CALGARY, A.B. – Encana Corp. continues to successfully advance its five-year plan which it expects will deliver industry-leading cash flow growth and returns. The company’s Montney asset plays an integral part in this plan and will contribute significant high-value condensate, non-GAAP cash flow and margin growth. The company has made significant recent progress adding further value to this asset by improving capital efficiency, increasing returns and managing risk.
“Our world-class, condensate-rich Montney asset keeps getting better and we believe there is opportunity for significant upside to our five-year plan,” said Doug Suttles, Encana President & CEO. “We are making our Montney asset more valuable by operating efficiently at scale and continuously delivering leading well performance and cost efficiencies. We have secured access to infrastructure to support our growth plan and are actively managing price risk to maximize value from the Montney.”
By 2019, Encana expects its Montney asset will produce approximately 70,000 barrels per dayof liquids, of which the majority will be high-margin condensate. Throughout the growth period the plan is fully self-funding. Over the course of its five-year plan, at flat $55 WTI and $3 NYMEX prices, Encana expects its drilling program will generate non-GAAP operating margins of approximately $14.00 per barrel of oil equivalent (BOE).
Across Encana’s condensate-rich areas of the Montney, the company’s latest completion designs are delivering 60-day initial production rates of between 500 bbls/d to 1,200 bbls/d of condensate. Encana now has four wells in Pipestone which have each produced over 100,000 barrels of condensate in under 100 days.
Beginning in the fourth quarter of 2017 and continuing into 2018, new midstream infrastructure and downstream capacity is expected to unlock significant cash flow growth. In the Cutbank Ridge part of the play, two Veresen Midstream Limited Partnership facilities, Tower and Sunrise, remain ahead of schedule to be operational in the fourth quarter of 2017. A third facility, Saturn, is expected to be operational in early 2018. Encana has secured firm downstream transportation capacity for its expected gas and liquids growth, including service on the Nova Gas Transmission Ltd. system.
The company expects that its total net Montney production by 2019 will be over 70,000 bbls/d of liquids and 1.2 billion cubic feet per day (Bcf/d) of natural gas.
Significantly reduced AECO exposure
Within its Montney asset, the company is working to unlock additional growth opportunities in the Cutbank Ridge area beyond 2018 and evaluate further oil and condensate growth in Pipestone as well as the stacked pay potential of the Montney zone within the Duvernay.