corporate responsibility performance data
2009
our approach to reporting We continually evaluate and strive to improve the accuracy, completeness and reliability of our measurements and reporting on our corporate responsibility performance. We have two main objectives in our reporting:
to track our performance to drive the continuous improvement of our corporate responsibility programs
to provide relevant and timely information so stakeholders can make independent assessments and informed decisions about our corporate responsibility performance
We use the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines to help determine which performance indicators to report. We also incorporate guidance from staff, investors, industry associations and experts in sustainability and reporting to ensure the issues we address, and the performance indicators we report on, are material to our business and stakeholders. To ensure the accuracy of our reporting, PricewaterhouseCoopers (PWC) has reviewed our performance measurements and the associated data management processes, calculation methodologies, consolidation and reporting processes for our key performance indicators. All dollar figures are in US currency unless otherwise noted. Where applicable the corresponding GRI indicator, such as LA1, EN23 and SO8 has been listed. Please visit www.encana.com for the complete GRI index, PWC Independent Assurance Report and a list of our policies and practices.
corporate responsibility performance data |
our people Our commitment to corporate responsibility starts with our people, which is why we focus on attracting and retaining the best and the brightest. Our people share ideas to increase production, create a safer place to work and protect our environment.
LA1
2008(2)
2009
Canada
2,816
2,744
U.S.
2,171
2,152
5
2
4,992
4,898
Total workforce (employees and contractors) (1)
Other Total workforce (1) Contractors refers to contract personnel engaged to perform services for Encana. Statistics exclude service companies. (2) Snapshot of all Encana personnel as at December 31, 2008. .
Employee breakdown by gender
Employee breakdown by gender
Female
34%
Male
66%
corporate responsibility performance data |
safety Given that the work we do is not without risks, we are uncompromising in our commitment to safety across our operations. The scope of our operations means that we work with thousands of service providers, contractors and consultants to create a safe work environment. In fact, we require anyone working with us to comply with our policies and practices just as it is expected of all our employees. Our safety performance demonstrates our leadership and commitment to safety. This is visible in our decrease in recordable injury frequency and lost time frequency in 2009.
LA7
2008
2009
Recordable injury frequency (employees and contractors)
0.86
0.74
Lost time injury frequency (employees and contractors)
0.24
0.17
Safety
Occurrence/200,000 hrs worked
(1)(2) Injury InjuryFrequency frequencies (1)(2)
1.4 1.2 1.0 0.8
0.86 0.74
0.6 0.4 0.2
0.24
0.17
0.0
2008 Recordable
2009 Lost time
(1) Estimation of contractor hours is based on operational and capital expenditures using CAPP (2007 conversion factors) and American Petroleum Indusrty methods (2009 conversion factors). (2) Recordable injuries include permanent total disabilities, lost work day cases, restricted work cases, medical treatment cases and fatalities.
corporate responsibility performance data |
environment Environmental performance is the shared responsibility of both leadership and employees. Because each area where we operate presents distinct environmental challenges, we are constantly learning and defining how we incorporate environmental considerations into our operations. The data shows that we are continually reducing the volumes of our spills and reclaiming the areas we have affected. As distinct as the areas in which we operate, so too are the regulatory jurisdictions. The amount reported for environmental fines (EN28) reflects the amount paid in a given year and may include fines levied in previous years. The increase in fines for 2009 reflects an extensive effort by the USA Division to settle and pay all outstanding fines. In the United States, most federal actions against businesses or individuals for failure to comply with environmental laws are resolved through settlement agreements. As part of a settlement, an alleged violator may voluntarily agree to undertake an environmentally beneficial project related to the violation in exchange for mitigation of the penalty to be paid. Supplemental Environmental Projects (SEPs) further the Environmental Protection Agency’s goal of protecting and enhancing public health and the environment. Encana paid $1,719,962 towards fines and SEPs. The indicator EN28 shows only the portion of the settlement agreement that may be considered an environmental fine, which for 2009 was $352,682.
EN23
2008
2009
168
137
8,057
6,755
Total abandoned wells (in current year) awaiting reclamation
887
308
Total abandoned wells, active reclamation complete, awaiting reclamation certificate (2) Well site reclamation certificates received (2)
658
165
66
42
Total wells undergoing active reclamation
620
516
Total reclaimed land (acres)
4,013
138
Environmental fines (3) USD
75,313
352,682
Spills (1) Number reportable Estimated reportable volume (bbls)
EN13
EN28
Abandonment and reclamation (2)
(1) Those that are required to be reported according to jurisdictional regulations. (2) Does not include access road certificates. (3) Fines for non-compliance may not be levied in the same year in which the infraction occurred.
corporate responsibility performance data |
environmental efficiency fund (eef) Through the Environmental Efficiency Fund (EEF) we finance projects that create measurable reductions in emissions, energy, land and water use within operations at Encana.
IRR (%) (1) CO2e avoided (tonnes) (2) Natural gas conserved (Bcf) Capital (US$ Millions)
2008
2009
31
61
58,642
194,973
0.38
1.79
12.45
12.28
(1) Internal rate of return – pre tax, non royalty, non depreciated. (2) 2009 data include results from projects completed in 2008 that have ongoing emission reductions.
corporate responsibility performance data |
environment – air Our measurable actions have seen a decrease of direct greenhouse gas (GHG) energy intensity and GHG emissions in 2009. Our Energy Efficiency Initiative was launched to create measurable reductions in energy use and related air emissions, with over 253,000 tonnes of CO2e avoided through energy efficiency projects initiated to date. This is the equivalent to removing about 53,000 vehicles from the road a year.
EN3
2009
34,419
32,856
1.93
2.07
2008
2009
2,852 3,073
2,734 2,646
0.15 0.12
0.16 0.11
Total energy use (terajoules) (1)(2) Canada
EN4
2008
Energy intensity (gigajoules) (2) Canada
CO2e) (3)
EN16 Direct GHG emissions (kilotonnes Canada (includes Cavalier Power Plant) U.S.(4)(5)
Direct GHG emissions intensity (tonnes CO2e/m3OE) Canada U.S. (1) Canada oil and gas facilities only. (2) Includes fuel gas, flaring and electricity used for production operations, not electricity in office buildings.
(3) Includes emissions from combustion, flaring, reported venting, fugitive equipment leaks and formation CO2 venting as per current StatsCan/Alberta Environment reporting requirements. Base data used to calculate key performance indicators (KPI) include other measured and production based estimates. (4) USA Division calculates combustion type GHG emissions from measured fuel and fuel usage derived from equipment’s power rating and certain operation assumptions. This approach is selected due to existing regulatory requirements for calculation of other air emissions. (5) Encana continues to refine methodologies used to calculate GHG emissions. The USA Division revised the methodology used to compute fuel usage at a number of major facilities. Emissions for the balance of our USA facilities continue to be based on the 2008 calculations. The comparative 2008 numbers have not been restated to reflect revised methodology because measurement data was not available. These adjustments in methodology have contributed to the reported decrease in direct GHG emissions.
corporate responsibility performance data |
environment – air GHG emissions and emissions intensity – 2008 and 2009
0.18
3.500
0.16
3.000
0.14
2.500
0.12
2.000
0.1
1.500
0.08 0.06
1.000
0.04
0.500
0.02
0.000
0
2008
2009
Canada (includes Cavalier Power Plant) Canada
GHG emissions intensity (tonnes CO2e/m3 OE)
GHG emissions (million tonnes (CO2e)
Greenhouse Gas (GHG) emissions and emissions intensity – 2008 and 2009 (1)(2)(3)
U.S.
U.S.
2008
2009
13,997
13,452
6,292
5,472
4,146
3,008
Canada
29,843
32,029
U.S.
63,231
61,421
5,671
5,550
106,636
84,843
EN20 Nitrogen oxides (NOx) emissions (tonnes) (4) Canada U.S. EN20 Sulphur dioxide (SO2) (tonnes) Total gas flared (103m3/yr)
Total gas vented Canada U.S.
(1) Canadian and US emissions methodologies both follow American Petroleum Institute standards though are not directly comparable because data capture processes vary according to business system limitations. The reporting continues to evolve as systems and various regulatory emissions requirements change. (2) Includes emissions from combustion, flaring, reported venting, fugitive leaks and formation CO2 per currently StatsCan/Alberta Environment reporting requirements. Accordingly, 2008 tonnes of emissions corrected downward slightly. Improved calculation methodologies from 2008 to 2009 contributed to the reported decrease in NOx emissions. (3) Direct operated GHG emissions. (4) Estimated values based on operational data. AP-42 NOx emission factor or U.S. regulatory permitted NOx emission factors.
corporate responsibility performance data |
community Encana is committed to contributing in a variety of ways to support healthy and vibrant communities where we operate. Community Investment funds at Encana are directed toward environmental and educational programs, as well as those that support community enhancement, sport and recreation, and family and community wellness.
EC6
EC8
2008
2009
13
10.7
17.02
12.96
Canadian Division
4.12
3.36
USA Division
5.95
5.91
Employee Programs
3.75
3.18
30.92
25.42
Procurement from aboriginal suppliers (US$ millions) Canada (1) Community Investment (US$ millions) (2) Corporate Division
Total (1) Includes some community investment donations and relevant Well Application Fees in British Columbia.
(2) Corporate and Employee Programs do not reflect our post split method of reporting as our systems did not allow us to break out corporate spend that would have been directed to Cenovus Energy Inc.
Community investment summary 2009 (percentage) Community Investment summary 2009 (percentage)
Family and community wellness
15%
Sport and recreation
13%
Environment
5%
Community enhancement
19%
Education
48%
corporate responsibility performance data |
economic Encana has a responsibility to deliver strong financial performance, which adds to the long-term value for shareholders and enhances sustainability. Meeting our financial goals enables us to provide economic value to the communities where we operate. In developing our economic plans, we consider the issues that may have an impact on our business. 2008
2009
13,505
6,732
Operating Expenses
1,252
1,008
Cash Flow(1)
6,354
5,021
8.45
6.68
3,405
749
4.53
1.00
2,605
1,767
3.47
2.35
0.80
0.80
1,865
112
2008
2009
Financial Highlights (Pro Forma) (US$ millions, except per share amounts) Revenues, Net of Royalities
Per Share – Diluted
Net Earnings
Per Share – Diluted
Operating Earnings
Per Share – Diluted
Dividends Per Common Share ($/share) Total Income Tax Expense (1) See Non-GAAP Measures advisory on page 73 in our 2009 Annual Report
Operational Highlights (Pro Forma) After Royalties Production Natural Gas (MMcf/d)
Canada
1,300
1,224
U.S.
1,633
1,616
2,933
2,840
Total Natural Gas (MMcf/d) Oil and NGLs (bbls/d)
Canada
19,980
15,880
U.S.
13,350
11,317
Total Oil and NGLs (bbls/d)
33,330
27,197
Total Production (MMcfe/d)
3,132
3,003
corporate responsibility performance data |
governance Encana complies with best practice corporate governance guidelines published by the Canadian securities regulatory authorities, the provisions of the U.S. Sarbanes-Oxley Act (2002)(SOX) and the rules adopted by the U.S. Securities and Exchange Commission pursuant to SOX. Encana’s approach to corporate governance includes comprehensive operational systems for monitoring, managing and reporting accurately on our business activities. We also have leadership accountabilities in place to ensure that staff acknowledge and understand our policies. These approaches, along with compliance with industry regulations in all our operating areas, help maintain the highest levels of company conduct.
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governance – business ethics Encana is committed to engaging communities, operating ethically, and continuing to meet the expectations of securities regulators. To help meet this commitment, we provide a number of avenues for internal and external stakeholders to confidentially or anonymously report any unethical, illegal, or otherwise inappropriate behaviour they observe. Our Integrity Hotline and Investigations Practice are tools that provide an effective, consistent and appropriate approach, by which incidents that potentially violate established company policies or practices or are potential violations under statutes, regulations, rules and policies applicable to the company or the workplace, may be properly received, reviewed, investigated, documented and resolved.
20092008 newnew investigations investigations (number of investigations) Accepting gifts
7%
Conflict of interest
17%
Fraud
46%
Misuse of assets
10% Harassment
Employee trading
3%
17%
2008 45
(new) (1)
HR4
Business conduct investigations
HR9
Total Incidents of Violations Involving Rights of Indigenous People
SO2
2009 29
0
0
Percentage of Business Units Analyzed for Risk Related to Corruption
100%
100%
SO3
Percentage of employees trained in organization’s anti-corruption policies and procedures
99%
99%
SO8
Monetary value of significant fines and total non-monetary sanctions for non-compliance with laws and regulations
150,000
0
(1) These investigations were conducted by our Investigations Committee, which was launched in 2003.
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advisories Cash flow Certain measures in this data, such as cash flow, do not have any standardized meaning as prescribed by Canadian generally accepted accounting principles (GAAP). Cash flow measures are considered non-GAAP but are commonly used in the oil and gas industry to assist management and investors in measuring the company’s ability to finance capital programs and meet financial obligations. The calculation of cash flow is disclosed in the Consolidated Financial Statements of Encana contained in the corporation’s 2009 Annual Report, which is available on the corporation’s website at www.encana.com.
Crude oil, natural gas liquids and natural gas conversions In this report, certain crude oil and natural gas liquids (NGLs) volumes have been converted to millions of cubic feet equivalent (MMcfe) or thousands of cubic feet equivalant (Mcfe). Also, certain natural gas volumes have been converted to barrels of oil equivalent (BOE), thousands of BOE (MBOE) or millions of BOE (MMBOE) on the same basis. MMcfe, Mcfe, BOE, MBOE, MMBOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion primarily applicable to the burner tip and does not necessarily represent value equivalency at the wellhead.
Corporate entities This report focuses on our performance for the two years ending December 31, 2009. For convenience, reference in the report to “Encana”, the “Company”, “we”, “us”, “our” and similar reference may, where applicable, refer only to include relevant direct and indirect subsidiary corporations and partnerships (each “Subsidiary” or if more than one, Subsidiaries”) and the assets, activities and initiatives thereof. References to financial results of operations refer to the consolidated financial results of Encana Corporation and its Subsidiaries, taken as a whole, except when otherwise noted or the context otherwise implies. All financial data are reported in US dollars and operational data are reported on an after royalties basis, unless otherwise noted.
Pro forma On November 30, 2009 Encana completed a major corporate reorganization that resulted in the Company’s transition into a pure-play natural gas company and the spin off of its Integrated Oil and Canadian Plains assets into “Cenovus Energy Inc.”, an independent, publicly traded energy company. To give investors a clear understanding of post split Encana 2009, financial and operating results in this document highlight Encana’s results on a pro forma basis, which reflect the Company as if the corporate reorganization had been completed for all of 2009 and the previous year represented. In this pro forma presentation, the results associated with the assets and operations transferred to Cenovus are eliminated from Encana’s consolidated results, and adjustments specific to the Split Transaction are reflected.
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