Tuesday, November 1, 2011

Encana Earnings Call - October 20, 2011

The Tuscaloosa Marine Shale highlights from the call:
"During the quarter, we captured additional acreage in the Tuscaloosa Marine Shale bringing our total land position in this play to approximately 270,000 net acres. We completed an existing horizontal well in Amite County as part of our joint venture agreement and we are very encouraged by the results.  The well had a 30 day initial production rate of 310 barrels per day of light oil from 5 effective completion stages. This well has been on production for about 125 days and we forecast an expected ultimate recovery of 145,000 barrels of oil. We’re currently drilling the first of two planned horizontal wells targeting a 7500’ lateral length with 30 planned completion stages and expect to begin completion activities in November."
Question and Answer Session:
CALLER: In the TMS, the well that you mentioned earlier in your comments. What was the cost of that well and what do you expect a 30 stage 7500’ lateral well to cost?
ENCANA: the well I quoted is the well that…are you talking about the well that we’re currently drilling? 
CALLER: Yes, that was one of them and the past well that you mentioned earlier. 
ENCANA: The past well is a well we inherited in a joint venture partnership, so I don’t have the information on that. The well that we’re drilling today is not really going to be indicative of our long term development costs so it’s very difficult to peg that particular well but I think in the early the days, the wells will be, you know, in the $10 million range and as we’re able to apply scale, we’ll come down to a lower number.


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