EnCana Looks to Expand Oilsands Production to 500,000 bpd
Oilsands lands hold an estimated 5 billion to 10 billion barrels of recoverable resources.
Following a comprehensive assessment of the company's 1.2 million acres of oilsands lands, EnCana Corporation is developing plans to significantly expand production from its estimated 5 billion to 10 billion barrels of recoverable oilsands resources - assets that have the potential to reach a production rate of 500,000 barrels of oil per day in the next 10 years.
North American natural gas and in-situ oilsands - twin cornerstones of
EnCana has essentially completed the process of focusing the company on North American resource plays, principally unconventional natural gas and in-situ oilsands. The company has established a leading position in North American natural gas production and believes its current resource holdings can sustain an average annual gas sales growth rate of 10 percent for several years. Complementing this unconventional gas strategy is a tremendous growth opportunity in unconventional oilsands, which EnCana believes have the potential to deliver more than a twelve-fold production increase from the current level of about 42,000 barrels per day.
"We believe the combination of advances in thermal extraction technologies and the strengthening of world oil prices have set the stage for EnCana to generate significant long-term value for EnCana shareholders through accelerated oilsands investment and development. With 1.2 million acres, EnCana is the largest owner of Canadian oilsands lands. Our lands contain an estimated 40 billion barrels of original oil in place. They rank among the very highest quality with estimated recoverable resources of between 5 billion and 10 billion barrels," said Randy Eresman, EnCana's Chief Operating Officer.
"This is a world-class energy resource and EnCana is the technical and cost leader in the in-situ development of Canada's massive oilsands. Our Industry-leading oilsands recovery teams have proven the technical capabilities of steam-assisted gravity drainage (SAGD) - a foundation for internal investment initiatives and possible joint ventures and partnership arrangements that we expect will significantly expand our production," Eresman said. "As a result of the increased opportunity in its oilsands projects, EnCana now believes it has the potential to achieve a growth rate of 15 to 20 percent in its North American oil and natural gas liquids sales between 2006 and 2009."
EnCana's in-situ oilsands generating widespread interest
In recent months, EnCana has received a number of unsolicited inquiries from a variety of oil companies, including major multinationals, integrated producers and national oil companies, seeking to participate with EnCana in oilsands development. In response to these inquiries, EnCana is pursuing various business opportunities, such as possible equity investments, farm-ins, asset swaps, long-term bitumen supply agreements and the integration of upstream and downstream assets - initiatives that would enable EnCana to participate in low-cost market development solutions that could expand the company's business beyond being a pure bitumen producer.
"We are considering alternatives aimed at reducing risk, enhancing value, accelerating development and realizing attractive returns from our bitumen resources," Eresman said.
EnCana Investor Days to detail growth strategy today in Calgary and
Wednesday in New York City
At the company's Investor Days, Monday in Calgary and Wednesday in New York City, senior executives and business unit leaders from across EnCana will detail the potential of the company's portfolio of long-life, sustainable-growth natural gas and oilsands resource plays.
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