Encana’s new strategy focuses on profitable growth from five high return liquids rich and oil assets.
Cutbank Ridge is a resource play located in the Canadian Rocky Mountain foothills, southwest of Dawson Creek, British Columbia. Key producing horizons in Cutbank Ridge include the Montney, Cadomin and Doig formations. The Montney and Cadomin are almost exclusively being developed with horizontal well technology.
In 2012, Encana drilled approximately 41 net wells in the area. As of 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 extensively over the last several years and by applying advanced technology has reduced overall development costs significantly, achieving a nearly 70 percent reduction in costs on a completed interval basis since 2006.
In February of 2012, Encana entered into a partnership agreement with a subsidiary of Mitsubishi to jointly develop certain Cutbank Ridge lands in British Columbia. Under the agreement, Encana owns 60 percent and Mitsubishi owns 40 percent of the partnership. Mitsubishi agreed to invest approximately C$2.9 billion for its partnership interest, with C$1.45 billion received in February 2012. Mitsubishi has agreed to invest the remaining amount of approximately C$1.45 billion, in addition to its 40 percent of the partnership’s future capital investment, over an expected commitment period of five years, thereby reducing Encana’s capital funding commitment to 30 percent of the total expected capital investment over that period. The transaction did not include any of Encana’s existing Cutbank Ridge production, processing plants, gathering systems or Alberta landholdings at the time of the transaction.
|Natural Gas (MMcf/d)||Oil & NGLs (Mbbls/d)|
Prior to 2012 production was reported as MMcfe/d which included production for both natural gas as well as oil and natural gas liquids.
1Key resource play areas were realigned in 2011 with 2010 comparative information restated.