Encana's 3rd Quarter Report...First Blush
EnCana management has just finished its prepared remarks.
Here is what I gathered from these remarks.
Things are going very well in the TMS, but future efforts will be focused toward lowering costs.
The last 3 wells have averaged 1,100 barrels per day peak production.
So, what does this mean going forward.
Simple...per the prepared remarks...they have 3 options...
1. They can Aggressively Advance the play.
2. They can decide it isn't competitive with their other plays and Exit the play.
3. They can Advance the play at a Moderate Pace.
And, no decision has been reached at this point.
The question and answer session only solidified the prepared remarks
They are pleased, BUT, they haven't decided what they will do going forward. They did sound as if they planned to take the moderate pace route for the time being. I heard no immediate exiting thoughts from the comments.
The term RPH was used without clarification. I think it is an EnCana term meaning "Resource Play Hub. In other words, this is the 4 well pad drilling plan that we are seeing them move toward now.
The implication was that costs need to come down using the 4 well pad in order to help them continue to stay here in the TMS.
They bragged on the potential of the play, but the bottom line remains the return on investment. With costs as high as they are, the ROI simply may not be as competitive as in other plays...unless the price of oil goes much higher...