Following the lead of other North American independents in recent weeks, Calgary-based EnCana Corp. on Tuesday said it added 482 MMboe of audited, proved reserves last year, and that it boosted its production replacement total by 203%. Daily oil, natural gas and natural gas liquids sales also increased year-over-year by more than 9% to reach 650,200 boe after royalties.

“Adding 1.7 Tcf of North American gas entirely through the drill bit is the clearest possible demonstration of the growth potential of our huge resource play assets,” said CEO Gwyn Morgan in a statement.

EnCana’s proved reserves increased from 2.11 Bboe to 2.36 Bboe, a 12% increase over 2002. The company added 478 MMboe of proved reserves through the drill bit, 55 MMboe by acquisition and divested of 51 MMboe for total net additions of 482 MMboe before production.

By commodity, net reserves included 1.7 Tcf of natural gas reserves and 204 million bbl of crude oil and natural gas liquids. Reserves at year-end were 8.4 Tcf of natural gas and 957 million bbl of crude oil and natural gas liquids. The company’s proved reserve life index remained at 10 years.

EnCana said all of its booked reserves numbers were based upon annual evaluations by the “independent qualified reserve evaluators,” whose evaluations were “conducted from the fundamental geological and engineering data. EnCana believes this is the most stringent standard of reserves governance available to the industry, and that it goes well beyond external reviews or audits of reserves.”

Morgan noted that when EnCana was formed by the merger two years ago, “we decided to adopt one of the predecessor company’s practices and have the entire reserve base of the merged company externally evaluated. This resulted in some downward revisions that were previously disclosed in our year-end 2002 reserves report, but also placed us on a very solid base going forward.”

Most of the reserves growth was concentrated in North America, which contains about 90% of the company’s reserves and production. Approximately 60% of the reserves additions were North America natural gas. Major areas of reserves growth were in the Jonah and Mamm Creek gas fields in the U.S. Rockies, the Greater Sierra and Cutbank Ridge properties in northeast British Columbia and in coalbed methane lands and oil sands in eastern Alberta. The company did not book any proved reserves from its discoveries in the Gulf of Mexico or off the East Coast of Canada.

Natural gas sales averaged 2.57 Bcf/d, up about 8% from 2002, while oil and natural gas liquids sales averaged 222,500 bbl/d, up 13%. EnCana drilled 5,632 net wells in 2003, comprised of 5,016 development wells and 616 exploration wells.

Strong natural gas sales increases came from the U.S. Rockies, up nearly 50% to average 588 MMcf/d. Canadian heavy oil sales averaged 87,900 bbl/d, a 26% increase due primarily to the expansion of the company’s oil sands production at Foster Creek.

In the fourth quarter, EnCana’s oil and natural gas sales averaged 713,900 boe/d, up 13% from 632,700 boe/d in 4Q2002. Natural gas sales averaged 2.68 Bcf/d. Gas production was up 9% after adjusting for higher levels of withdrawal from storage in the fourth quarter of 2002. Oil and natural gas liquids sales in the fourth quarter of 2003 averaged 266,900 bbl/d, up 32% from the same 2002 period. EnCana drilled 1,517 net wells in the fourth quarter of 2003, comprised of 1,306 development wells and 211 exploration wells.

In other news, EnCana said that starting with year-end 2003, it will report its financial results in U.S. dollars and will report its reserves and production according to U.S. protocols to ensure a more direct comparison to other North American producers. There would be no change to the physical volumes produced and sold or to the actual reserves. EnCana’s fourth quarter and 2003 results will be reported on Feb. 26.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.