EnCana has noted its exploration and production activities in its third quarter financial and operational results.
Shale Gas Plays Continue to Show Promise
"In the third quarter of 2008, we strengthened our position in the Haynesville gas resource play by acquiring 25,000 net acres, increasing our land position to about 400,000 net acres, plus 63,000 net acres of mineral
rights. We continue to see great potential in this promising shale play," Eresman said. "EnCana, along with our partner, Shell Exploration & Production, has an industry-leading land position in this area of Louisiana. We currently have six rigs running with a focus on cost reduction and completion optimization. We will target drilling and completing the first well in the mid-Bossier shale in the fourth quarter. In northeast British Columbia and
northwestern Alberta, our already strong land position in the Montney play has expanded to more than 700,000 acres. With that, EnCana has the largest disclosed land base in this emerging unconventional gas field. And, at Horn River in British Columbia, EnCana and partner Apache Corporation have completed seven wells this year, with one of our most recent wells delivering encouraging results, flowing for the first 30 days at an average of almost 8 MMcf/d."
EnCana Increases Ownership in Deep Panuke
In August 2008, EnCana acquired additional interests in one of the licenses making up the Deep Panuke natural gas field offshore Nova Scotia. EnCana now owns substantially all of the Deep Panuke field. The $700 million Deep Panuke project is on budget and on schedule to begin producing first gas in late 2010.
Weak U.S. Rockies Gas Prices Prompt Production Shut-in at Jonah
Due to lower natural gas prices in the U.S. Rockies region, EnCana has shut-in approximately 50 MMcf/d of production (net of royalties) at the company's Jonah key resource play in Wyoming. Although EnCana hedged
100 percent of expected production from the Rockies region, production levels have been higher than anticipated, creating a small exposure to Rockies spot prices. As a result, EnCana has decided to limit production at Jonah to 580 MMcf/d (net of royalties) for October. If prices improve, EnCana will re-evaluate a return to productive capacity. Also, during September, a testing outage of the Rockies Express Pipeline resulted in lower gas prices in the U.S. Rockies region, prompting EnCana to shut-in approximately 60 MMcf/d
(5 MMcf/d annualized).