By 2019, Encana expects Montney assets will produce 70,000 barrels per day of liquids
Encana says it continues to successfully advance its five-year plan which it expects will deliver industry-leading cash flow growth and returns, according to a press release.
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.
Encana 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. 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,” said Doug Suttles, Encana President & CEO.
Encana is managing Western Canadian natural gas price risk by focusing on high-margin, condensate-rich wells and has secured a combination of commercial arrangements that protect cash flow and returns, provide firm access to multiple markets and maintain flexibility.
These arrangements include physical access to four major North American gas markets, a strong financial basis hedge position and firm midstream and downstream transportation capacity for all of the company’s expected liquids and natural gas growth.
Continued leading returns with focus on condensate
By 2019, Encana expects its Montney asset will produce approximately 70,000 barrels per day (bbls/d) of 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.
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.