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2Q 2019 Earnings Presentation – Encana Corp

Encana Corp · Jul 31, 2019 · 34 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. 2Q 2019 Earnings Presentation – Encana Corp – slide 1
    Investor Presentation July 31, 2019
  2. 2Q 2019 Earnings Presentation – Encana Corp – slide 2
    SECOND QUARTER 2 Key Highlights Demonstrate Profitable Business Net Earnings Cash Flow Free Cash Flow 336 MM 877 MM 127 MM 0.24 / SHARE 0.64 / SHARE SIGNIFICANTLY GROWING FCF IN 2H19 Buyback Dividend FCF Yield 149MM +25%…
  3. 2Q 2019 Earnings Presentation – Encana Corp – slide 3
    3 What You Need to Know Financial Operational 127 MM of Free Cash Flow On track to deliver production & capital guide Positioned to grow free cash flow in H2 15% FY19 YoY liquids growth from three core growth assets 175 MM…
  4. 2Q 2019 Earnings Presentation – Encana Corp – slide 4
    STRONG FINANCIAL RESULTS 4 2Q19 Consolidated Results 127 MM of Free Cash Flow 2Q19 o Outperforming original synergy targets & proving operational Millions Per Share performance NET EARNINGS 336 0.24 2Q19 annualized leverage of 1.7x…
  5. 2Q 2019 Earnings Presentation – Encana Corp – slide 5
    OPERATIONS ON TRACK 5 Strong Financial and Operational Performance Results and Guidance FY19 Expected 2H FY19 Proforma 1Q19 2Q19 Reportable 19 Run Rate (Unchanged) (Unchanged) CAPITAL INVESTMENT 736 750 500 600 2,500 2,700 2,700…
  6. 2Q 2019 Earnings Presentation – Encana Corp – slide 6
    SUSTAINABLE BUSINESS MODEL 6 Encana Demonstrating Financial Excellence 1 Top Tier FCF Yield & ROCE 2 1.6% Dividend Yield 2Q19 Free Cash Flow Yield ,(1) 3 Dividend +25% YTD 8% 4 1.25B Share Buyback 4% 4% 4% 4% 3% 2% 1%…
  7. 2Q 2019 Earnings Presentation – Encana Corp – slide 7
    7 Top North American Producer Multi-basin leader in unconventional development Liquids Production Mbbls/d (2) Peer 1 Amongst the largest E&P producers in North America Peer 2 ECA 324 (70% oil + condensate) Transitioned to a…
  8. 2Q 2019 Earnings Presentation – Encana Corp – slide 8
    8 Anadarko Consistent well results, lower costs, strong returns o STACK returns competitive with Permian and Montney o D&C well costs reduced to 6.5 MM, 1.4 MM below baseline Generating free upstream operating cash flow while…
  9. 2Q 2019 Earnings Presentation – Encana Corp – slide 9
    9 STACK Delivering Consistent Results at Lower Costs 89 STACK Meramec wells on-stream YTD o 48 net STACK wells on-stream in 2Q19 Stages & slurry volumes pumped per day up 58% & 37%, respectively, over 1Q19 Continuing to optimize…
  10. 2Q 2019 Earnings Presentation – Encana Corp – slide 10
    10 STACK Cubes Posting Strong Results Oil outperformance driving returns o 18 high intensity cube-style completions showing strong early results at 6 8 well spacing with similar job size at reduced cost Mbbls Additional 24…
  11. 2Q 2019 Earnings Presentation – Encana Corp – slide 11
    11 Demonstrated Permian Basin Leader Generating free upstream operating cash flow Permian Production (MBOE/d) & growing volumes Achieved at avg rig count of 4.5 (1) 38 net wells on-stream in 2Q19 FY15 FY18 FY15 - Current 32% CAGR…
  12. 2Q 2019 Earnings Presentation – Encana Corp – slide 12
    12 Permian HNC 248 Cube: 14-wells set record 17 Mbbls/d after 60 days o 1,400 BOE/d average rate per well after 90 days Continued growth expected in 2H19 o On track to meet full year 2019 expectations o Oil & condensate volumes…
  13. 2Q 2019 Earnings Presentation – Encana Corp – slide 13
    13 Montney Generating free upstream operating cash flow while growing liquids volumes 32 net wells on-stream in 2Q19 o Increased completions scope resulting in 25% TC outperformance 2Q19 production of 203 MBOE/d o Total…
  14. 2Q 2019 Earnings Presentation – Encana Corp – slide 14
    14 Encanas Sustainable Business Roadmap Free Cash Flow Capital Discipline Balance Sheet Strength Dividend Growth Multi-Basin Portfolio with Scale Profitable Business Compelling Valuation Liquids Growth
  15. 2Q 2019 Earnings Presentation – Encana Corp – slide 15
    Appendix
  16. 2Q 2019 Earnings Presentation – Encana Corp – slide 16
    MULTI-BASIN PORTFOLIO WITH SCALE 16 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 YE18 Reserve Life Index (RLI) of 10…
  17. 2Q 2019 Earnings Presentation – Encana Corp – slide 17
    HIGH RETURNS 17 Deep Inventory of High Return Growth Assets Continued Liquids Growth* 2019F** Capital 2.7-2.9B 75% of 2019F** capital directed to core growth assets 20% less capital (2019F** vs 2018*) expected to generate growth…
  18. 2Q 2019 Earnings Presentation – Encana Corp – slide 18
    CAPITAL DISCIPLINE 18 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*…
  19. 2Q 2019 Earnings Presentation – Encana Corp – slide 19
    RETURN OF CAPITAL 19 Returning Capital to Shareholders 2018 2019F Planned Returns* Sold 13 billion of assets since 2013 2.0 o 80% of production and proved reserves sold were natural gas Distributions to Shareholders (B) o…
  20. 2Q 2019 Earnings Presentation – Encana Corp – slide 20
    CUBE DEVELOPMENT 20 Optimized Development Maximizing Value Spacing & stacking across multiple zones Cube Development Maximizes NPV Vertical and horizontal optimizations System based approach considers how wells interact in the…
  21. 2Q 2019 Earnings Presentation – Encana Corp – slide 21
    LEADING CYCLE TIME PERFORMANCE DRIVES FREE CASH FLOW 21 Driving Cycle Time Improvements Encana is a leader o Permian and Montney spud to…
  22. 2Q 2019 Earnings Presentation – Encana Corp – slide 22
    PERMIAN 22 2019 Program FY19 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…
  23. 2Q 2019 Earnings Presentation – Encana Corp – slide 23
    PERMIAN 23 Midstream And Marketing Overview Majority of oil production gathered via pipeline Colorado with access to multiple physical markets City Firm gas gathering and NGL processing with access to Waha and Mont Belvieu markets…
  24. 2Q 2019 Earnings Presentation – Encana Corp – slide 24
    ANADARKO 24 2019 Program FY19 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 75…
  25. 2Q 2019 Earnings Presentation – Encana Corp – slide 25
    MONTNEY 25 2019 Program FY19 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) (MM)…
  26. 2Q 2019 Earnings Presentation – Encana Corp – slide 26
    MONTNEY 26 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 0.30 below NYMEX in 2019 100% firm capacity on o AECO…
  27. 2Q 2019 Earnings Presentation – Encana Corp – slide 27
    OPTIMIZING FREE CASH FLOW 27 Base 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) /…
  28. 2Q 2019 Earnings Presentation – Encana Corp – slide 28
    CORE GROWTH ASSETS 28 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…
  29. 2Q 2019 Earnings 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 G&A Excl. LTI 2019 Reportable Impact of Newfield FY19 10.00 and Restr. Costs Guidance Jan 1 - Feb 13, 2019…
  30. 2Q 2019 Earnings Presentation – Encana Corp – slide 30
    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 30 Maximizing Margin Lower Total G&A2 600 2.50 G&A 30% lower on a per BOE1 basis o On track for 175 million in annualized G&A savings,…
  31. 2Q 2019 Earnings Presentation – Encana Corp – slide 31
    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 31 Product Value Chain Excluding Hedge Canada US 2019F (1) 2019F Pricing 2019F(1) 2019F Pricing (Mbbls/d) (% WTI) (Mbbls/d) (% WTI) Oil (2) 01 74% 170 175 99%…
  32. 2Q 2019 Earnings Presentation – Encana Corp – slide 32
    32 Consistent Returns from Market Diversification Q2 NYMEX Gas 2.64/MMBtu Q2 WTI Oil 59.82/bbl In 2Q19, diversified market access generated 52 million in margin after transport costs, about 0.96/BOE Year to date, about 119…
  33. 2Q 2019 Earnings Presentation – Encana Corp – slide 33
    MIDSTREAM AND MARKETING 33 Hedging Summary BENCHMARK HEDGES 2019(2) 2020(2) Oil and Condensate WTI Oil WTI FIXED PRICE SWAP 35 Mbbls/d 20 Mbbls/d o 175 MM per 5.00/bbl increase in NYMEX WTI to 2019 SWAP PRICE (US/bbl) 60.31/bbl…
  34. 2Q 2019 Earnings Presentation – Encana Corp – slide 34
    Contact Investor Relations: 403.645.3550 281.210.5110 investor.relationsencana.com

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