Encana to sell Texas shale gas assets to EnerVest
Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corp., has reached an agreement to sell its North Texas natural gas-producing properties to partnerships managed by EnerVest Ltd. for approximately $975 million.
With the completion of this divestiture, plus other non-core asset sales, Encana expects to have net divestitures of approximately $1.7 billion by year-end, which is well within the company's 2011 target of $1-2 billion. Proceeds from these transactions are expected to supplement cash flow generation, strengthen the company's balance sheet and provide financial flexibility going into 2012.
Encana CEO Randy Eresman said: "The sale of this North Texas asset in the Barnett Shale is part of Encana's ongoing portfolio optimization aimed at enhancing the long-term value of the company's vast resource potential. Since we first acquired substantive Barnett Shale production in North Texas seven years ago, we have greatly expanded production and assets on other earlier-life resource plays in Texas and Louisiana. Our Texas and Haynesville key resource plays are producing more than 750 million cubic feet [of gas] per day, and they offer long-term growth opportunities in our well-established mid-continent business unit.
"As we look to 2012, we continue to focus on our highest-return projects, and we plan to direct a greater portion of our capital investment to grow our oil and natural gas liquids production from the more than 2 million net acres we hold on liquids-rich lands across North America."
This sale of Encana's North Texas assets is subject to normal closing conditions as well as regulatory approvals and is expected to close prior to year-end with an effective date of November 1, 2011.
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