Wednesday, October 23, 2013

Encana Earnings Call - 10/23/13

Here are the TMS highlights from Encana's conference call today:

Mike Rimmel - Barclays Capital
Hi, thanks for taking my questions, two from me. Would you mind talking about any infrastructure constraints you guys maybe facing going into the next year particularly wondering about Piceance area? And then, the next one is, just wondering whether there are any updates on the TMS, I know you were in the middle of [indiscernible] wells last quarter? And that’s it from me, thanks.
Michael G. McAllister - Designated COO
Hi Mike, it’s Mike McAllister here. Yeah, first on with respect to infrastructure constraints, we were actually in really good shape here in Bighorn. We have contracts to take all of our product out of that area with – so we’re feeling very confident with respect to that. Up in Peace River Arch, we actually again have, we’re in really good position, we have aligned to our growth out of the Peace River Arch with infrastructure actually that’s being built. And that’s in private chip as well. And I think your third question was related to the TMS and three of the last four wells are meeting, are actually exceeding type curve. The other well, the fourth well if you will below type curve but we understand and that specific well that is was frac communication and re-interference that affected that. So we understand what that issue is and ready to move forward.
Matthew Portillo - Tudor, Pickering, Holt & Co.
Great. And then, just in regards to TMS, you mentioned that the curves are performing at kind of your expectation on three of the wells, could you remind us how you guys think about the EURs in the play and then what you need to see from here to progress that towards commercial development?
Doug Suttles - President & CEO
You know Matt well, well Mike grabbed some of the data, you know, I think the way we are thinking about the TMS is that, we really need to gain the confidence, we really need to move forward rapidly there which is around the type curve not only the early performance on the type curve which as Mike said, we are very encouraged but I would like to get a bit more time under our belt. The second thing is, we have a massive land position there, I think, over 300,000 acres and as we think about that play we need to actually make sure we are confident in the rocks across the play. And the last thing is confident that the costs are coming down, this will be a big focus in 2014 and I hope by the time we exit the year, we actually know the answers to those questions.
Michael G. McAllister - Designated COO
And just with respect to what we’re targeting approximately 600,000 barrels oil equivalent per well.
Matthew Portillo - Tudor, Pickering, Holt & Co.
Okay and just one clarification there, so as you guys think about the wells you’ve seen so far is, is the big takeaway that we should think about it effectively the initial production is meeting your curve expectation, but you’d like to see longer term data before gaining additional confidence in that kind of getting to that 600,000 curve?
Doug Suttles - President & CEO
Yes, absolutely with all of our plays, you see initial IPs very encouraging, but really we want to see sustained production performance and see how well it matches, what are resolute modeling telling us, so really need to see some history there to give us the confidence.
Michael Dunn - FirstEnergy Capital
Good morning or good afternoon everyone. Couple of questions one on the TMS one and the San Juan, on the TMS guys just wondering what your latest thinking is on completions in terms of I believe on the last call or earlier this year, you were talking about targeting completing it above the rubble zone and it seems like we have had maybe some mixed results above or maybe a couple of wells what might like they may have been better below the rubble zone, so just wondering if you are still confident in targeting above the rubble zone? And in the San Juan, you have mentioned 400 to 500 barrels a day, 30 day period there, how should we think about that relative to the targeted EUR you guys talk about the 550,000 BOE EUR, is that sort of above that or on trend with that EUR you talked about? Thank you.
Doug Suttles - President & CEO
Yes, I think Mike this is Doug, I think on the TMS, I think we would probably need to get you on that level of detail about the completion, I can tell you that the big focus there has actually been on changing the completion design itself, changing the frac design which clearly made a big improvement in the last few wells. But I would also caution that I don’t think we believe we’ve yet get the best formula and that will be part of the plan in 2014 and Mike if you want to pick on them San Juan well and --

Entire transcript:
http://seekingalpha.com/article/1765952-encana-corporations-ceo-discusses-q3-2013-results-earnings-call-transcript?part=single

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