Encana to grow liquids production by 30%
$2.5B investment aimed at five oil and liquids-rich assets.
CALGARY — Encana Corp. has announced it will spend up to $2.5 billion on capital investments in 2014 that focus on generating growth in five core liquids-rich resource plays.
Encana will focus three quarters of its planned $2.4 billion to $2.5 billion capital investment on five oil and liquids-rich assets: the Montney, Duvernay, DJ Basin, San Juan Basin and the Tuscaloosa Marine Shale (TMS), which will account for 25% of total production next year while generating about 45% of upstream operating cash flow (before the impact of commodity price hedging).
Operationally, the company said forecasted production is expected to remain unchanged from last year despite a more than 10% reduction in planned capital investment from 2013 levels. Total liquids production is to grow by 30% year-over-year which will offset a small decline in expected gas production for 2014. Growth in higher margin liquids will achieve about a 10% percent increase in netbacks.
“In November, we announced a clear vision and strategy to lay the foundation for Encana’s future,” says Doug Suttles, Encana president and CEO of the Calgary-based energy company. “Going forward through to 2017 we will measure success by our performance on three key indicators; our transition to a balanced commodity portfolio, operational excellence and the integrity of our balance sheet.”