Focus on Quality Corporate Returns

Transcription

1 ENCANA CORPORATION Focus on Quality Corporate Returns Doug Suttles President & Chief Executive Officer

2 ENCANA Our Objectives North American leader in: Generating free cash flow ~$1.5 billion cumulative over plan Cash flow growth ~ 25% CAGR Corporate returns ROCE climbs to 10-15% Execution efficiency ~$9,000 per flowing BOE Disciplined capital allocation 99% of capital to core assets Multi-basin advantage World class premium inventory in Texas oil and Canadian condensate Strong balance sheet Innovation company Focus on environmental, health, and safety performance TOP TIER RESOURCE OPERATIONAL EXCELLENCE BALANCE SHEET STRENGTH MARKET FUNDAMENTALS CAPITAL ALLOCATION 2

3 ENCANA S VALUE PROPOSITION What Makes Us Unique Return on Capital Employed climbs to 10-15% over the 5 year plan ~25% Cash flow CAGR 2018F 2022F ~$1.5 Billion Free cash flow 2018F 2022F Assumes flat $50/bbl WTI oil price, flat $3/MMBtu NYMEX natural gas price. 3

4 LONG TERM FOCUS ON GENERATING RETURNS Consistent Strategy Our strategy has been consistent since 2013 Focus on profitable growth has been a key element since we first rolled out our strategy We will continue to focus on growing value versus volumes Disciplined focus on generating profitable growth Concentrated capital allocation Acceleration of core assets Refocused operations to lower cost structures Organizational alignment From Strategy Launch Nov

5 Capital ($MM) Cum. Free Cash Flow ($MM) Cash Flow ($MM) Corporate Margin ($/BOE) AN OPERATOR INVESTORS CAN COUNT ON Increasing Value & Resiliency 2017F-2022F Cash Flow ~25% CAGR Updated 5 year plan is better across the board Capital productivity, margins, cash flow growth & leverage all improved by >10% with a $5/bbl lower oil price Maintaining efficiencies in a busier industry Exit-to-exit production growth well ahead of plan Major facility milestones achieved in Q ahead of schedule & under budget Innovation & discipline delivering value Expanding margins Enhancing productivity & capital efficiency Balance sheet is very strong Well positioned for 2018 & beyond 2018 growth within cash flow Generating strong free cash flow from 2019 onward Leading corporate return generation 4,000 3,000 2,000 1,000 3,000 2,000 1, F 2018F 2019F 2020F 2021F 2022F 2017F 2018F 2019F 2020F 2021F 2022F Capital Cash Flow Corporate Margin ~$1.5B of Cumulative Free Cash Flow Cumulative Free Cash Flow 1,750 1,500 1,250 1,

6 ROCE (%) FOCUS ON CORPORATE RETURNS Generating Value Innovation & Discipline Drive Returns 15% 5 year plan Return on Capital Employed climbs to 10-15% 10% Stringent capital discipline Highly efficient execution fueled by innovation Among the lowest overhead costs in industry Minimizing non-well capital & managing risk 5% 0% 2018F 2019F 2020F 2021F 2022F 6

7 ENCANA IS AN INNOVATION COMPANY Leveraging Technology & Commercial Ingenuity Deeply rooted in our culture Structured innovation process with focus on value Proprietary real-time data analytics and first principles modeling Rapid knowledge transfer across our portfolio Technical and commercial ingenuity Encana Shale Technology Exchange October 2-4, 2017 >70 proprietary papers presented 7

8 RESILIENT BUSINESS MODEL Capital Discipline & Risk Management Multi-basin portfolio Short cycle capital Highly focused capital allocation Integrated supply chain Flexible commercial arrangements Diversified market access Robust hedge program Investment grade credit rating 2.5x Net Debt to Adjusted EBITDA 3.2x 2.9x ~2x <2x 1.5x Q2 2017F 2018F 2019F F 8