EnCana's Long-Life Reserve Capacity

The management of EnCana Corporation (ECA) concentrates on legacy projects and what is termed "unconventional production." <!--more-->This extracts natural gas from gassy shales, tight sands and coal-beds, as well as tar sands in the Athabasca region of northern Alberta, Canada. These types of projects take many years to be identified, developed, and produced, but once ongoing they often maintain output for long periods of time (15 - 30 years).

One problem is that at the just getting started phase capital costs are great. However, they do produce at continuous rates that are often higher than regular wells in their maturity. Further, they are especially enhancing to earnings when prices for oil and gas are rising and the sunken costs of unconventional wells are able to set a strong pace of output without replacement.