Encana

From Wikipedia, the free encyclopedia
  (Redirected from EnCana)
Jump to: navigation, search
Encana Corporation
Type Public
Traded as TSXECA
NYSEECA
S&P/TSX 60 Component
Industry Oil and gas
Founded 2002 (2002)
Headquarters Calgary, Alberta, Canada
Key people
Doug Suttles (President and CEO effective June 2013)
Clayton Woitas (Chairman of the Board)
Products

Natural gas Oil

Natural gas liquids
Revenue Increase US$5.858 USD billion (2013)[1]
Operating income US$1,048[1]
Net income US$236[1]
Total assets US$17.8 billion market capitalization (2014-10)[2]
Employees 3500
Subsidiaries Encana Oil and Gas USA
Website www.encana.com

Encana Corporation produces, transports and markets natural gas, oil and natural gas liquids (NGLs). All of Encana’s reserves and production are located in North America, after having undergone an aggressive international divestiture program in the mid-2000s that resulted in the disposition of producing assets in Ecuador and the North Sea, as well as exploratory assets in Chad, Ghana, Brazil, Australia, the Mackenzie Delta, and the Middle East.[3] The corporate headquarters are in Calgary, Alberta. In Canada, Encana has onshore operations in Alberta, northeast British Columbia and an offshore development off the coast of Nova Scotia. In the United States, Encana's subsidiary operates in Colorado, Wyoming, Texas, and Louisiana. In November 2009, Encana split into two independent companies, each focusing on separate operations. Encana now operates in unconventional natural gas and natural gas liquids exploration, processing, and transportation. The other company is an integrated oil company called Cenovus Energy.[4]

Canadian operations[edit]

Encana is Canada’s largest gas producer (Penty 2012-12 China Institute) [5] with a large land position in western Canada of approximately 7.0 million net acres, of which approximately 3.2 million net acres are undeveloped.[6] The subsurface rights for a checkerboard pattern of most of Alberta and part of Saskatchewan were granted to the Canadian Pacific Railway at its formation, in compensation by the government of Sir John A. MacDonald for assuming the risk of developing the golden thread that bound Canada from coast to coast.[7] EnCana is the inheritor of the CPR subsurface (mineral) rights.[8] Key natural gas resource plays include: Bighorn, Coalbed Methane (CBM), Cutbank Ridge and Greater Sierra.[9]

The Deep Panuke project produces and processes natural gas from approximately 250 kilometers offshore southeast of Halifax, Nova Scotia since 2013 .[10]

US operations[edit]

Encana Oil & Gas (USA) Inc. is the US subsidiary of Encana Corporation and headquartered in Denver. It has interest in approximately 2.6 million net acres of land in the US, of which 2.1 million net acres were undeveloped as of 2012.[11] Key resource plays as of 2012 included: Texas, the Haynesville Shale (southwestern Arkansas, northwest Louisiana, and East Texas), Jonah Field in Wyoming, Wattenberg Gas Field in the Denver-Julesburg Basin (abbreviated DJ Basin) in northeast Colorado, extending into Wyoming and Nebraska and the Piceance Basin in Colorado.[12] For oil interest Encana amassed rights for the Collingwood-Utica Shale (Michigan) between 2008 and 2010, mostly in Cheboygan, Kalkaska and Missaukee Counties. Italso has oil interests in the San Juan Basin in New Mexico, and the Tuscaloosa Marine Shale on the border between Mississippi and Louisiana

In December 2011, Encana closed the sale of the majority of its North Texas natural gas producing properties.[13]

By 2013 Encana (USA) was funding about 30 different plays.[14]

Production and profits[edit]

The company’s average production at year end 2011 was 3.3 billion cubic feet per day of natural gas and 24,000 barrels per day of oil and natural gas liquids.[1] It had more than 3500 employees per its April 2011 prospectus.[12]

History[edit]

In 1883, the Canadian Pacific Railway drilled for water near Medicine Hat, AB and discovered natural gas.

In 1958, Canadian Pacific created 'Canadian Pacific Oil and Gas' to manage its oil and gas properties and its mineral rights.

In 1971, Canadian Pacific Oil and Gas merged with 'Central-Del Rio Oils' resulting in 'Pan Canadian Petroleum Limited'.

In 2002, Pan Canadian Petroleum Ltd was spun out of Canadian Pacific Railway. It subsequently merged with Alberta Energy Corporation to form Encana. In April 2002, EnCana Corporation launched operations with President and CEO Gwyn Morgan.[15] "Its initial goal [was]... a big company that couldn’t be taken over."[14]

In spring 2008 residents from Pavillion, Wyoming approached the United States Environmental Protection Agency about changes in water quality from their domestic wells.[16] In May 2008 Encana announced to split into a gas and an oil company.[4]

In 2009, the EPA announced that it had found hydrocarbon contaminants in residents’ drinking water wells in Pavilion, Wyoming.[16] In November 2009, Encana performed the split into a company focusing on North American natural gas production representing about two-thirds of the company's production and its reserves, that retained the name Encana, and an oil company named Cenovus Energy.[4]

In November 2011, a potential buyer backed out of buying the Pavillion gas field.[17] 2011 net earnings slumped to 128 million from over one billion teh year before.[1]

In February 2012, Mitsubishi payed approximately C$2.9 billion for a 40 percent interest in the Cutbank Ridge Partnership with Encana, which involves 409,000 net acres of Montney formation natural gas lands in northeast British Columbia.[18] In December 2012, Encana announced a $US 2.1 billion joint venture with state-owned, Beijing-based PetroChina[5] through which PetroChina would have received a 49.9 percent stake in Encana’s Duvernay Formation acreage in Alberta. This was in line with the rules that "favor minority stakes over takeovers" since Prime Minister Stephen Harper's December 7, 2012 prohibition of purchases by state-owned enterprises seeking to invest in Canadian oil sands.[5] The deal later fell flat. At the end of 2012, Encana's staff had increased to 4,169 employees.[14]

During 2013 Encana's cash flow decreased. The company cut dividends by more than two thirds, and shares fell by more than 15 per cent. In November 2013 it announced a "restructuring plan", to lay off 20 per cent of its employees, to close its office in Plano, Texas, to sell assets and to found a separate company for its mineral rights and royalty interests across southern Alberta.[14] It planned to invest three quarters of its 2014 capital into five projects: Projects in the Montney Formation and the Duvernay shale in Alberta, the San Juan Basin in New Mexico, Louisiana's Tuscaloosa Marine Shale, and the Denver-Julesburg Basin (DJ Basin) in northeast Colorado, extending into Wyoming and Nebraska.[14]

Encana announced in September 2014 that it would acquire Athlon Energy Inc for $7.1 billion.[19]

Lawsuits[edit]

From 2008 through 2010 Encana (USA) accumulated a "large land position" of 250,000 net acres at an "average $150/acre" in the Collingwood-Utica Shale gas play in Michigan's Middle Ordovician Collingwood formation.[20][better source needed] In May 2012 Encana had paid about $185 an acre for oil and gas rights on 2,156 acres (873 hectares) at an auction by the Michigan Department of Natural Resources, which was "88 percent less than the average paid two years ago in the area".[21] In July 2012, Reuters reported about e-mails between Encana and Chesapeake Energy, America's second-largest natural gas producer, to divide up Michigan counties state land leases for an October 2010 auction to suppress land prices.[22] In 2013, a private landowner filed suit against Encana and Chesapeake for bid rigging.[23] Justice Department and Michigan authorities were investigating whether state or federal laws were violated; As of 2014 the IRS and SEC are also still investigating.

In 2013, two property owners adjacent to a drilling unit filed suit against the Michigan Department of Environmental Quality and Encana Oil & Gas (USA) Inc for potential harm due to proximity. In October 2013, the Judge of the Circuit Court of Ingham County issued an injunction against Encana starting to drill until an administrative hearing before DEQ's supervisor of wells had been completed, re part 12 of DEQ's rules for oil and gas operations.[24] In May 2014, the supervisor of wells found with Encana, that the petitioners did "not have standing", because they did not own land within the drilling unit and dismissed the case.[25]

In November 2013, Ecojustice, the Sierra Club and the Wilderness Committee filed a lawsuit against Encana Corporation and the British Columbia's Oil and Gas Commission for excessive water use from lakes and rivers for its hydraulic fracturing for shale gas, "granted by repeated short-term water permits, a violation of the provincial water act".[26]

Criticism[edit]

In northern British Columbia where Encana pipelines have experienced six explosions, media reports indicate the pipeline may have been bombed by disgruntled community members.[27] Encana's hydraulic fracturing operations in the United States are visible in the 2010 documentary, Gasland, which alleges that hydraulic fracturing causes pollution of ground and surface water, as well as air and soil pollution.

Issues were raised for the Deep Panuke project offshore of Nova Scotia, when it was proposed in 2006 as a smaller version with increased ocean discharges and when Encana asked for a "streamlined regulatory process" without public hearings.[28]

Sustainability[edit]

For four years in a row, Encana has been included on the Dow Jones Sustainability Index.[29] Annually, Encana annual publishes a Sustainability Report in which they voluntarily disclose a wide variety of operational statistics including energy usage, emissions intensity, GHG emissions, water usage, flared and vented volumes, reportable spills, reclaimed land, community investment, aboriginal engagement, employee education, ethical controls, governance practices, corruption prevention activities, total staff, attrition, gender ratio's, safety and recordable injuries, and an independent assurance of all statistics.[30] All data is shown annually, benchmarked against prior years. If the metric is trending unfavorably, Encana details how it is addressing the issue.

References[edit]

  1. ^ a b c d e http://www.encana.com/pdf/investors/financial/annual-reports/2013/consolidated-financial-statements.pdf.  Missing or empty |title= (help)
  2. ^ "Encana shares edge lower after CEO suddenly resigns". Calgary, AB: Google. October 3, 2014. Retrieved October 3, 2014. 
  3. ^ "Encana 2002 Annual Report". www.encana.com. Encana. 
  4. ^ a b c "EnCana announces dividing into two companies". The Star (Toronto). 2008-05-11. Retrieved 2010-05-02. 
  5. ^ a b c Rebecca Penty (December 17, 2012). "Encanas PetroChina Partnership May Be First of Many". Edmonton, AB: China Institute, University of Alberta. Retrieved February 1, 2013. 
  6. ^ https://www.encana.com/pdf/investors/financial/annual-reports/2013/annual-information-form.pdf
  7. ^ http://www.fundinguniverse.com/company-histories/canadian-pacific-railway-limited-history/
  8. ^ https://en.wikipedia.org/wiki/Canadian_Pacific_Limited
  9. ^ https://www.encana.com/pdf/investors/financial/annual-reports/2013/annual-information-form.pdf
  10. ^ Joann Alberstat (December 17, 2013). "Deep Panuke project reaches full gas production". Halifax, NS: The Chronicle Herald. Retrieved December 17, 2013. 
  11. ^ https://www.encana.com/pdf/investors/financial/annual-reports/2013/annual-information-form.pdf
  12. ^ a b Encana (April 2011). "DJ Basin". Retrieved 12 May 2013. 
  13. ^ http://www.pipelineandgasjournal.com/encana-sells-north-texas-natural-gas-assets-975-million
  14. ^ a b c d e "Encana laying off 20% of workers". CBC News. 5 November 2013. Retrieved 1 August 2014. 
  15. ^ Encana Corporation (2 April 2002). "EnCana Corporation launches operations". 
  16. ^ a b "EPA region 8; Pavillion". EPA. Retrieved 1 August 2014. 
  17. ^ Abrahm Lustgarten (Nov 29, 2011). "Company Backs out of $45 Million Deal to Buy Troubled Wyoming Gas Field". ProPublica. Retrieved 1 August 2014. 
  18. ^ "Encana Completes Cutbank Ridge Deal with Mitsubishi". LNG World News. Global LNG Limited. 27 February 2012. Retrieved 31 July 2014. 
  19. ^ [ http://www.reuters.com/article/2014/09/29/us-athlon-ene-m-a-encana-idUSKCN0HO13720140929 Encana to buy Athlon for $5.93 billion in push for oil]. Reuters, 29 September 2014
  20. ^ Alan Petzet, ed. (May 7, 2010). "Explorations: Michigan Collingwood-Utica gas play emerging". Oil and Gas Journal.com (Houston, Texas). 
  21. ^ Joe Carroll (26 June 2012). "Encana Expands in Michigan Shale Chesapeake Is Abandoning". Bloomberg News (Bloomberg L.P.). Retrieved 31 July 2014. 
  22. ^ Brian Grow; Joshua Schneyer; Janet Roberts (June 25, 2012). "Energy rivals plotted to suppress land prices". Reuters. Retrieved 31 July 2014. 
  23. ^ Brian Grow; Joshua Schneyer (25 February 2013). "Chesapeake, Encana sued in civil antitrust action". Reuters. 
  24. ^ Lee Smith (February 8, 2014). "Michigan's fracking: Actors and issues". Midland Daily News. Retrieved 1 August 2014. 
  25. ^ author1=Harold Fitch "Supervisor of Wells Orders, Office of Oil, Gas, and Minerals Cause 01-2014 Order Paul Brady & August Jyla". Department of Environmental Quality. State of Michigan. 16 May 2014. Retrieved 2 August 2014. 
  26. ^ Dene Moore (13 November 2013). "Fracking Lawsuit Targets EnCana, B.C. Oil And Gas Commission". Canadian Press (The Huffington Post). Retrieved 1 August 2014. 
  27. ^ CBC, July 2, 2009, Latest EnCana pipeline explosion was deliberate: RCMP
  28. ^ "EnCana unveils smaller Deep Panuke project". CBC. 29 August 2006. 
  29. ^ "Sustainability Leader". www.encana.com. Retrieved 3 October 2014. 
  30. ^ "2013 Sustainability Report". Retrieved 3 October 2014. 

External links[edit]