Here are the slides along with my comments.
|Source: Encana's Analyst Day - USA Division - Slide 3|
I believe that this is the first time that Encana has released play reserves. 9.4 billion barrels in place is signficant. They did not present estimated recoverable reserves on a play level. Using a 6% recovery, estimated reserves total 564 MMBOE (EOG has reported 6% for the Eagle Ford play). That equates to 1.589 MBOE/Acre. In a 1000 acre unit, that equates to 1.589 MMBOE. Based on their estimate of 1250 wells, reserves per well equate to 451 MBO. In their presentation, they state 730 MBO as a target EUR. The well estimate along with the total net acres presents one well drilled per 284 acres. EOG has recently reported spacing in the Eagle Ford between 65-90 acres.
During the Q&A session, they stated that their RPH technological approach will get them to very attractive economics. They state that they have yet to focus on reducing well costs. It's a target for the 2nd half of 2012. The target this year is $15M well costs for 7500' laterals. The Haynesville experience will assist with significant cost reduction in the future.
Throughout the presentation they mention joint venture partners. They did not announce a TMS partner, so we must conclude that a deal has not been completed. In addition to the Shell rumor, it recently has been rumored that Exxon/XTO might be involved. One partner for the TMS and Eaglebine makes sense. Stay tuned.
They confirmed that the TMS players are sharing data which is smart. The synergy between these companies will shorten the learning curve. Our industry has come a long way the past ten years in this area.
They state that 2012 will continue as a 2 rig program. The 30 day IP's for the Anderson wells are impressive.
|Source: Encana's Analyst Day - USA Division - Slide 4|
The "Rate vs Cum" chart illustrates that the Anderson wells should yield better results than the prior wells. Their target of 730 MBO/well looks achievable.
Congrats to the Encana team. To date, they've been the play leader with regards to acreage acquisition, drilling, frac design, and results. The TMS appears to finally be gaining the respect it deserves.