re: Ann: Update - Sale of Duvernay and Rock C...
What might be coming this fall The review found the company must focus its capital on areas that play to its strengths and deliver the best returns. In his presentation to analysts at the Barclays CEO Energy Conference on Thursday, Mr. Suttles was critical of Encana’s past strategies. “Our capital allocation process is broken,” he told analysts, “We’re funding too many plays. We’re not prioritizing. We’re not focusing our efforts.”
“We have something like 28 or so different asset opportunities in the portfolio and every single one of them is being funded right now. I think we all understand that focus and discipline in capital allocation is the real key to performance and it’s one of the things we love to make radical change in to be successful.”
Suttles didn’t list specific projects that might be on the chopping block. However, he did name the Duvernay shale play in western Alberta as a key area of focus going forward. Suttles admitted Encana has been slow to develop its large Duvernay acreage but that the formation is rich in condensate — a light hydrocarbon needed to dilute bitumen for transport in pipelines — which is particularly prized in the oil sands right now. Suttles also highlighted the Tuscaloosa Marine Shale in Louisiana and Mississippi as a promising oil asset.
