Alaska key area for EnCana

Company looking at several Beaufort Sea, North Slope, Foothills prospects

Kristen Nelson

Petroleum News Editor-in-Chief

EnCana is not drilling in Alaska this winter, Tom Homza, EnCana Oil and Gas (USA) Inc.’s Alaska manager, told the Resource Development Council Nov. 20, but the state is one of EnCana’s key international exploration provinces, and EnCana is “optimistic about the resource potential that remains in Alaska.

“That’s why we’re here investing,” Homza said, “and we’re investing in lands, wells and in the community.”

United Kingdom North Sea, Gulf of Mexico and Atlantic Canada are the company’s three core exploratory areas. EnCana has discoveries in each, which means, Homza said, that those areas receive the lion’s share of the company’s exploration dollars, 70 percent in 2003 — “and they’ll get even more next year.”

EnCana’s 2004 exploration plan is focused around fewer prospects, and prospects that are ready to be drilled. “This means we’re faced with a decrease in our overall exploratory capital budget.”

Although EnCana sees opportunities in Alaska, Homza said, its Alaska exploration effort must compete internally for fewer dollars. So far, he said, Alaska can and does successfully compete within EnCana for exploration funding.

State and federal agencies have allowed access “to quality lands on reasonable terms.” Homza said EnCana could not have competed for Beaufort Sea Mineral Management Services tracts without the incentives offered in the recent lease sale.

EnCana drilled a wildcat exploration well at the McCovey prospect in Alaska’s Beaufort Sea last year and is looking at several other prospects in the Beaufort and on the North Slope for the future. Homza did not provide details about those prospects, but showed a map (see above) with prospects offshore the National Petroleum Reserve-Alaska, offshore northwest of Prudhoe Bay and multiple prospects onshore, in addition to the Foothills where EnCana holds a substantial block of acreage.

“We continue to pursue opportunities on all of our lands,” he said. Many of those opportunities “have been enhanced by the facilities’ operators, who have farmed out acreage, shared technical expertise and data.”

And, Homza said, EnCana is “confident we can reach other mutually beneficial arrangements in the future.”

EnCana’s partners at McCovey were ConocoPhillips and ChevronTexaco.