Encana reduces Eagle Ford, Permian drilling and completion costs up to 44%

Encana on track to deliver $550 million in year-over-year cost savings

Encana

Doug Suttles, Encana CEO.

During the first quarter, Encana Corp. says its internal analysis and independent third-party research indicates the company is delivering well performance among the top of its peer groups in its core four assets.

But Encana also reported a bigger-than-expected quarterly loss, citing low oil and gas prices. Production fell by 11 per cent in Q1 as reduced drilling resulted in declining output from US shale plays.

The company reduced its average Permian and Eagle Ford drilling and completion costs by 24 and 44 per cent respectively, compared to its 2015 average and has already exceeded its 2016 cost reduction targets.

“The quality of our core four assets, combined with increased capital efficiency and operational innovation, are delivering basin-leading performance, enhancing our competitiveness and contributing to cash flow,” said Doug Suttles, Encana President and CEO.

In the Duvernay, Encana reduced its average drilling and completion costs by 35 per cent compared to its 2015 average and the company has around 65 per cent of the play’s top 40 performing wells, based on 180-day initial production rates.

Encana

Crownquest Operating LLC uses EndurAlloy™ production tubing to cut Permian Basin well operating costs

 

“Our teams are drilling some of the fastest, highest performing and lowest cost wells in our core four assets and we continue to find greater efficiency in every part of the business. We are on track to deliver $550 million of year-over-year cost savings,” said Suttles.

Encana continues to unlock the condensate potential in the Montney, with recent Pipestone wells significantly exceeding liquids expectations.

Recent condensate-rich wells in Dawson South and Tower are outperforming type curves. The company lowered its average Montney drilling and completion costs by 22 percent compared to the 2015 average and has already exceeded its 2016 cost reduction target.

Q1 highlights:

  • company on track to meet or beat 2016 guidance announced in Feb.
  • total production of 383,400 BOE/d
  • core four assets contributed 269,100 BOE/d, or 70 per cent of total production
  • reduced drilling and completions costs in core four assets by between 22 and 44 per cent compared to 2015 average
  • reduced general administrative costs by over 20 percent compared to the previous quarter, excluding restructuring and long-term incentive costs
  • on track to deliver $550 million in year-over-year cost savings
  • launched and completed successful tender offers to retire $489 million of senior notes

Well-automation-operatorWell automation reduces costs, boosts production for Permian Basin operators. Systems start at $3,000 fully installed by Production Lift Technologies of Midland, Texas.

Posted in: Energy Financial

1 Comment on "Encana reduces Eagle Ford, Permian drilling and completion costs up to 44%"

Trackback | Comments RSS Feed

Post a Comment