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Encana expects gas output boost in Q4

04 May 2017 21:44 (+01:00 GMT)
Encana expects gas output boost in Q4

Houston, 4 May (Argus) — US independent producer Encana said it expects its natural gas production to receive a significant boost in the fourth quarter of 2017, when two new gas processing plants in Canada's Montney shale come online.

The plants, named Tower and Sunrise, belong to midstream provider Veresen Midstream, a jointly-owned limited partnership between Veresen and Kohlberg Kravis Roberts.

Construction is ahead of schedule, and both plants should startup in the fourth quarter, Encana executives said during the company's first quarter earnings call.

A third plant under construction, called Saturn, is scheduled to come online in the first quarter of 2018.

Encana saw strong well performance in the first quarter, which was largely attributed to design improvements, chief executive Doug Suttles said.

First quarter production was ahead of expectations at 317,900 b/d of oil equivalent (boe/d), 1pc lower than total production in the fourth quarter of 2016.

This included liquids production of 110,900 b/d, of which almost 80pc was light oil and plant condensate.

Meanwhile, natural gas production averaged 1,241 MMcf/d.

Large oil and gas producers are still reeling from last year's low energy prices. The sharp downturn prices spurred producers to rein in the development of North America's most prolific oil and gas fields.

But the resulting decline in production allowed prices to rebound and companies are looking to future quarters to reestablish year-over-year production growth.

Until the plants come online, Encana expects its natural gas production to decline over the second and third quarters of 2017.

The Montney shale basin is in northern Alberta and British Columbia, Canada.

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