DIGITAL CONVEYANCE OF CANADIAN LANDS

Transcription

1 DIGITAL CONVEYANCE OF CANADIAN LANDS Don MacDiarmid VP, Legal Services, Canadian Operations Sherry Batke Advisor, Land Calgary April

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3 Future Oriented Information In the interests of providing Encana Corporation ( Encana or the Company ) shareholders and potential investors with information regarding Encana, including management s assessment of Encana s and its subsidiaries future plans and operations, certain statements contained in this presentation are forward-looking statements or information within the meaning of applicable securities legislation, collectively referred to herein as forward-looking statements. Forward-looking statements in this presentation include, but are not limited to: projections contained in the 2012 Corporate Guidance (including but not limited to estimates of cash flow, including per share amounts, natural gas, oil and natural gas liquids ( NGLs ) production, capital investment and its allocation, net divestitures, operating costs, and estimated 2012 sensitivities of cash flow and operating earnings); projections for 2013 (including but not limited to capital investment, net divestitures, net capital investment, natural gas, oil and NGLs and total liquids production, cash flow, net debt, and cash balance as of year-end); 2012 projected net debt and cash balance as of year-end; projection for long-term natural gas prices to reflect marginal supply cost; achieving a more balanced portfolio of production and cashflow; projected number of wells to be drilled in 2012 and their distribution among the Company s plays; projected percentage shift of capital investments to liquids rich plays from 2012 to 2013 and expected cash flow contribution from liquids production by 2013; the flexibility of capital spending plans and the sources of funding therefore; the ability to maintain investment grade credit rating; ability to attract new joint venture capital and implement existing joint ventures; projection to maintain current level of dividends; the effect of the Company's risk management program, including the impact of commodity price hedges in 2012 and 2013; projections, estimates and future plans and strategies for the Canadian and USA Divisions, various properties, plays basins and other assets, including liquids content and production growth for , PIIP, COIP, NGIP and EUR, target well cost, drilling, completion and tie-in ( DCT ) costs, operating cost, transportation cost, drilling plans and well inventories, reductions in supply costs and estimates of reserves and economic contingent resources; forecast date of first natural gas production for Deep Panuke; projected coal to gas displacement for 2012 to 2013; expected coal unit retirements by 2025 and expected increase in potential natural gas demand; expected increase in natural gas demand from transportation; projected North American LNG export opportunity up to 2020, including from Kitimat LNG Project; short-, medium- and long-term projected increase in natural gas demand from various sectors; projected North American natural gas production from 2012 to 2013, including by product types; projected future North American natural gas prices; projected U.S. and Western Canadian ethane and propane supply and demand up to 2017; and expectations for NGLs' prices, supply and demand in the future. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the Company s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forwardlooking statements. These assumptions, risks and uncertainties include, among other things: volatility of, and assumptions regarding natural gas and liquids prices, including substantial or extended decline of the same and their adverse effect on the Company s operations and financial condition and the value and amount of its reserves; assumptions based upon the Company s current guidance; fluctuations in currency and interest rates; risk that the Company may not conclude divestitures of certain assets or other transactions (including third-party capital investments, farmouts or partnerships, which Encana may refer to from time to time as partnerships or joint ventures, regardless of the legal form) as a result of various conditions not being met; product supply and demand; market competition; risks inherent in the Company s and its subsidiaries marketing operations, including credit risks; imprecision of reserves estimates and estimates of recoverable quantities of natural gas and liquids from resource plays and other sources not currently classified as proved, probable or possible reserves or economic contingent resources, including future net revenue estimates; marketing margins; potential disruption or unexpected technical difficulties in developing new facilities; unexpected cost increases or technical difficulties in constructing or modifying processing facilities; risks associated with technology; the Company s ability to acquire or find additional reserves; hedging activities resulting in realized and unrealized losses; business interruption and casualty losses; risk of the Company not operating all of its properties and assets; counterparty risk; downgrade in credit rating and its adverse effects; liability for indemnification obligations to third parties; variability of dividends to be paid; its ability to generate sufficient cash flow from operations to meet its current and future obligations; its ability to access external sources of debt and equity capital; the timing and the costs of well and pipeline construction; the Company s ability to secure adequate product transportation; changes in royalty, tax, environmental, greenhouse gas, carbon, accounting and other laws or regulations or the interpretations of such laws or regulations; political and economic conditions in the countries in which the Company operates; terrorist threats; risks associated with existing and potential future lawsuits and regulatory actions made against the Company; risk arising from price basis differential; risk arising from inability to enter into attractive hedges to protect the Company s capital program; and other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by Encana. Although Encana believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list of important factors is not exhaustive. In addition, assumptions relating to such forward-looking statements generally include Encana s current expectations and projections made in light of, and generally consistent with, its historical experience and its perception of historical trends, including the conversion of resources into reserves and production as well as expectations regarding rates of advancement and innovation, generally consistent with and informed by its past experience, all of which are subject to the risk factors identified elsewhere in this presentation. Assumptions with respect to forward-looking information regarding expanding Encana's oil and NGLs production and extraction volumes are based on existing expansion of natural gas processing facilities in areas where Encana operates and the continued expansion and development of oil and NGL production from existing properties within its asset portfolio. Forward-looking information respecting anticipated 2012 cash flow for Encana is based upon, among other things, achieving average production for 2012 of 3.0 Bcf/d of natural gas and 30,000 bbls/d of liquids, commodity prices for natural gas and liquids based on NYMEX $3.25 per Mcf and WTI of $95 per bbl, an estimated U.S./Canadian dollar foreign exchange rate of $1.00 and a weighted average number of outstanding shares for Encana of approximately 736 million. Forward-looking information respecting anticipated 2013 cash flow for Encana is based upon achieving average production for 2013 of between 2.9 Bcf/d and 3.1 Bcf/d of natural gas and 60,000 bbls/d to 70,000 bbls/d of liquids, commodity prices for natural gas and liquids based on NYMEX $3.50 per Mcf and WTI of $90 per bbl, an estimated U.S./Canadian dollar foreign exchange rate of $1.00 and a weighted average number of outstanding shares for Encana of approximately 736 million. Furthermore, the forward-looking statements contained in this presentation are made as of the date hereof and, except as required by law, Encana undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.

4 Presenters Legal Donald MacDiarmid has been practicing law for nearly 25 years and is currently Vice-President Legal Services Canadian Operations, at Encana. Prior to attending law school Don worked for 5 years with Gulf Canada Resources in various petroleum engineering roles in Calgary and Estevan, SK. In 18 years of private practice law with Bennett Jones LLP and later Osler, Hoskin and Harcourt LLP, Don's work focused on energy and construction transactions in oil sands, conventional O&G and electrical power projects, both domestically and internationally. Outside of his legal work, Don is the Chair of the Board of the Calgary Centre for Newcomers, a nonprofit organization that assists in the settlement and integration of immigrants into the Calgary community. Logistics Sherry Batke, CPLCA, certified Lean practitioner, Senior Land Advisor at Encana. She has served on the CAPLA Board in the Director and Executive roles and committees including Leadership, and Government Relations, and is currently active on the CAPLA Alberta Tenure Industry Advisement Committee and co-chair of the Awards Committee. Sherry facilitates and participates in resolving industry, regulatory and company workflow challenges and promotes effective information, communication, governance and record management for oil and gas. She enjoys the pursuit of effective management of assets and value add to companies, government, industry and land careers alongside the changing and trending world of technology and business process management - enterprise to workflow. Supporting Q&A Tom Zuorro, VP Land, Ember Resources Alistair Anderson, Director, Mineral Land Asset Management, Encana

5 AGENDA Legal Considerations Logistics Potential Recommendations Questions

6 CONVEYANCE SIZE

7 Legal Considerations Historically, contracts could be concluded orally or in writing. Technological advances have provided a number of evidentiary alternatives to the extremes of oral or hand-signed written contracts: recorded phone conversations facsimile or pdf signatures exchange of s electronic signatures Electronic Transactions Act (Alberta) establishes that where a document must be evidenced in writing, an electronic signature will satisfy the legal requirement excluded from the Act, however, are agreements that create or transfer interests in land, including interests in mines and minerals.

8 Statutes of Frauds, 1677 (UK) Legal Considerations Question: Can the writing requirements of the Statute of Frauds be satisfied where: entire agreement is set forth in or on a website the agreement is signed electronically each party receives a complete printable copy of the electronic agreement?

9 Leoppky v. Meston, 2008 ABQB Legal Considerations Case has not been considered by an appeal court. Signature was a pdf of actual human signature not a stylized computer generated signature. Documents required for Land Titles Office registration should still be hand-signed originals. As Statute of Frauds is intended to protect against fraud, it will be important to be able to show that the application of electronic signatures was controlled by the individuals whose signatures are being used.

10 Reduce Time & Legal Cost, Maintain Quality & Control

11 What s the difference?

12 DIGITAL EXAMPLE CO-SIGN WEBSITE

13 TEMPLATES & VOLUME OVERALL

14 REQUIREMENTS

15 TIME: PROJECT COMPONENTS

16 QUALITY: PROCESS CONTROLS

17 Cost Analysis $140, $ 127,000 $120, $100, $80, $60, $40, $ 51,500 Signing (Digital) Signing (Pen) Bulkloading Storing Imaging Printing (Digital) Printing (Pen) $20, $ 4,100 $- Past ("IF" All Manual) Present (Actual - Combo) Future ("IF" All Digital)

18 FUTURE POTENTIAL

19 IS DS RIGHT FOR YOUR DEAL?

20 RECOMMENDATIONS Meet requirements of Statutes of Fraud Share knowledge and learnings with industry Evolution industry expectations risk mitigation by industry and regulators Mirror pen process managing change and details Manage industry requirement gaps with Vendor support Certification of Signature Cost Savings Efficient & Accurate

21 Questions?

22 ENCANA Alistair Anderson Sherry Batke Steve Biswanger Stephen Cyr Brandon Ferguson Heather Gale Terri Harper Steve Johnson Naomi Kenyon Dyan Kidd Don MacDiarmid Linda MacNeil Shane Moss David Pawlik Myles Pirie Melissa Sadal Thank You Either directly or indirectly, these people and corporations made the difference! Rose Schellenberg EMBER RESOURCES LTD. Tom Zuorro Steve Gill Norine Miller Lynda MacNeil Darlene Starr Kelly Thom ARX Co-Sign Mike Milton WEST CANADIAN Viktoria Kazcur Patricia Rye Julie Shaver Kim Simpkin Sterling Swartout Meaghan Sutherland Elizabeth Waters Brian Weston Shawn Wyman CAPLA

23 COSTS: PROJECT COSTS ALL PEN OVERALL COST OF DEAL PEN 100% Total Time In Hours $/Hr $100/Hr * 5 people Cost To Place Pen Signatures Total Time * $/Hr Print Costs Imaging / Storing Costs Pen 67 $ 500 $ 33,500 $ 4,200 $ 4,800 Digital (Converted to Pen) 111 $ 500 $ 55,500 $16,600 $ 12, $ 89,000 $ 20,800 $ 17,200 $ 127,000 $ 127,000 Associated Costs Pen Sign Printing Average / page $ 0.22 Imaging Average / page $ 0.52 Storing Average / page $ 0.10 Signing (Pen) Average / signature $ 1.67

24 COSTS: PROJECT COSTS PEN & DIGITAL OVERALL COST OF DEAL OVERALL SAVINGS (FROM ALL PEN TO PEN & DIGITAL) $ 127,000 PEN 40% Total Time In Hours $/Hr $100/Hr * 5 people Cost To Place Pen Signatures Total Time * $/Hr Print Costs Imaging / Storing Costs 67 $ 500 $ 33,500 $ 4,200 $ 4,800 $ 42,500 DIGITAL 60% Total Time In Hours $/Hr $100/Hr * 2 people Cost To Place Digital Signatures Total Time * $/Hr Print Costs Bulk Loading Costs 5 $ 200 $ 1,000 $ 6,000 $ 2,000 $ 9,000 $ 34,500 $ 10,200 $ 6,800 $ 51,500 $ 51,500 Associated Costs Pen & Digital Sign Printing Average / page $ 0.22 Imaging Average / page $ 0.52 SAVED $ 75,500 Storing Average / page $ 0.10 Bulk Loading Average / page $ 0.20 Signing (Pen) Average / signature $ 1.67 Signing (Digital) Average / signature $ 0.10

25 WORKFLOW TYPE CHART

26 PROCESS CONTROLS