Encana’s third quarter results, announced November 3, 2016, set the company on track to deliver leading returns and quality growth over the next five years. Driven by an unrelenting focus on efficiency and innovation in every corner of the business, Encana increased margins and grew cash flow by almost 40 percent compared to the second quarter.
“We delivered strong financial results during the quarter which were driven by innovation and exceptional well performance coupled with continued capital and operating efficiencies,” said Doug Suttles, Encana President & CEO. “Our relentless focus on driving efficiency into every corner of the business is increasing our margins and delivering significant cash flow growth. Encana is now one of, if not the, lowest cost, highest performing operators in each of our core four assets.”
"Our relentless focus on driving efficiency into every corner of the business is increasing our margins and delivering significant cash flow growth." - Doug Suttles
During the quarter, the company further strengthened its balance sheet, lowering net debt by $2 billion. Since the end of 2014, during two of the most challenging years the industry has faced, Encana has halved its debt. In addition, Encana’s operating expense and transportation and processing costs are on track to be $150 million lower than originally guided.
Encana continued to build on its track record of operational excellence, delivering superior wells in its core four assets through precision targeting and optimized completion designs. Reflecting the quality of its multi-basin portfolio, Encana delivered leading well results in the Montney and Eagle Ford.
In the Pipestone area of the Montney, four wells delivered average 30-day initial production rates of 1,900 barrels of oil equivalent per day (BOE/d) including over 1,050 barrels per day (bbls/d) on condensate. In the Eagle Ford, two Austin Chalk wells delivered average 30-day initial production rates of 2,000 BOE/d to 3,100 BOE/d with oil comprising about 80 percent.
Since the end of 2014, during two of the most challenging years the industry has faced, Encana has halved its debt.
During the quarter, Encana set new drilling and completions pacesetter costs in the Permian and the Duvernay. Through the combination of ongoing improvements in capital efficiency coupled with strong operational performance, we expect to reduce production decline from our core fours assets from the fourth quarter of 2015 to the fourth quarter of 2016 to around four percent.
"Our core four assets include over 10,000 premium return well locations and form a multi-basin portfolio which gives Encana a powerful competitive advantage." - Doug Suttles
“We are entering a phase of generating significant value from the tremendous business we’ve created to deliver sector leading growth and returns,” added Suttles. “Our core four assets include over 10,000 premium return well locations and form a multi-basin portfolio which gives Encana a powerful competitive advantage. Our teams quickly refine and apply successful technical innovations across each of our core four assets and continue to capture sustainable efficiencies. We have the ability to rapidly respond to changing market conditions.”
The five-year plan shared at Encana’s Investor Day in October sets the company on course to deliver sector leading cash flow growth of 300 per cent, 60 per cent growth in total production and 100 per cent growth in production from its core four assets by the end of 2021.Legal Advisory