Profile: Encana Corporation (ECA.N)
26 Dec 2014
Encana Corporation (Encana), incorporated on January 1, 2006, is a North American energy producer. The Company’s other operations include the transportation and marketing of natural gas, oil and natural gas liquids (NGLs). All of Encana’s reserves and production are located in North America. The Company operates in two divisions: Canadian Division and USA Division. The Canadian Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within Canada. USA Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within the United States. During the year ended December 31, 2012, the Company acquired certain exploration and evaluation lands and properties. On February 9, 2012, it sold two natural gas processing plants in the Cutbank Ridge area of British Columbia. In May 2014, Jonah Energy LLC acquired Jonah field operations located in Sublette County, Wyoming, from Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corporation.
Canadian Division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within Canada. The resource plays are located in the Division: Cutbank Ridge in northern British Columbia; Bighorn in west central Alberta; Peace River Arch in northwest Alberta; Clearwater in southern Alberta, including the emerging Clearwater Oil play; and Greater Sierra in northeast British Columbia. Emerging plays within the Division also include the Duvernay in west central Alberta. As well, the Deep Panuke natural gas project offshore Nova Scotia is included in the Division.
In 2012, Encana drilled approximately 41 net wells in the area and production averaged approximately 433 millions of cubic feet per day (MMcf/d) of natural gas and approximately 1.5 thousand barrels per day (Mbbls/d) of oil and NGLs.
Cutbank Ridge is a resource play located in the Canadian Rocky Mountain foothills, southwest of Dawson Creek, British Columbia. At December 31, 2012, Encana controlled approximately 467,000 gross undeveloped acres (240,000 net acres) covering the deep basin Montney formation in British Columbia, with approximately 85,000 net acres located within Encana’s core development area near Dawson Creek. Encana has tested Montney over the last several years and by applying advanced technology has reduced overall development costs significantly, achieving a nearly 70 % reduction in costs on a completed interval basis since 2006.
Bighorn is a resource play in west central Alberta. The primary properties in Bighorn are Resthaven, Kakwa, Redrock and Berland. In 2012, Encana drilled approximately 31 net wells in the area and production averaged approximately 242 thousand barrels per day of natural gas and approximately 5.8 thousand barrels per day of oil and NGLs. At December 31, 2012, Encana controlled approximately 307,000 gross acres (266,000 net acres) in the resource play.
Peace River Arch
Peace River Arch is a resource play located in northwest Alberta. The focus is on the continued development of the Montney formation in Alberta. In 2012, Encana drilled approximately 26 net wells in the area and production after royalties averaged approximately 108 thousand barrels per day of natural gas and approximately 2.9 thousand barrels per day of oil and NGLs. At December 31, 2012, Encana controlled approximately 254,000 gross undeveloped acres (236,000 net acres) in the Montney formation.
Encana holds a 60% ownership interest in the Sexsmith plant, which has a total capacity of approximately 115 thousand barrels per day (net 69 thousand barrels per day to Encana). In October 2012, Encana sold compression and gathering lines in the Sexsmith and Pipestone areas to an unrelated third party.
In October 2012, the Gordondale sour gas deep cut plant came on stream. Encana has current processing capacity of approximately 50 thousand barrels per day at Gordondale under a ten year commitment. The deep cut facility is expected to yield net liquids production of approximately 1.7 thousand barrels per day after royalties.
Clearwater is a resource play that extends from the United States border to central Alberta and includes Clearwater Natural Gas and Clearwater Oil. Clearwater Natural Gas is focused on the development of Horseshoe Canyon coals, shallower sands and deeper targets using an integrated wellbore strategy. The Clearwater Oil emerging play is in the testing and development stage for multiple oil horizons.
In 2012, Encana drilled approximately 231 net natural gas wells and 29 net oil wells. Production after royalties averaged approximately 374 thousand barrels per day of natural gas and approximately 8.6 thousand barrels per day of oil and NGLs. At December 31, 2012, Encana controlled approximately 1.7 million gross undeveloped acres (1.5 million net acres) in the resource play. Approximately 80% of the total net acreage landholdings are owned in fee title.
Greater Sierra is a resource play located in northeast British Columbia. The focus is on the continued development of the Jean Marie formation and the Devonian aged Horn River shales. In 2012, Encana drilled approximately six net wells in the area and production after royalties averaged approximately 200 thousand barrels per day of natural gas and approximately 0.5 thousand barrels per day of oil and NGLs.
At December 31, 2012, Encana controlled 818,000 gross undeveloped acres (728,000 net acres) in the Jean Marie formation and approximately 259,000 gross undeveloped acres (222,000 net acres) in the Horn River Basin. Horn River Basin shales (Muskwa, Otter Park and Evie) within Encana’s focus area are upwards of 500 feet thick. At December 31, 2012, these shales have been evaluated with approximately 125 gross wells (14 vertical and 111 horizontal), 87 of which have been placed on long-term production (one vertical and 86 horizontal). Encana has owned gas processing capacity of approximately 625 MMcf/d at various facilities in the area.
In October 2012, the commissioning and expansion of the Cabin natural gas processing plant in British Columbia was suspended. In 2012, Encana had processing commitments related to two planned phases of the Cabin plant.
Encana is the owner and operator of the Deep Panuke gas field, located offshore Nova Scotia. The Deep Panuke natural gas project involves the installation of the facilities required to produce natural gas from the field, located approximately 250 kilometres southeast of Halifax (on the Scotian shelf). Produced gas will be transported to shore by subsea pipeline and Encana will transport this natural gas via the Maritimes & Northeast Pipeline to a delivery point in eastern Canada.
At December 31, 2012, Encana held an interest in approximately 76,000 gross acres (32,000 net acres) in Atlantic Canada, which includes Nova Scotia and Newfoundland and Labrador. Encana operates six of its nine licenses in these areas and has an average working interest of approximately 42%.
This division includes the exploration for, development of, and production of natural gas, oil and NGLs and other related activities within the United States. The resource plays are located in the Division: Piceance in northwest Colorado; Jonah in southwest Wyoming; Haynesville in Louisiana; and Texas. Other and emerging plays within the Division include the Tuscaloosa Marine Shale in Louisiana and Mississippi, Eaglebine in east Texas, the Mississippian Lime in Oklahoma and Kansas, the DJ Niobrara in northern Colorado and the San Juan Basin in New Mexico.
In 2012, Production after royalties averaged approximately 1,622 thousand barrels per day of natural gas and approximately 11.6 thousand barrels per day of oil and NGLs. At December 31, 2012, the USA Division had an established land position of approximately 3.4 million gross acres (2.9 million net acres), including approximately 2.7 million gross undeveloped acres (2.3 million net acres).
Suite 4400, 500 Centre Street SE
PO Box 2850
CALGARY AB T2P 2S5
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