In 2008, EnCana's total proved reserves increased 5 percent to 19.7 Tcfe at an average F&D cost of $2.50 per Mcfe. EnCana added 2.5 Tcfe of proved reserves, compared to production of 1.7 Tcfe, resulting in a reserve replacement of 150 percent for 2008 production.
Cutbank Ridge, Bighorn and East Texas resource plays contributed to proved reserves additions of 1.9 Tcf of natural gas. Proved reserves of 387 Bcf were added for the Deep Panuke natural gas project, for which development is well underway and first production is expected in late 2010. About 130 million bbls of oil and NGLs were added, about two-thirds at Foster Creek and Christina Lake, where there were positive reserves revisions. Despite the low-price environment at year end, these projects had no reserves writedowns, which reflects the quality of the underlying reservoirs and EnCana's strong operating performance. EnCana's thermal oil projects have about 670 million bbls of proved reserves, of which about 80 percent is undeveloped.
F&D costs for natural gas and associated liquids were approximately $2.90 per Mcfe. When the cost of acquiring non-developed land in 2008 is excluded from the calculation, F&D costs averaged $2.45 per Mcfe. Natural gas and associated liquids reserves additions were approximately 2.0 Tcfe with capital investments of $5.8 billion in 2008, compared to 2007 reserves additions of about 2.0 Tcfe with capital investments of $4.7 billion. In 2008, F&D costs for crude oil were approximately $8.35 per bbl, up from about $3.60 per bbl in 2007. Crude oil reserves additions were approximately 123 million bbls and capital investments were $1 billion in 2008, compared to 2007 reserves additions of about 233 million bbls and capital investments of $840 million.
Three-year F&D Averages $2.02 per Mcfe
For the three years 2006-2008, EnCana's F&D costs averaged $2.02 per Mcfe. For natural gas and associated liquids, F&D costs averaged $2.65 per Mcfe based on reserves additions of about 5.8 Tcfe and capital investments of $15.6 billion. For the same period, F&D costs for crude oil averaged $5.30 per bbl based on reserves additions of about 555 million bbls and capital investments of $2.9 billion.
Reserves Replacement Cost in 2008
Reserves replacement cost for 2008 was approximately $2.60 per Mcfe, which includes divestitures of 222 Bcfe for proceeds of $800 million. EnCana's three-year (2006-2008) reserves replacement cost was approximately $2.55 per Mcfe.
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