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September 2019 Corporate Presentation – Encana Corp

Encana Corp · Sep 4, 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. September 2019 Corporate Presentation – Encana Corp – slide 1
  2. September 2019 Corporate Presentation – Encana Corp – slide 2
    What Defines Today’s E&P? Sustainable liquids growth from multi-basin assets Operational Deep inventory of short-cycle shale opportunities Ability to manage thru-cycle volatility Free cash flow generation and return of capital to…
  3. September 2019 Corporate Presentation – Encana Corp – slide 3
    What Differentiates ECA? Proven Resource Operator Innovation / Application of Tech Across Portfolio Demonstrated Operational Efficiency Leader Second largest North American driller (>360 net wells in FY19)1 Technical innovation…
  4. September 2019 Corporate Presentation – Encana Corp – slide 4
    Encana is the “New E&P” Sustainable Business Model Free cash flow today $127 MM in 2Q19; more in 2H 2019 Investment grade & strong capital structure 1.7x 2Q annualized leverage ratio Scale that matters Share buyback $1.25B (post…
  5. September 2019 Corporate Presentation – Encana Corp – slide 5
    Encana Maintains an Advantaged Capital Structure $4B Liquidity • Focusing on thru-cycle stability and performance • Emphasis on “New E&P” Balance Sheet o Free cash flow generation o Capital discipline o Balance Sheet strength •…
  6. September 2019 Corporate Presentation – Encana Corp – slide 6
    Multi-Basin Scale is Critical for Through Cycle Stability Sustainable Business Model Substantial operational scale ~600 MBOE/d in 2Q19 (~55% liquids) ~2 million net acres In top North American Basins 2.0 BBOE of Proved Reserves 55%…
  7. September 2019 Corporate Presentation – Encana Corp – slide 7
    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…
  8. September 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. September 2019 Corporate Presentation – Encana Corp – slide 9
    STACK Delivering Consistent Results at Lower Costs • 89 STACK Meramec wells on-stream YTD • Stages & slurry volumes pumped per day up 58% & 37%, respectively, over 1Q19 • Continuing to optimize completions to maximize value • Infill…
  10. September 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. September 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. September 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. September 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. September 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. September 2019 Corporate Presentation – Encana Corp – slide 15
  16. September 2019 Corporate Presentation – Encana Corp – slide 16
    Liquids-Focused, Multi-Basin Portfolio Strength MULT I - BAS I N P O R T F O L 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 361,000 135 MBOE/d 60% MONTNEY 793,000 191…
  17. September 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 2019F** Capital $2.7-2.9B
  18. September 2019 Corporate Presentation – Encana Corp – slide 18
    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,…
  19. September 2019 Corporate Presentation – Encana Corp – slide 19
    Disciplined Approach Priority #3 - Sustain Business Maintain cash flow? and liquids production in core areas Priority #2 – Dividends* Sustain current dividend Priority #1 - Financial Strength Manage leverage at mid-cycle prices to…
  20. September 2019 Corporate Presentation – Encana Corp – slide 20
    S T RON G F INA N C I A L R E SUL T S 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? $/BOE 16.27 CAPITAL…
  21. September 2019 Corporate Presentation – Encana Corp – slide 21
    Strong Financial and Operational Performance Results and Guidance 1Q19 2Q19 Expected 2H ‘19 Run Rate FY19 Reportable (Unchanged) FY19 Proforma (Unchanged) CAPITAL INVESTMENT ($ MILLION) 736 750 500 – 600 2,500 – 2,700 2,700 –…
  22. September 2019 Corporate Presentation – Encana Corp – slide 22
    Returning Capital to Shareholders RETURN O F C A P I TAL • 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 •…
  23. September 2019 Corporate Presentation – Encana Corp – slide 23
    C U B E D E V E LOPMENT • Spacing & stacking across multiple zones • Vertical and horizontal optimizations • System based approach considers how wells interact in the sub-surface over time • Parent-child well impacts minimized with…
  24. September 2019 Corporate Presentation – Encana Corp – slide 24
    Driving Cycle Time Improvements • Encana is a leader o Permian and Montney spud to…
  25. September 2019 Corporate Presentation – Encana Corp – slide 25
    P E RMIAN • 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 WORKING INTEREST %…
  26. September 2019 Corporate Presentation – Encana Corp – slide 26
    Midstream And Marketing Overview P E RMIAN • 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 Belvieu markets • Waha basis…
  27. September 2019 Corporate Presentation – Encana Corp – slide 27
    ANADA R KO • >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 original…
  28. September 2019 Corporate Presentation – Encana Corp – slide 28
    MONTNEY • 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 capital to be…
  29. September 2019 Corporate Presentation – Encana Corp – slide 29
    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 Condensate Pipeline (1) 3Q-4Q 2019…
  30. September 2019 Corporate Presentation – Encana Corp – slide 30
    O P T I M I Z I NG F R E E C A S H F LOW 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%…
  31. September 2019 Corporate Presentation – Encana Corp – slide 31
    COR E G ROWTH A S S E T S 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…
  32. September 2019 Corporate Presentation – Encana Corp – slide 32
    2 0 1 9 G U I DANCE 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 year proforma: Results of ECA + Newfield combined for…
  33. September 2019 Corporate Presentation – Encana Corp – slide 33
    Maximizing Margin CO S T CONT R O L O F CORPORAT E I TEMS ENHANCE S P E R U N I T MAR G I N • 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…
  34. September 2019 Corporate Presentation – Encana Corp – slide 34
    Product Value Chain Excluding Hedge P R O J E C T E D COM P O S I T I O N O F TOTAL PRODUCTION (1) 2019F based on company guidance as at February 28, 2019, excluding impact of hedges; production ranges are not additive; (2) US Oil…
  35. September 2019 Corporate Presentation – Encana Corp – slide 35
    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 charts
  36. September 2019 Corporate Presentation – Encana Corp – slide 36
    M I D S T R E A M A N D M A R 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 MMBtu ?…

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