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1Q 2019 Earnings Presentation – Encana Corp

Encana Corp · Apr 30, 2019 · 36 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. 1Q 2019 Earnings Presentation – Encana Corp – slide 1
    Q1 2019 Conference Call April 30, 2019
  2. 1Q 2019 Earnings Presentation – Encana Corp – slide 2
    SUSTAINABLE BUSINESS MODEL 2 Focused Execution on 2019 Objectives Deliver the synergies identified in our Newfield acquisition o Target: 125 million in annualized G&A savings Annualized G&A reductions now estimated at 150 million o…
  3. 1Q 2019 Earnings Presentation – Encana Corp – slide 3
    SIGNIFICANT MOMENTUM 3 Strong Financial and Operational Performance Results and Guidance Q1 2019 Q1 2019 Expected Q2 Q4 Full Year Full Year Reportable Proforma (1) Run Rate Reportable Proforma CAPITAL INVESTMENT 736 913 500 800 2,500…
  4. 1Q 2019 Earnings Presentation – Encana Corp – slide 4
    THE ENCANA ADVANTAGE 4 Execution Rapidly Improving Anadarko Returns Self-sourced sand and chemicals Increased pad dimension Performance-driven improve reliability accommodates drive- project management at and lower costs through…
  5. 1Q 2019 Earnings Presentation – Encana Corp – slide 5
    SETTING NEW MILESTONES 5 Anadarko D&C Cost* Reductions YTD 2019 (MM/well) 8.5 Achieved targeted 1 MM/well cost reduction 7.90 0.40 8.0 in Q1 0.25 D&C Cost (MM) 7.5 o Achieved primarily from completions 0.20 0.15 7.0 6.90…
  6. 1Q 2019 Earnings Presentation – Encana Corp – slide 6
    REPEATABLE WELL PERFORMANCE 6 Anadarko Recent STACK Pad Completion 31 net STACK wells on-stream in Q1(1) o Wells continue to meet or exceed 1.3 MMBOE type curve o Includes 49 gross operated STACK wells at 63% liquids Q1…
  7. 1Q 2019 Earnings Presentation – Encana Corp – slide 7
    LEADING INDUSTRY 7 Permian Industry Leading Cycle Time* Days (Spud First Production) 33 net wells on-stream in Q1 o Consistent well performance across all counties Q1 production of 91 MBOE/d o 3.2 MBOE/d shut-in due to third…
  8. 1Q 2019 Earnings Presentation – Encana Corp – slide 8
    COMPETITIVE RETURNS 8 Montney 180 Continued Cycle Time Improvement Days (Spud First Production) 150 15 net wells on-stream in Q1 120 o On track for 70 80 net wells in 2019 90 Q1 production of 207 MBOE/d 60 o 4.3 MBOE/d…
  9. 1Q 2019 Earnings Presentation – Encana Corp – slide 9
    A PREMIER E&P 9 Our 2019 Focus YTD Accomplishments Upcoming Milestones Rapid integration of Newfield Exploration Further reductions in Anadarko well costs Achieved targeted well cost reduction of 1MM Demonstrate repeatable cube…
  10. 1Q 2019 Earnings Presentation – Encana Corp – slide 10
    T O D AY S E N C A N A C O R P O R AT I O N 10 A Premier E&P 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…
  11. 1Q 2019 Earnings Presentation – Encana Corp – slide 11
    APPENDIX
  12. 1Q 2019 Earnings Presentation – Encana Corp – slide 12
    FOCUSED ON EXECUTION 12 Strong Q1 Financial Results Strong execution on return of capital(1) to Q1 2019 shareholders o Buyback now 61% complete Millions Per Share Q1 share buyback of 55.9 MM shares with an additional repurchase of…
  13. 1Q 2019 Earnings Presentation – Encana Corp – slide 13
    CAPITAL DISCIPLINE 13 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*…
  14. 1Q 2019 Earnings Presentation – Encana Corp – slide 14
    MULTI-BASIN PORTFOLIO WITH SCALE 14 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…
  15. 1Q 2019 Earnings Presentation – Encana Corp – slide 15
    HIGH RETURNS 15 Deep Inventory of High Return Growth Assets Continued Liquids Growth* 2019F** Capital 2.7-2.9B 300 Montney Liquids Production (Mbbls/d) Anadarko 200 Permian Other 100 75% of 2019F** capital directed…
  16. 1Q 2019 Earnings Presentation – Encana Corp – slide 16
    MULTI-BASIN PORTFOLIO WITH SCALE 16 Creating Value Through Scale & Innovation Proven expertise in cube development o Concurrent, multi-stack development maximizes resource value and lowers well costs 25% Average D&C cost* reduction…
  17. 1Q 2019 Earnings Presentation – Encana Corp – slide 17
    FINANCIAL STRENGTH 17 Financial Flexibility Long-Term Debt (B) Commitment to maintaining a strong balance sheet 7.1 o Reduced long-term debt by nearly 3 billion from 2013 to 2018 o Reduced long-term commitments by 4.3 billion from…
  18. 1Q 2019 Earnings Presentation – Encana Corp – slide 18
    RETURN OF CAPITAL 18 Returning Capital to Shareholders Sold 13 billion of assets since 2018 2019F Planned Returns* 2019 Buyback* 2013 2.0 150 o 80% of production and proved reserves sold were natural gas Distributions to…
  19. 1Q 2019 Earnings Presentation – Encana Corp – slide 19
    PERMIAN 19 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…
  20. 1Q 2019 Earnings Presentation – Encana Corp – slide 20
    PERMIAN 20 Core Growth Asset 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…
  21. 1Q 2019 Earnings Presentation – Encana Corp – slide 21
    PERMIAN 21 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 Pipelines Midland connect to access to…
  22. 1Q 2019 Earnings Presentation – Encana Corp – slide 22
    ANADARKO 22 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…
  23. 1Q 2019 Earnings Presentation – Encana Corp – slide 23
    ANADARKO 23 Core Growth Asset 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…
  24. 1Q 2019 Earnings Presentation – Encana Corp – slide 24
    ANADARKO 24 Midstream And Marketing Overview Majority of oil production gathered via pipeline Cushing with direct access to Cushing markets Segregated WTI oil stream provides premium pricing at Cushing Firm NGL processing with…
  25. 1Q 2019 Earnings Presentation – Encana Corp – slide 25
    MONTNEY 25 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)…
  26. 1Q 2019 Earnings Presentation – Encana Corp – slide 26
    MONTNEY 26 Core Growth Asset 60 Growing Liquids** 50 Liquids (Mbbls/d) 40 30 Self-funded multi-year liquids growth 20 o More than tripled liquids production since 2015 o 275 net wells drilled since 2015 10 -…
  27. 1Q 2019 Earnings Presentation – Encana Corp – slide 27
    MONTNEY 27 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 0.50 below NYMEX in 2019 100% firm capacity on o AECO…
  28. 1Q 2019 Earnings Presentation – Encana Corp – slide 28
    OPTIMIZING FREE CASH FLOW 28 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) /…
  29. 1Q 2019 Earnings Presentation – Encana Corp – slide 29
    CORE GROWTH ASSETS 29 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…
  30. 1Q 2019 Earnings Presentation – Encana Corp – slide 30
    LEVERAGING SCALE 30 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…
  31. 1Q 2019 Earnings Presentation – Encana Corp – slide 31
    2019 GUIDANCE 31 Reconciliation of Full Year Guidance to Reportable 14.00 2019 Guidance: Reportable Versus Full Year 12.00 G&A Excl. LTI 2019 Reportable Impact of Newfield Full Year 10.00 and Restr. Costs Guidance Jan 1 - Feb 13,…
  32. 1Q 2019 Earnings Presentation – Encana Corp – slide 32
    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 32 Maximizing Margin Lower Total G&A2 600 2.50 G&A 30% lower on a per BOE1 basis o On track for 150 million in annualized G&A savings,…
  33. 1Q 2019 Earnings Presentation – Encana Corp – slide 33
    P R O J E C T E D C O M P O S I T I O N O F T OTA L P R O D U C T I O N 33 Product Value Chain Excluding Hedge Canada US 2019F (1) 2019F Pricing 2019F(1) 2019F Pricing (Mbbls/d) (% WTI) (Mbbls/d) (% WTI) Oil (2) 01 70% 175 180 98%…
  34. 1Q 2019 Earnings Presentation – Encana Corp – slide 34
    MIDSTREAM AND MARKETING 34 Hedging Summary BENCHMARK HEDGES 2019(2) Oil and Condensate WTI Oil WTI FIXED PRICE SWAP 35 Mbbls/d o 250 MM per 5.00/bbl increase in NYMEX WTI to 2019 SWAP PRICE (US/bbl) 60.31/bbl Q2-Q4 cash flow after…
  35. 1Q 2019 Earnings Presentation – Encana Corp – slide 35
    D E B T P O R T F O L I O A S AT M A R C H 3 1 , 2 0 1 9 35 Disciplined Financial Management Total debt reduced by 3 billion since Y/E 2013 to Y/E 2018 Significant financial flexibility Well-dispersed maturity profile Multi-basin…
  36. 1Q 2019 Earnings Presentation – Encana Corp – slide 36
    Contact Investor Relations: 403.645.3550 281.210.5110 investor.relationsencana.com

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