cushing markets Segregated WTI oil stream provides premium pricing at Cushing Firm NGL processing with…
  22. March 2019 Corporate Presentation – Encana Corp – slide 22
    MONTNEY 22 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)…
  23. March 2019 Corporate Presentation – Encana Corp – slide 23
    MONTNEY 23 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 o AECO US0.25…
  24. March 2019 Corporate Presentation – Encana Corp – slide 24
    OPTIMIZING FREE CASH FLOW 24 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) /…
  25. March 2019 Corporate Presentation – Encana Corp – slide 25
    CORE 3 25 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…
  26. March 2019 Corporate Presentation – Encana Corp – slide 26
    LEVERAGING SCALE 26 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 2018…
  27. March 2019 Corporate Presentation – Encana Corp – slide 27
    Q4 2018 HIGHLIGHTS 27 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…
  28. March 2019 Corporate Presentation – Encana Corp – slide 28
    2018 RECAP 28 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 buybacks TOTAL LIQUIDS (MBBLS/d) 165 175…
  29. March 2019 Corporate Presentation – Encana Corp – slide 29
    2019 GUIDANCE 29 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…
  30. March 2019 Corporate Presentation – Encana Corp – slide 30
    COST CONTROL OF CORPORATE ITEMS ENHANCES PER UNIT MARGIN 30 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 Combined run-rate G&A costs of about 65…
  31. March 2019 Corporate Presentation – Encana Corp – slide 31
    PROJECTED COMPOSITION OF TOTAL PRODUCTION 31 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% Condensate** 40 43 89% 9 11 80% Butane…
  32. March 2019 Corporate Presentation – Encana Corp – slide 32
    MIDSTREAM AND MARKETING 32 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…
  33. March 2019 Corporate Presentation – Encana Corp – slide 33
    DE BT POR TFOLIO AS AT FE BRUARY 15, 2019 33 Disciplined Financial Management Total debt reduced by 3 billion since Y/E 2013 Significant financial flexibility Well dispersed maturity profile Investment grade credit rating 4.0B…

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