EXECUTING ON STRATEGY Encana Corporation Third Quarter 2014 Results November 12, 2014
Year To Date Highlights Executing On Strategy Portfolio Operational Balance Sheet Transition Excellence Strength Allocated 84% of YTD capital to YTD costs savings of 145 million Debt reduced by 1B with no growth plays from…
Increasing Liquids Volumes From Growth Assets Steady Growth, Higher Margins Oil & NGLs Production 80,000 Liquids production from Original 5 70,000 Growth assets up 70% Q3 2014 vs. Q3 2013 60,000 With the addition of the Eagle Ford,…
2014 Portfolio Transition Plan Accelerated by A&D Activity 12,000 20/BOE 55/BOE netback margin netback margin 10,000 Cash* Permian** Focused on Value vs. 3x Volumes 8,000 Jonah Margin East Texas Proceeds from 2014 asset sales plus…
Athlon Energy The Best of the Permian Transformative Acquisition in World Class Basin 7.1B acquisition of Athlon Energy Inc. 5.93B cash plus assumption of 1.15B of long-term debt Midland Basin pure play, headquartered in Fort Worth, TX…
Q3 in Review Delivering on the Plan Q3 2013 Q3 2014 % Ch Upstream Operating Cash Flow* (MM) Excluding Hedging 622 952 53 Including Hedging 794 982 24 Total Cash Flow (MM) 660 807 22 - per share, diluted 0.89 1.09 22 Operating Earnings…
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 25-27% Increase in liquids…
Financial Strength Flexibility Maintained 2014F capex + dividends aligned with cash flow Expect 500 million free cash flow* in 2014 Investment grade credit rating 7.0 billion of cash and cash equivalents as at September 30, 2014…
Updated 2014 Guidance Generating Free Cash Flow in 2014 2014F Total Cash Flow (B) 3.2 3.3 - per common share, diluted (/sh) 4.32 4.45 Capital Investment (B) 2.5 2.6 Natural Gas (MMcf/d) 2,300 2,400 Oil & Field Condensate (Mbbls/d)…
Revised 2014 Production Guidance Oil & NGLs 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 Permian* Guidance Guidance…
Strong YTD Operational Performance Impressive results across the portfolio Type curve performance meeting or exceeding expectations YTD 2014 netbacks up 79% (excluding hedges) compared to 2013 (41% including hedges) Lower drilling…
Base Asset Optimization Improving Base Declines, Increasing Returns Focus across all fields on base optimization and operating cost reduction projects Haynesville re-frac wells continue to perform better than expectations Water…
Montney November 2014 update Continued success with high intensity completions in Cutbank Ridge 8 high-intensity completions wells producing in Q3 with 30 day IPs of 12-14 MMcf/d; 100% above prior type curve Higher than expected…
Duvernay November 2014 update Continue to see significant improvements in drilling costs and cycle times vs. Q2 2014 Q3 drilling costs 17% lower than Q2 Drilled pacesetter 03/1-3-64-23 in 24.5 days for 3.6 million Continuing to…
Eagle Ford November 2014 update Land swap with EOG completed 140 operated future development wells preserved Encana now controls timing and location of future wells New wells brought on production exceeding type curve expectations…
Permian November 2014 update Acquisition expected to close on November 13th 2014F capital of 75 95 million 2014F production of 4,000 BOE/d (annualized) 85% liquids 4 horizontal rigs, 8 vertical rigs currently running Plan to…
DJ Basin November 2014 update YTD drilling cycle times averaging 3 days faster than expectations Section length laterals averaging under 10 days spud-to-rig release One and one half section laterals averaging 13 days spud-to-rig…
San Juan November 2014 update YTD production and capital are in line with expectations On pace to deliver 2014 production growth Continuing to further delineate acreage Reducing cycle times Consistent 10 day spud to rig release…
Tuscaloosa Marine Shale November 2014 update Significant drilling improvements since Q1 2014 Last 8 wells averaging 7,100 feet lateral length All recent ECA wells meeting normalized type curve expectations All 7 wells brought on…
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 60% year over year Accelerate high-margin growth plays…
Focused on Growing Value Growth Assets Deliver Superior Margin GROWTH ASSET PRODUCTION PRODUCTION 40.00 /BOE 8.00/ Replacing lower margin production BOE with higher margin production from Encanas growth assets BASE…
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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