Encana annual report summary - 2010

TAKE A CLOSER LOOK AT OUR
RESOURCE POTENTIAL
TAKE A CLOSER LOOK AT THE
BENEFITS OF NATURAL GAS
14.3
$
4.05
65%
100
TCFE TOTAL PROVED RESERVES
OPPORTUNITY- RICH
• increased total proved reserves
by 12 percent from 2009
• additional 20.0 Tcfe 1C
(low estimate) economic
contingent resources
• 11.7 million total net acres
• over 20 years of drilling
opportunities
37,000
NET DRILLING LOCATIONS (BEST ESTIMATE)
• large geographically-diverse,
high-quality portfolio of
resource plays
• pursuing additional value and
enhanced project returns from
liquids-rich production
CAPITAL DISCIPLINE
• strong investment grade
credit rating
• healthy balance sheet, with debt
to capitalization at less than
40 percent and a debt to adjusted
EBITDA at less than 2.0x
• approximately one-half of 2011
daily production hedged to provide
greater cash flow certainty
MCF 2010 CORPORATE AVERAGE
SUPPLY COST *
LOW-COST FOCUS
• goal to lower supply cost to
approximately $3 per Mcf over the
next 3 to 5 years
• maximizing operational efficiencies
and cost savings achieved through
resource play hub approach
• continual assessment and highgrade
of asset portfolio through
acquisition and divestiture program
• leveraging third-party capital to
lower our costs, increase capital
efficiencies and bring forth value
recognition sooner through
increased development activity
TEN
NATURAL GAS-POWERED DRILLING
RIGS DEPLOYED
CULTURE OF INNOVATION
• multi-discipline, knowledge-sharing
teams refining resource play hubs
across key and emerging plays
• pioneered use of cost-saving
fit-for-purpose drilling equipment
• strategic pad site design for
concurrent drilling, completion,
production and midstream
operations
• commenced construction on five
natural gas fueling stations
We are rising to the challenge of sustaining
our business success and increasing
the value of every Encana share in a low
natural gas price environment through
capital discipline, risk management and
by applying technology, efficiency and
innovation to our resource play hub
production model.
With our enormous resource potential in many of North America’s most prolific
natural gas resource plays, we will continue to grow the reserves and productive
capacity of our diverse and abundant portfolio of opportunities.
Our goal is to be the highest-growth, lowest-cost senior natural gas producer
in North America. By accelerating production growth from our high-quality,
low-cost resource base, establishing joint venture investments and building
demand for natural gas, we are pursuing the greatest value proposition
for our shareholders.
I invite you to take a closer look.
Randy Eresman
President & CEO
Encana Corporation
LESS CO 2
EMISSIONS THAN COAL
PER KILOWATT HOUR
THE CLEANEST-
BURNING FOSSIL FUEL
• 25 percent less CO 2 emissions
than oil
• particulates from combustion
90 percent lower than oil and
99 percent lower than coal
1/3
LESS EXPENSIVE THAN GASOLINE
AT THE PUMP
AFFORDABLE
NATURAL GAS
• 15 to 30 percent less expensive
than diesel
$
450
BILLION VALUE ADDED TO CANADIAN
AND U.S. ECONOMIES*
A DOMESTIC RESOURCE
• up to 35,000 jobs created with every
1 percent increase in North American
natural gas production
• estimated $160 billion improvement
in foreign trade balance if natural gas
displaces foreign oil for transportation
YEARS OF CURRENT SUPPLY IN NORTH
AMERICA AT CURRENT CONSUMPTION RATES
AN ABUNDANT
RESOURCE
• a secure, made-in-North America
energy solution
REDUCED
EMISSIONS
BY CONVERTING LARGE TRUCKING FLEETS
TO NATURAL GAS
FUELING A TRANSPORT
PARADIGM
• Canadian federal report recommends
expanded natural gas use
across medium- and heavy-duty
transportation sectors
• Colorado state grants supporting
infrastructure to accelerate market
for compressed natural gas
2024
THE YEAR NATURAL GAS IS FORECAST TO BE
THE LEADING SOURCE OF ENERGY (ALBERTA
ELECTRIC INDUSTRY MARKET STUDY)
CLEAN ENERGY FOR THE
POWER INDUSTRY
• Colorado legislation designed to
replace coal with natural gas in
aging generation units
*Supply cost is defined as the flat NYMEX natural gas price that yields a risked internal rate
of return of 9 percent after tax: does not include land costs.
*IHS Global Insight: September 2009 – The Contributions of the Natural Gas Industry to the
U.S. National and State Economies; February 2010 – The Contributions of the Natural Gas
Industry to the Canadian National and Provincial Economies