Encana Corporation (NYSE:ECA) Q2 2018 Earnings Conference Call - Preliminary Transcript

Aug 01, 2018 • 09:00 am ET


Encana Corporation (NYSE:ECA) Q2 2018 Earnings Conference Call - Preliminary Transcript


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Good day, ladies and gentlemen, and thank you for standing by. Welcome to Encana Corporation's Second Quarter Results Conference Call. As a reminder, today's call is being recorded. At this time, all participants are in a listen only mode. Following the presentation we will conduct a question and answer session. [Operator Instructions]. For members of the media attending in a listen only mode today, you may quote statements made from any of the Encana representative. However, members of the media who wish to quote others who are speaking on this call today, we advise you to contact those individuals directly to obtain their consent. Please be advised that this conference call may not be recorded or rebroadcast without the express consent of Encana Corporation. I'd now like to turn the conference call over to Corey Code, vice president of Investor Relations. Please go ahead Mr. Code.

Corey Code

Thank you, operator and welcome everyone to our second quarter results conference call. This call is being webcast and the slides are available on our website at encana.com. Before we get started, please take note of the advisory regarding forward-looking statements in the news release and at the end of our webcast slides. Further advisory information is contained in our annual reports and other disclosure documents filed on SEDAR and EDGAR. I also wish to highlight that in Encana prepares its financial statements in accordance with US GAAP, and it reports its financial results in US dollars. So references to dollars means US dollars and the reserves resources and production information are after royalties unless otherwise noted.

This morning, Doug Suttles, EnCana's President and CEO will open the call; Sherri Brillon, CFO will highlight our financial performance; Renee Zemljak, our EVP of Midstream, Marketing and Fundamentals will highlight the benefits of our marketing strategy; and Mike McAllister our COO will then describe our operational results. We will then open the call up for Q&As. We'll now turn the call over to Doug Suttles.

Doug Suttles

Thanks, Corey, and thanks everyone for joining us this morning. Our second quarter results demonstrate why EnCana is quickly differentiating itself as an operator that excels in execution at scale. We put forth an ambitious objective at the start of the year to achieve 30% annual production growth while spending within cash flow.

Our strong performance this year has put us in a position to meet that ambitious growth target. And we now expect to generate free cash flow this year. Our cash flow continues to grow to a combination of increased liquids mix, our relentless focus on efficiency our and/or approach to maximizing realize prices.

This means that we are translating higher commodity prices into higher margins. As a result, we now expect our 2018 cash flow margin will average about $16 per barrel equivalent from our previous target at $14. Activity across our core assets were at peak levels during the quarter, setting us up to deliver 400,000 to 425,000 barrels of oil equivalent per day in the fourth quarter.