2011. In this annual information form - Encana

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Former Operations Former operations include the Canadian upstream assets and the U.S. downstream refining assets that were transferred to Cenovus as part of the Split Transaction on November 30, 2009. The Canadian upstream assets transferred to Cenovus included established natural gas development and production activities in southern Alberta and southern Saskatchewan, oil development and production activities in Alberta and Saskatchewan as well as exploration for, and development and production of bitumen using enhanced oil recovery methods in Alberta. The five key resource plays included in these assets were: (i) Shallow Gas in southeast Alberta and Saskatchewan; (ii) Pelican Lake in northeast Alberta; (iii) Weyburn in Saskatchewan; (iv) Foster Creek in northeast Alberta; and (v) Christina Lake in northeast Alberta. The Foster Creek and Christina Lake enhanced oil recovery projects were part of an integrated oil business with ConocoPhillips. During 2009 and prior to the Split Transaction, Encana drilled approximately 639 net wells on the Canadian upstream properties transferred to Cenovus. Natural gas production after royalties was approximately 762 MMcf/d and oil and NGL production after royalties was approximately 99.9 Mbbls/d. The U.S. downstream refining assets transferred to Cenovus focused on the refining of oil into petroleum and chemical products at the Borger refinery located in Borger, Texas and the Wood River refinery located in Roxana, Illinois. The refineries were part of an integrated oil business with ConocoPhillips. The refineries were 50 percent owned by Encana and operated by ConocoPhillips. In 2009, under previous GAAP, the Canadian upstream assets transferred to Cenovus were reported as continuing operations under full cost accounting, while the U.S. downstream refining results were reported as discontinued operations. Encana Corporation 17 Annual Information Form (prepared in US$)
Reserves and Other Oil and Gas Information Encana is required to provide reserves data prepared in accordance with Canadian securities regulatory requirements, specifically National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities (“NI 51- 101”). Certain reserves and oil and gas information in accordance with Canadian disclosure requirements are contained in Appendix A – Canadian Protocol Disclosure of Reserves Data and Other Oil and Gas Information. Additional disclosure required by NI 51-101 is included in the preceding sections of this annual information form, and referenced accordingly herein. Select supplemental reserves and other oil and gas information disclosure is provided in accordance with U.S. disclosure requirements in Appendix D – U.S. Protocol Disclosure of Reserves Data and Other Oil and Gas Information. See “Note Regarding Reserves Data and Other Oil and Gas Information”. The practice of preparing production and reserve quantities data under Canadian disclosure requirements (NI 51- 101) differs from the U.S. reporting requirements. The primary differences between the two reporting requirements include: the Canadian standards require disclosure of proved and probable reserves, while the U.S. standards require disclosure of only proved reserves; the Canadian standards require the use of forecast prices in the estimation of reserves, while the U.S. standards require the use of 12-month average prices which are held constant; the Canadian standards require disclosure of reserves on a gross (before royalties) and net (after royalties) basis, while the U.S standards require disclosure on a net (after royalties) basis; the Canadian standards require disclosure of production on a gross (before royalties) basis, while the U.S. standards require disclosure on a net (after royalties) basis; and the Canadian standards require that reserves and other data be reported on a more granular product type basis than required by the U.S. standards. Since its formation in 2002, Encana has retained independent qualified reserves evaluators (“IQREs”) to evaluate and prepare reports on 100 percent of Encana’s natural gas, oil and NGL reserves annually. In 2011, Encana’s Canadian reserves were evaluated by McDaniel & Associates Consultants Ltd. and GLJ Petroleum Consultants Ltd., and its U.S. reserves were evaluated by Netherland, Sewell & Associates, Inc. and DeGolyer and MacNaughton. Encana’s Vice-President, Corporate Reserves & Competitor Analysis and six other staff under this individual’s direction oversee the preparation of the reserves estimates by the IQREs. Currently this internal staff of four professional engineers, an engineering technologist and two business analysts have combined relevant experience of over 100 years. The Vice-President and other engineering staff are all members of the appropriate provincial or state professional associations and are members of various industry associations such as the Society of Petroleum Engineers and the Society of Petroleum Evaluation Engineers. Encana has a Reserves Committee of independent board members which reviews the qualifications and appointment of the IQREs. The Reserves Committee also reviews the procedures for providing information to the evaluators. All booked reserves are based upon annual evaluations by the IQREs. Annually, the Reserves Committee recommends the selection of IQREs to the Board of Directors for its approval. The evaluations by the IQREs are conducted from the fundamental petrophysical, geological, engineering, financial and accounting data. Processes and procedures are in place to ensure that the IQREs are in receipt of all relevant information. Reserves are estimated based on material balance analysis, decline analysis, volumetric calculations or a combination of these methods, in all cases having regard to economic considerations. In the case of producing reserves, the emphasis is on decline analysis where volumetric analysis is considered to limit forecasts to reasonable levels. Non-producing reserves are estimated by analogy to producing offsets, with consideration of volumetric estimates of in place quantities. Encana Corporation 18 Annual Information Form (prepared in US$)
Page 1 and 2: Encana Corporation Annual Informati
Page 3 and 4: Introduction This is the annual inf
Page 5 and 6: General Development of the Business
Page 7 and 8: Completed the divestiture of non-co
Page 9 and 10: Encana’s operations are focused o
Page 11 and 12: Production (After Royalties) Natura
Page 13 and 14: In 2010, Encana signed a deep cut p
Page 15 and 16: Production (After Royalties) Natura
Page 17: Market Optimization Market Optimiza
Page 21 and 22: Competitive Conditions All aspects
Page 23 and 24: A comprehensive community investmen
Page 25 and 26: (9) Mr. Harrison was a director of
Page 27 and 28: Audit Committee Information The ful
Page 29 and 30: External Auditor Service Fees The f
Page 31 and 32: Credit Ratings The following inform
Page 33 and 34: Legal Proceedings The Company is in
Page 35 and 36: Additionally, the U.S. and Canadian
Page 37 and 38: Encana does not operate all of its
Page 39 and 40: Transfer Agents and Registrars The
Page 41 and 42: Assumptions with respect to forward
Page 43 and 44: Reserves Data (Canadian Protocol) S
Page 45 and 46: Summary of Net Present Value of Fut
Page 47 and 48: Pricing Assumptions (Forecast Price
Page 49 and 50: Probable Reserves (Forecast Prices
Page 51 and 52: Undeveloped Reserves, Significant F
Page 53 and 54: Abandonment, Tax and Costs Incurred
Page 55 and 56: Landholdings with No Attributed Res
Page 57 and 58: Production Volumes (Before Royaltie
Page 59 and 60: Per-Unit Results (Before Royalties)
Page 61 and 62: Netbacks by Country (Before Royalti
Page 63 and 64: Executed as to our report referred
Page 65 and 66: Appendix D - U.S. Protocol Disclosu
Page 67 and 68: Notes: (1) Definitions: a. “Net
Page 69 and 70:
Standardized Measure of Discounted
Page 71 and 72:
Changes in Standardized Measure of
Page 73 and 74:
Capitalized Costs and Costs Incurre
Page 75 and 76:
Notes: (1) Fee lands are those land
Page 77 and 78:
Production Volumes (After Royalties
Page 79 and 80:
Netbacks by Country (After Royaltie
Page 81 and 82:
Appendix E - Audit Committee Mandat
Page 83 and 84:
Meetings Committee meetings may, by
Page 85 and 86:
Quarterly Financial Statements 3. R
Page 87 and 88:
22. Obtain and review a report from
Page 89:
Other Matters 38. Review and concur
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