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USA Division | HAYNESVILLE SHALE & EAST TEXASDanny Dickerson, Team Lead, East Texas & North Texas
The New Encana:the clear energy choice
www.encana.com
Haynesville Shale, East Texas, Fort Worth
www.encana.com
Haynesville ShaleAdvancing the 2010 Development Program
2010 Objectives• Drill bit land retention• Mid Bossier testing • Gas Factory pilot• San Augustine extension
71
325
10
2008 2009 2010F
ProductionMMcfe/d
21
18
13
15
8
8
6
5
10
9
18
50 miles
12
8
17
18
11
19
3121
9
20
2022
109
13
4 10
22
16
2323
20
20
D
20
19
25
37
2017
DCD
D
C
AMI area
4
11
20
20
Industry HSVL ECA JV HSVLIndustry MBSR ECA JV MBSREncana Acreage: 429,000 net; including 63,000 net mineral interest
24 hour IPs
NGIP
www.encana.com
Haynesville Land Retention Strategy
• Top performing asset in Encana portfolio• Superb shale quality• Massive NGIP (175-225 Bcf/Sec)• Up to 8 Tcf recoverable*• High deliverability• Close proximity to infrastructure
• 2010 budget is focused on retaining land• 109 net wells (225 gross)• Gas Factory pilot• 20-25 operated rigs• 7-10 non-operated rigs (Shell)
• Will lead Encana’s production and reserve growth
NGIP = Natural Gas in Place*Based on 2P Proved + Probable Reserves & 2C Economic Contingent Resources
www.encana.com
0
5
10
15
20
25
30
35
40
0 500 1,000 1,500 2,000 2,500 3,000
Cumulative Gas (MMcf)
Haynesville Well PerformanceConfidence in Productivity
7.5 Bcf Type Curve12 Fracs
Well rates limited by infrastructure flowing pressures: 7,000 to 10,000 psi
Productivity increases driven by:
• Additional frac stages
• Refining perforation clusters
• Increased proppant concentrations20 stages
12 stages
Gas Rate (MMcf/d)
www.encana.comNote: Diagram not to scale
1’ - 2’ Clusters@ 6 Shots/ft250-300' Stages 50’ - 70’
Spacing
Forward Testing• 5 ½” production casing• 12 -16 stages• Increased proppant concentrations• Sand and other proppants• More perf clusters per stage• Increased lateral length (>4,200 ft)
Horizontal Haynesville Completion DesignLonger laterals, more frac stages = better wells
Current Frac Design
• 5” production casing
• 10 - 14 stages
• 300-350K lb proppant per stage
• 12,000 bbl of slick water & linear gel per stage
• Pump rate of 70-75 bpm
10K Composite Bridge Plugs BHT: 370-400 degreesBHP: 11,000 psi
XXXXXXXXXXX
Stage 10 Stage 9 Stage 8 Stage 7 Stage 6 Stage 5Stage 4 Stage 3 Stage 2 Stage 1
Stage 11
www.encana.com
9.08.89.39.710.7
15.6
Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10F
Haynesville – Focus on Cost ReductionsImproving Operational Performance
DC&T Costs reduced 40%• Best 3 well average $7.4 million• Drilling longer laterals• Spud to release decreased by
16 days
DC&T Costs IP (30 Day)
6
12
$MM MMcf/d
IP (30 day) increasing• Increasing number of frac stages• Increasing clusters per frac stage• More proppant & fluid pumped• Gathering system growth
16.9
13.312.4
7.0
9.88.2
Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10F
www.encana.com
Surface Hole133/8” @
1,850’Fresh Water
Inter’ Hole95/8” @ 10,500’Water Based Mud 11.5 ppg
Lateral Section61/2” Hole @ 12,500 TVD,
16,500 MD’ Oil Based Mud 16 ppg
Current Drill Design• 55 day spud to release
• Faster rig moves
• Built for purpose bits and use of faster motors
• More geological control
• Well section accountability
• Improved formation pressure control
Drill Design Progression• <35 day spud to release
• Consistency
• Pre-set surface casing
• Drill lateral with water based mud
• Optimization – casing, bit selection, motors, etc.
• Utilizing 3D Seismic
Haynesville Horizontal Drilling DesignBit and Motor Optimization
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HaynesvilleManufacturing Process
Step Change in Development• Gas Factory
• Multi-well pads; simultaneous operations
• Manufacturing process • Skidding FFP rigs • Single pipeline connection• Reduced overall foot print
• Downhole spacing ~660 feet• Well orientation N-S• 4,000’+ laterals (12+ stages)• Improved overall gas recovery
= pressure monitoring well
330 ’
380’
430’
390’ 550’
510’
1 Mile
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ECA JV Operated MBSR Well
Current ECA Acreage
9
5
Industry Operated MBSR Well
ECA JV Operated - Completing
ECA JV Operated - Drilling
C
D
50 miles
Jagger
12
D
17
98
E
5
20
8
C
22
Jimmy Brown
Walker
Mid Bossier Shale• 100 to 200 Bcf/section• Encouraging results• High quality shale as good as
Haynesville• 10-15 wells for 2010F• 150,000 to 200,000 acres• 6 Tcfe potential*
North LouisianaMid Bossier
24 hour IPs
*Based on 2P Proved + Probable Reserves & 2C Economic Contingent Resources
NGIP
NGIP = Natural Gas in Place
www.encana.com*3 stages producing
0
5
10
15
20
25
0 60 120 180 240 300 360
Days
Colbert 16-1Blackstone 12H-1Douciere 13H-1CHK Blackstone 26H-1Brown SW 10H-1Walker 2H
EUR = 7.8 BCF HSVLECA Douciere 13-1
Rate limited
EUR = *2.5 BCF MBSSR
ECA Jimmy Brown 9-1
ECA Walker 2H
North LouisianaMid Bossier - Haynesville Comparison
Gas Rate (MMcf/d)
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Haynesville and Mid Bossier NGIPOverlap of 100 Bcf/section in each zone
• Stacked pay
• 14 Tcfe total resource*
• Potential longer laterals
• Double well count
• Double production volumes
• Existing infrastructure
Imagine…
NGIP = Natural Gas in Place*Based on 2P Proved + Probable Reserves & 2C Economic Contingent Resources
Overlap Haynesville/Mid Bossier100 Bcf NGIP in each interval
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Encana HaynesvilleTotal Resource
Total net well inventory • 1P + 1C = 1,600
Average F&D cost: • $1.70/Mcfe
Average supply cost• $3.75/MMBtu
Reserves (Tcfe)1P 2P 3P
0.7 2.0 2.9
Economic Contingent Resources (Tcfe)
1C 2C 3C
5.3 13.5 21.3
F&D & supply cost based on 1P Reserves & 1C Economic Contingent Resources
World Class Shale Gas Opportunity
www.encana.com
• Environmental Management System• Use of surface water for operations• Potential water recycling project• Natural gas powered rigs• CNG fleet trucks & filling station• Multi-well drilling pad development (Gas Factory)• Local workforce training• Energy Summer Camps
Responsible DevelopmentHaynesville & Mid Bossier Shales
www.encana.com
Haynesville Shale Production Growth
Production
2010F
• 110 net wells
• Land retention drilling
• Gas Factory pilot
• Play extension drilling
Activity
325
7110
0
100
200
300
400
2008 2009 2010F
MMcfe/d
www.encana.com
East Texas Growth Opportunities
www.encana.com
Amoruso Development Expanding
0
100
200
300
400
Oct-05
Apr-06
Oct-06
Apr-07
Oct-07
Apr-08
Oct-08
Apr-09
Oct-09
MMcfe/d
Deep Bossier Development
2 miles
E. Amoruso66
Bcf/Sec
Amoruso29
Bcf/Sec
Planned curtailment
Growth• Successful step-out to East• Testing 2-4 analogous
prospects• Working to unlock tight sand
potential in northern area
Deep Bossier Net Production
www.encana.com
East Texas – Deep BossierStrong Well Results
62
54 53
40 39 383941434551
55
0
20
40
60
80
Laxs
on 2
Mad
den
9-4
Judg
e D
igby
7
Sch
arff
3X
McL
ean
E-1
*
Cha
rlene
1*
Live
ly 7
Bon
nie
Ann
1
Lac
Bla
nc 1
S. M
cLea
n B
-1
Fitz
henr
y 1
Sch
arff
5
McL
ean
A-2
Nav
asot
2*
Rus
sell
3
Hen
ley
GU
1
Bay
ou C
arlin
1
AD
Car
r A-1
*
McL
ean
E-2
*
Car
r-Nav
asot
1*
Con
stitu
tion
Sou
th 1
Sch
arff
4
Lily
Hop
pes
2*
Highest North American Average 3 Month Gross Gas Production (‘05 – ‘09)
ECA Deep Bossier WellsECA Deep Bossier 2009
MMcf/d
• Strongest well results in onshore North America• Deep Bossier generates some of the strongest returns in Encana’s portfolio• Encana is the leader in identifying and developing these plays• We’re growing what we have and are on the hunt for more!
* Indicates modeled production due to 2009 curtailmentSource: HPDI
www.encana.com
Aggressively Pursuing GrowthGulf Coast Jurassic Trend
Significant Growth Opportunities• Targeting follow-up to Amoruso step-out success• Expect to drill 2-4 wells in 2010
www.encana.com
Haynesville Simultaneous Operations
Summary
• Haynesville exceeding predictions
• 2010F land retention strategy• Mid Bossier results encouraging• Gas Factory pilot for 2010F• East Texas assets performing
very well• Growth opportunities abound!• Total net well inventory:
• 1P + 1C = 1,600
