Encana's Montney emerges as a top global play

Driving value from this prolific condensate asset

Back in 2014 industry watchers began calling the Montney “the Marcellus of the North,” drawing comparisons to the prolific and profitable natural gas play in Pennsylvania. In 2017, a new moniker is being used, “Canada’s Eagle Ford,” due to its emergence as a leading condensate play with productivity and economics that compete with the well-known Texas oil play.

"If you look at what’s happened for us in the Montney over the last few years, well productivity keeps improving and the average liquids content, dominated by condensate, continues to get higher, " said Encana President & CEO Doug Suttles.

Unconventional pioneers

Encana entered the Montney 15 years ago and built a premium position comprising 600,000 net acres. The company is a lead innovator in the Montney and among the very best operators in the play. Encana’s contiguous acreage position provides the opportunity to drill longer laterals, drive greater efficiency and develop at scale to maximize corporate returns.

The Montney was one of the areas where Encana pioneered the practice of combining horizontal drilling and hydraulic fracturing, and the company drilled its first horizontal well there in 2005. This innovation, coupled with Encana’s development approach, helped revolutionize the industry, making recovering oil and natural gas from shale both possible and profitable.

Encana continues to innovate at a rapid pace. Longer laterals, improved targeting and advanced completions, coupled with the “cube” development approach that targets stacked layers of resource from a single above-ground location, is driving better well performance and lower costs, underpinning the Company’s growth plan.

A leading condensate play

The Montney has as many as six stacked layers of resource and a transition from gas to liquids that occurs along its entire length. Much of Encana’s Pipestone acreage in Alberta sits in the play’s “volatile oil window” with a resource of about 45 million barrels per section. The Company’s Pipestone wells are among the most productive in the play.

"This is really exciting. Effectively, these are oil wells," Suttles noted.

Encana’s premium return well inventory includes nearly 7,000 locations in the Montney. These locations are the focus of Encana’s future development in the play. With its world class acreage position, Encana’s on track to grow total Montney liquids production to 70,000 barrels per day by 2019, with the majority being high-value condensate.

Encana has taken decisive steps to secure take away capacity to support its growth plans and manage price risk. Through a combination of pipeline transportation and term financial basis hedging, Encana expects that less than a third of its 2018 to 2020 Western Canadian natural gas production will be exposed to the AECO benchmark.

In the Montney, with its liquids-rich premium return inventory, Encana is layering a world class condensate play over an already leading natural gas play. That combination means the play no longer needs to be compared to the Marcellus or the Eagle Ford; the Montney stands on its own as one of the world’s best resource plays.

Legal Advisory

ECA stock price

TSX $6.53 Can 0.02

NYSE $4.92 USD 0.005

As of 2019-09-20T15:43:00. Minimum 15 minute delay