EXECUTING ON STRATEGY Encana Corporation Second Quarter 2014 Results July 24, 2014
Year To Date Highlights EXECUTING ON STRATEGY Portfolio Operational Balance Sheet Transition Excellence Strength Allocated 80% of YTD capital to YTD costs savings of 100 million Debt reduced by 1B with no growth plays from…
Focusing Our Business RAPID PORTFOLIO TRANSITION CONTINUES A&D activity has accelerated the strategy and sharpened our focus Replacing natural gas production with high-margin liquids Addition of Eagle Ford as 6th growth play 2.9…
Q2 In Review STRATEGY DELIVERING ON PLAN Q2 2013 Q2 2014 % Ch Upstream Operating Cash Flow (MM) Excluding Hedging 737 898 22 Including Hedging 788 800 2 Total Cash Flow (MM) 665 656 (1) - per share, diluted 0.90 0.89 (1) Operating…
Cash Flow & Cost Improvements KEY OPERATIONAL DRIVERS YTD 2014 Focus on operational excellence Base production continues to perform better than expected Expect to reduce 2014 base decline from 28-30% to 26% Increase in liquids…
Financial Strength UNPRECEDENTED LIQUIDITY & FLEXIBILITY 2014F capex + dividends aligned with cash flow Expect 500 million free cash flow* in 2014 Investment grade credit rating 2.7 billion of cash and cash equivalents as at June 30,…
Updated 2014 Guidance GENERATING FREE CASH FLOW IN 2014 2014F Total Cash Flow (B) 3.4 3.6 - per common share, diluted (/sh) 4.59 4.86 Capital Investment (B) 2.7 2.8 Natural Gas (MMcf/d) 2,400 2,500 Oil & Field Condensate (Mbbls/d) 49…
Revised 2014 Production Guidance Oil & NGL Volumes (Mbbls/d) Natural Gas Volumes (MMcf/d) 100 90 2,500 80 70 2,000 60 1,500 50 40 1,000 30 20 500 10 0 0 Guidance Divestitures Eagle Ford Other Guidance…
Operational Update Strong YTD operational performance across the portfolio Type curve performance meeting or exceeding expectations YTD 2014 netbacks up 84% (excluding hedges) compared to 2013 (43% including hedges) Lower drilling…
Eagle Ford July 2014 update Acquisition closed on June 20th with 2 rigs running 2014F capital of 300 320 million 2014F production of 22,000 boe/d (annualized) 85% liquids Development plan to maximize free cash flow* 200 - 250…
Montney July 2014 update Continued success with high intensity completions in Cutbank Ridge 7 high-intensity completions wells brought on in Q2 with 30 day IPs of 12-14 MMcf/d; 100% above prior type curve Higher than expected liquid…
DJ Basin July 2014 update YTD drilling cycle times averaging 3 days faster than expectations Drilled first 7-day spud-to-rig release 4,150 ft. well Successfully drilled 3rd 10,000 ft. lateral well Added second completions crew in…
San Juan July 2014 update Advancing efficient commercial development YTD production and capital are in line with expectations Continuing to further delineate acreage Consistent well performance at or above expectations 30 day IPs…
Duvernay July 2014 update Currently drilling on three 8-well pads in the Kaybob/Simonette area Completions commencing in Q3 10 high-intensity-completions wells meeting or exceeding type curve expectations 30 day IPs averaging 1,300…
Tuscaloosa Marine Shale July 2014 update Demonstrating achievement of type curve across Tier 1 acreage Wells drilled YTD 2014 generally meeting normalized type curve expectations Cost improvements continue to be achieved Mathis and…
Base Asset Optimization IMPROVING DECLINES, INCREASING RETURNS Focus across all fields on base optimization projects to offset PDP declines Haynesville re-frac program Excellent results from 2 wells completed to date IPs up to 100%…
Key 2014 Deliverables Disciplined and focused capital program Targeting 75% of 2014 capex allocated to growth assets Pre-hedge upstream operating cash flow expected to be up 70% year over year Accelerate high-margin growth plays…
Focused on Growing Value, not Volumes GROWTH ASSETS DELIVER HIGHER MARGINS THAN BASE IN 2014 GROWTH ASSET PRODUCTION 5.75/ PRODUCTION Mcfe 3.40/ Replacing lower margin production Mcfe with higher margin production from five…
Disciplined Focus on Profitable Growth VISION: Leading North American oil and gas resource play company High quality rocks Scale and running room Operational excellence Portfolio optionality STRATEGY: Disciplined focus on…
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