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August 2019 Corporate Presentation – Encana Corp

Encana Corp · Aug 8, 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.

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  1. August 2019 Corporate Presentation – Encana Corp – slide 1
  2. August 2019 Corporate Presentation – Encana Corp – slide 2
    Key Highlights Demonstrate Profitable Business Net Earnings $336 MM $0.24 / SHARE FCF Yield #1 VS PEERS Buyback 149MM SHS. YTD ~10% OF O/S SHARES Cash Flow ? $877 MM $0.64 / SHARE Dividend +25% YTD Free Cash Flow ? $127…
  3. August 2019 Corporate Presentation – Encana Corp – slide 3
    127 MM of Free Cash Flow? Positioned to grow free cash flow in H2 $175 MM annualized G&A / op. cost synergies $50 MM greater than original estimate 2Q19 annualized leverage of 1.7x ?,(1) Represents normalized leverage post…
  4. August 2019 Corporate Presentation – Encana Corp – slide 4
    STRONG FINANCIAL RESULTS 2Q19 $ Millions $ Per Share NET EARNINGS 336 0.24 NON-GAAP OPERATING EARNINGS? 290 0.21 CASH FROM OPERATING ACTIVITIES 906 NON-GAAP CASH FLOW? 877 0.64 CASH FLOW MARGIN? $/BOE 16.27 CAPITAL INVESTMENT 750…
  5. August 2019 Corporate Presentation – Encana Corp – slide 5
    Results and Guidance 1Q19 2Q19 Expected 2H ‘19 Run Rate FY19 Reportable (Unchanged) FY19 Proforma (Unchanged) CAPITAL INVESTMENT ($ MILLION) 736 750 500 – 600 2,500 – 2,700 2,700 – 2,900 TOTAL LIQUIDS (1) (MBBLS/D) 229 320 310…
  6. August 2019 Corporate Presentation – Encana Corp – slide 6
    8% 4% 4% 4% 4% 3% 2% 1% (2%) (2%) (9%) ECA Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 15% 13% 12% 12% 11% 10% 8% 8% 4% (2%) (10%) Peer 1 Peer 2 ECA Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9…
  7. August 2019 Corporate Presentation – Encana Corp – slide 7
    Top North American Producer (1) Reportable oil & condensate production. (2) Peer data is reported 1Q19 net production from public filings. ECA reflects 2Q19 reportable production volumes. Peers include APA, APC, CLR, COG, CXO, DVN, EOG,…
  8. August 2019 Corporate Presentation – Encana Corp – slide 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. August 2019 Corporate Presentation – Encana Corp – slide 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. August 2019 Corporate Presentation – Encana Corp – slide 10
    STACK Cubes Posting Strong Results (1) Infill wells normalized to 10,000’ lateral length. MBOE Mbbls Pre ECA Cube Dev STACK 2019 TC BLAINE Infill Parent MERAMEC KINGFISHER First ECA Cube Style Completions (6 – 8 well spacing)…
  11. August 2019 Corporate Presentation – Encana Corp – slide 11
    Demonstrated Permian Basin Leader FY15 – FY18 >2.5x FY15 - Current ~32% CAGR Achieved at avg rig count of ~4.5 (1) (1) Average ECA operated hz rig count from FY15 through 1H19. ? Non-GAAP measures defined in advisories. For…
  12. August 2019 Corporate Presentation – Encana Corp – slide 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. August 2019 Corporate Presentation – Encana Corp – slide 13
    Montney (1) Normalized to 7,215’ lateral length. ? Non-GAAP measures defined in advisories. For additional information regarding non-GAAP measures see the Company’s website. • Generating free upstream operating cash flow? while…
  14. August 2019 Corporate Presentation – Encana Corp – slide 14
    Encana’s Sustainable Business Roadmap Liquids Growth Dividend Growth Balance Sheet Strength Multi-Basin Portfolio with Scale Capital Discipline Free Cash Flow
  15. August 2019 Corporate Presentation – Encana Corp – slide 15
  16. August 2019 Corporate Presentation – Encana Corp – slide 16
    Permian Anadarko Base & Montney Other Liquids-Focused, Multi-Basin Portfolio Strength M U L T I -BAS IN P O R T FOL I O W I T H S C A L E ASSET NET ACRES 2018 PRODUCTION LIQUIDS % CORE PERMIAN 115,000 92 MBOE/d 85% ANADARKO…
  17. August 2019 Corporate Presentation – Encana Corp – slide 17
    Deep Inventory of High Return Growth Assets >75% of 2019F** capital directed to core growth assets 20% less capital (2019F** vs 2018*) expected to generate growth and free cash flow? H I G H R E T U R N S Continued Liquids Growth*…
  18. August 2019 Corporate Presentation – Encana Corp – slide 18
    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 * Declaration and payment of future dividends subject to board…
  19. August 2019 Corporate Presentation – Encana Corp – slide 19
    Returning Capital to Shareholders • Sold ~$13 billion of assets since 2013 o >80% of production and proved reserves sold were natural gas o Reshaped portfolio to liquids while returning cash to shareholders • Strong liquidity and…
  20. August 2019 Corporate Presentation – Encana Corp – slide 20
    Optimized Development – Maximizing Value CUBE D E V ELOPMENT • Spacing & stacking across multiple zones • Vertical and horizontal optimizations • System based approach considers how wells interact in the sub-surface over time •…
  21. August 2019 Corporate Presentation – Encana Corp – slide 21
    Driving Cycle Time Improvements • Encana is a leader o Permian and Montney spud to…
  22. August 2019 Corporate Presentation – Encana Corp – slide 22
    2019 Program P E R M I AN • 75% activity focused on Midland, Martin and Upton counties • Continuing to innovate completion design and cube development * Includes plant and field condensate FY19 PLAN ACREAGE (net acres) / AVERAGE…
  23. August 2019 Corporate Presentation – Encana Corp – slide 23
    PERMIAN • Majority of oil production gathered via pipeline with access to multiple physical markets • Firm gas gathering and NGL processing with access to Waha and Mont Belvieumarkets • Waha basis $0.25 fluctuation equals less than…
  24. August 2019 Corporate Presentation – Encana Corp – slide 24
    ANADARKO 2019 Program • >90% program focused in Kingfisher, Blaine and Canadian Counties • Cube development expected to unlock significant synergies via reduced well costs and improved capital efficiency o $1 MM per well savings…
  25. August 2019 Corporate Presentation – Encana Corp – slide 25
    MONTNEY 2019 PROGRAM • Investment aligned with local market conditions • ~Balanced activity between Cutbank Ridge Partnership (60% partnership interest) and Pipestone (100% working interest) • ~C$100 MM of remaining third party…
  26. August 2019 Corporate Presentation – Encana Corp – slide 26
    Midstream And Marketing Overview MONTNEY To US Northwest To Dawn To Chicago Condensate Imports 100% firm capacity on Nova Gas Transmission System (NGTL) Condensate sold into premium local market Natural Gas Pipeline…
  27. August 2019 Corporate Presentation – Encana Corp – slide 27
    base assets FY 2019 PLAN* EAGLE FORD WILLISTON DUVERNAY UINTA ACREAGE (net acres) / AVERAGE WORKING INTEREST (%) 42,000 / 96% 80,000 / 59% 264,000 / 51% 222,000 / 80% 2019 AVG WORKING INTEREST (%) 92% 70% 51% 70% AVERAGE ROYALTY RATE…
  28. August 2019 Corporate Presentation – Encana Corp – slide 28
    CORE ASSETS 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 800…
  29. August 2019 Corporate Presentation – Encana Corp – slide 29
    Reconciliation of Full Year Guidance to Reportable 2 0 1 9 G U I D ANCE Reportable: ECA plus Newfield post close February 13, 2019 Impact of Newfield Jan 1 – Feb 13, 2019: Newfield activity January 1, 2019 – February 13, 2019 Full…
  30. August 2019 Corporate Presentation – Encana Corp – slide 30
    MAXIMIZING MARGIN • G&A >30% lower on a per BOE1 basis o On track for $175 million in annualized G&A savings, increased by $50 million versus original estimate • Quarterly G&A run rate for remainder of year: ~$75 MM o Run-rate G&A…
  31. August 2019 Corporate Presentation – Encana Corp – slide 31
    Product Value Chain Excluding Hedge (1) 2019F based on company guidance as at February 28, 2019, excluding impact of hedges; production ranges are not additive; (2) US Oil production range excludes estimated partial year volumes for…
  32. August 2019 Corporate Presentation – Encana Corp – slide 32
    Consistent Returns from Market Diversification • In 2Q19, diversified market access generated $52 million in margin after transport costs, about $0.96/BOE • Year to date, about $119 million or $1.23/BOE Bar chart
  33. August 2019 Corporate Presentation – Encana Corp – slide 33
    Hedging Summary M I D S T R E A M AND MAR K E T I N G (1) Q3 – Q4 2019 sensitivity based on mid-point of guidance volumes (2) Risk management positions as at June 30, 2019 (3) Hedged volumes are converted to Mcf at a 1:1 ratio from…
  34. August 2019 Corporate Presentation – Encana Corp – slide 34

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