Encana (TSX:ECA) (NYSE:ECA) successfully started up the Tower
processing plant ahead of schedule and under budget on September
20. The plant is the first of three Veresen Midstream
facilities that support Encana's condensate-focused growth plan in
the Montney.
The Tower facility is in the process of ramping up.
The two other new plants, Sunrise and Saturn, are also ahead of
schedule and under budget with Sunrise expected to start up by
mid-October and Saturn before year-end.
These new plants will more than double Encana's
Montney liquids production from the fourth quarter of 2016 to the
fourth quarter of 2017. The company’s liquids and gas volumes in
the play are expected to grow throughout 2018 as drilling programs
bring the plants to full capacity.
"The Tower plant startup, delivered ahead of
schedule and under budget, is an important milestone in our
strategy and five-year plan,” said Doug Suttles, Encana President
& CEO. "Liquids growth in the Montney is a key driver in
expanding our corporate margin and delivering quality returns.”
Encana’s innovative midstream agreement with
Veresen Midstream enables Encana, via the Cutbank Ridge
Partnership, to construct and operate the three plants, as well as
any future build opportunities, on behalf of Veresen Midstream on a
contracted basis. Veresen Midstream funds and owns the facilities
and Encana pays to use them through a fee-for-service
agreement.
Encana remains on track to deliver its 2017
corporate guidance despite Hurricane Harvey and gas constraints
this summer in western Canada. Impacts from Hurricane Harvey
in the Eagle Ford and Permian were limited to approximately 3,500
barrels of oil equivalent per day (BOE/d) in the third quarter
through well executed recovery plans and strong coordination
between Encana's operations, midstream and marketing teams.
In western Canada, TCPL system maintenance and an
extended third party gas plant turnaround are expected to have a
third quarter production impact of about 55 million cubic feet per
day (MMcf/d). Throughout these gas curtailments, Encana prioritized
liquids-rich gas production to minimize cash flow
impacts.
Based on strong well performance across the
portfolio and early Montney plant startups, Encana now expects
production growth from its core assets to be towards the top end of
its 25 to 30 percent guidance range from the fourth quarter of 2016
to the fourth quarter of 2017.
"We are committed to being an operator that can be
counted on,” said Suttles. “We continue to grow margins, lower
costs and drive efficiency. Our focus on creating a business that
can deliver quality returns through the commodity cycle is paying
off. We are firmly on track with our 2017 guidance and well
positioned for 2018 when we expect to deliver significant value
growth within cash flow.”
Encana CorporationEncana is a
leading North American energy producer that is focused on
developing its strong portfolio of resource plays, held directly
and indirectly through its subsidiaries, producing oil, natural gas
liquids (NGLs) and natural gas. By partnering with employees,
community organizations and other businesses, Encana contributes to
the strength and sustainability of the communities where it
operates. Encana common shares trade on the Toronto and New York
stock exchanges under the symbol ECA.
ADVISORY REGARDING OIL AND GAS INFORMATION
- The conversion of natural gas volumes to barrels of oil
equivalent (BOE) is on the basis of six thousand cubic feet to one
barrel. BOE is based on a generic energy equivalency conversion
method primarily applicable at the burner tip and does not
represent economic value equivalency at the wellhead. Readers are
cautioned that BOE may be misleading, particularly if used in
isolation.
ADVISORY REGARDING FORWARD-LOOKING
STATEMENTS - This news release contains certain
forward-looking statements or information (collectively, “FLS”)
within the meaning of applicable securities legislation. FLS
include: status, operational timing and cost of certain facilities;
expectation of meeting or exceeding targets in Encana’s corporate
guidance and five-year plan; anticipated production, growth and
commodity mix, including impact to cash flow and timing thereof;
ability to expand corporate margin, deliver quality returns, lower
costs and drive efficiency; future build opportunities and funding
thereof; impact of weather and transportation constraints to
production and response thereto; positioning for 2018, including
expectation of growth within cash flow; and performance relative to
peers.
Readers are cautioned against unduly relying on FLS
which, by their nature, involve numerous assumptions, risks and
uncertainties that may cause such statements not to occur, or
results to differ materially from those expressed or implied. These
assumptions include: future commodity prices and differentials;
foreign exchange rates; Encana’s ability to access its revolving
credit facilities and shelf prospectuses; assumptions contained in
Encana’s corporate guidance and in the news release; data contained
in key modeling statistics; availability of attractive hedges and
enforceability of risk management program; effectiveness of
Encana's drive to productivity and efficiencies; results from
innovations; expectation that counterparties will fulfill their
obligations under the gathering, midstream and marketing
agreements; access to transportation and processing facilities
where Encana operates; assumed tax, royalty and regulatory regimes;
and expectations and projections made in light of, and generally
consistent with, Encana's historical experience and its perception
of historical trends, including with respect to the pace of
technological development, the benefits achieved and general
industry expectations.
Risks and uncertainties that may affect these
business outcomes include: business interruption and casualty
losses or unexpected technical difficulties, including impact of
weather and access to properties; the ability to generate
sufficient cash flow to meet Encana's obligations; commodity price
volatility; ability to secure adequate product transportation and
potential pipeline curtailments; variability and discretion of
Encana's board of directors to declare and pay dividends, if any;
the timing and costs of well, facilities and pipeline construction;
counterparty and credit risk; risk and effect of a downgrade in
credit rating and its impact on access to capital markets and other
sources of liquidity; fluctuations in currency and interest rates;
risks inherent in Encana's corporate guidance; failure to achieve
anticipated results from cost and efficiency initiatives; risks
inherent in marketing operations; risks associated with technology;
changes in or interpretation of royalty, tax, environmental,
greenhouse gas, carbon, accounting and other laws or regulations;
risks associated with existing and potential future lawsuits and
regulatory actions made against Encana; impact to Encana as a
result of disputes arising with its partners, including the
suspension by its partners of certain of their obligations and the
inability to dispose of assets or interests in certain
arrangements; Encana's ability to acquire or find additional
reserves; imprecision of reserves estimates and estimates of
recoverable quantities of natural gas and liquids from plays and
other sources not currently classified as proved, probable or
possible reserves or economic contingent resources, including
future net revenue estimates; risks associated with past and future
acquisitions or divestitures of certain assets or other
transactions or receipt of amounts contemplated under the
transaction agreements (such transactions may include third-party
capital investments, farm-outs or partnerships, which Encana may
refer to from time to time as “partnerships” or “joint ventures”
and the funds received in respect thereof which Encana may refer to
from time to time as “proceeds”, “deferred purchase price” and/or
“carry capital”, regardless of the legal form) as a result of
various conditions not being met; and other risks and uncertainties
impacting Encana's business, as described in its most recent Annual
Report on Form 10-K and as described from time to time in Encana’s
other periodic filings as filed on SEDAR and EDGAR.
Although Encana believes the expectations
represented by such FLS are reasonable, there can be no assurance
that such expectations will prove to be correct. Readers are
cautioned that the assumptions, risks and uncertainties referenced
above are not exhaustive. FLS are made as of the date of this news
release and, except as required by law, Encana undertakes no
obligation to update publicly or revise any FLS. The FLS contained
in this news release are expressly qualified by these cautionary
statements.
Further information on Encana Corporation is
available on the company’s website, www.encana.com, or by
contacting:
Investor contact:Brendan McCrackenVice-President,
Investor Relations(403) 645-2978 Patti
PosadowskiSr. Advisor, Investor Relations(403)
645-2252 |
|
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Media contact:Simon
ScottVice-President, Communications(403) 645-2526
Jay AverillDirector, Media Relations(403)
645-4747 |
SOURCE: Encana Corporation
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