2009-08-10-2008-07-01-2008-07-01

Leased a total of 220,000 net acres in Horn River shale.

EnCana Corp., Calgary, (Toronto; NYSE: ECA) reports it has acquired a total of 220,000 net acres in the Horn River shale in northeastern British Columbia. EnCana discovered the play in 2003 and is now the largest landholder in the northeastern British Columbia basin. EnCana formed a 50/50 joint venture in 2007 on a portion of the play with Apache Corp., Houston, (NYSE: APA) and together have drilled nine wells. In first-quarter 2008, Apache drilled three horizontal wells with initial test rates of 8.8 million cubic feet per day, 6.1 million and 5.3 million. EnCana has drilled four additional wells currently in various stages of completion. The wells are drilled and completed using similar techniques to those successfully implemented in the Barnett shale in Texas, primarily large multi-stage fracs in long-reach horizontal wells. "The Horn River shale is an emerging play in a remote northern location that will require substantial road and pipeline installation before full-scale development can occur," says Mike Graham, EnCana executive vice president and president of the Canadian foothills division. "Advances in our multi-stage fracturing and horizontal drilling are expected to improve the economics of the play in the months and years ahead. The British Columbia government continues to work with industry setting the business foundation that helps advance these unconventional natural gas plays." Referring to acquisitions in both the Haynesville shale in East Texas and the Horn River shale, EnCana president and chief executive Randy Eresman says, "Recent exploration wells drilled by EnCana, its partners and industry indicate these two resource plays hold the potential to eventually become amongst the largest in North America. Each of these plays has been compared in size and scope to the prolific Barnett shale in north-central Texas, which currently produces more than 3 billion cubic feet per day and continues to grow." He says EnCana's positions in these plays have the potential to ultimately achieve production levels approaching 1 billion cubic feet per day net to the company, comparable in size to the potential announced in its more-established plays at Montney in northeastern British Columbia and Deep Bossier in East Texas. Eresman says EnCana will continue to high-grade its portfolio by divesting noncore properties through 2008.