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Piceance is a resource play located in northwest Colorado. The basin is characterized by thick natural gas accumulations primarily in the Williams Fork formation. In addition to Williams Fork, Encana has begun exploration drilling in the Niobrara and Mancos formations, which are thick shales predominant throughout the basin.
At December 31, 2012, Encana controlled approximately 592,000 gross undeveloped acres (545,000 net acres). Encana has current processing capacity in Piceance of approximately 270 MMcf/d under commitments with remaining terms of up to 14 years.
In November 2012, Encana entered into a long-term joint venture agreement with a subsidiary of Nucor under which Nucor is to earn a 50 percent working interest in certain natural gas wells to be drilled over the next 20 years in Piceance. Nucor has agreed to pay its share of well costs plus a portion attributable to Encana’s interest. In addition, Encana has several existing joint venture arrangements to develop portions of the Piceance Basin.
In 2012, Encana drilled approximately 116 net wells, of which 110 were drilled primarily using third party funds. For the remaining term of the joint venture arrangements, it is expected that Encana will drill approximately 2,720 net wells which will be partially funded by third parties.
During 2012, the Company renegotiated certain gathering and processing agreements, which result in Encana receiving additional NGL volumes from the Company’s processed gas in the Piceance and Jonah areas.
|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.