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EnCana to Move Forward with Deep Panuke Gas Project
EnCana Corp. is moving forward on the Deep Panuke natural gas project offshore Nova Scotia, and 300 MMcf/d of gas could begin flowing as early as 2010.
The company’s board of directors approved the $700 million project, which will be located about 175 kilometers off the coast of Halifax. The project is expected to deliver more than US$400 million in royalties to the Nova Scotian province over its 13-year life.
EnCana’s revised plan to develop the Panuke, which had been put on hold four years ago, was approved earlier this month by federal regulators (see Daily GPI, Oct. 4).
“Over the past five years, EnCana employees, the government of Nova Scotia, federal and provincial regulators and the Atlantic energy community have worked diligently to achieve this important milestone,” said CEO Randy Eresman. “We are excited to move ahead with the development of the Deep Panuke discovery.”
The Calgary-based producer said its “key” natural gas resource play production in 3Q2007 rose 15%; overall, it reported an 8% increase in gas production in 3Q2007 to 3.63 Bcf/d, mostly driven by double-digit production increases in six of the company’s nine gas resource plays, led by Cutbank Ridge in northeast British Columbia (47% increase), East Texas (36%), Bighorn in west-central Alberta (32%), Jonah in Wyoming (29%), and coalbed methane output in central and southern Alberta (22%).
Cutbank Ridge’s output growth followed more production from the Cadomin zone, EnCana said, along with an increasing contribution from the Montney and Doig formations. The increase in Jonah, EnCana’s second largest resource play, “can be attributed to improved response from frac stimulations and increased availability of capacity on regional pipelines due to system expansion and added compression on the gas gathering system.”
EnCana, which is Canada’s largest gas producer, said its gas output to date in 2007 has averaged about 3.5 Bcf/d, in line with full-year guidance of 3.46 Bcf/d. Current production is about 3.6 Bcf/d. The company said it is on track to “modestly” exceed its full-year natural gas production guidance. EnCana expects it will likely achieve closer to 4% growth in gas production, slightly higher than its original 3% growth forecast.
Oil and natural gas liquids output rose 1% to 136,000 b/d. Total gas and liquids production rose 7% on a pro forma basis to 4.45 Bcfe/d, or up 15% a share. Oilsands output grew 33% to about 57,000 b/d (29,000 b/d net).
EnCana reported that profit in the quarter fell to $934 million ($1.24/share) from $1.36 billion ($1.65) in 3Q2006. However, in the year-ago period earnings increased on a one-time gain from property sales. Operating earnings, which exclude most charges, dropped 11% to $961 million ($1.27/share) from $1.08 billion ($1.31). Cash flow jumped 17% to $2.22 billion ($2.93/share) from $1.89 billion ($2.30).
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