Encana’s wholly-owned subsidiary Encana Oil & Gas has signed an agreement to sell its San Juan assets, to Denver-based DJR Energy for $480m.
Located in New Mexico, the San Juan assets of Encana include approximately 182,000 net acres. The assets delivered average production of approximately 5,400 barrels of oil equivalent per day including 3,900 barrels per day of liquids in 2017.
Encana president and CEO said: “This transaction is consistent with our strategy and our objective of delivering quality returns to our shareholders. It adds to our financial strength and is aligned with our focus on maximizing the value of our assets and disciplined allocation of capital.
“This is a very exciting year for our company as we deliver strong growth and generate free cash flow, demonstrating the strength and quality of the business we have built.”
The transaction is subject to the satisfaction of normal closing conditions and customary closing adjustments.
It is expected to be completed in the fourth quarter of 2018 with an effective date of 1 April 2018.
Encana is a North American energy firm that is involved in the production of natural gas, oil and natural gas liquids directly and indirectly through its subsidiaries.
In April, the company an agreement with Keyera Partnership, a subsidiary of Keyera , for the funding of the remaining development of its Pipestone Liquids Hub and planned Pipestone Processing Facility.
The agreement was expected to offer Encana with an additional 33,000 barrels per day (bbls/d) of net raw condensate processing capacity and 170 million cubic feet per day (MMcf/d) of net inlet natural gas processing capacity.
In June last year, Encana Oil & Gas (USA) agreed to divest its Piceance natural gas assets to Denver-based Caerus Oil and Gas for around $735m.
Located in northwestern Colorado, Encana’s Piceance assets comprised of around 550,000 net acres of leasehold and around 3,100 operated wells.
The wells produced an average 240 million cubic ft per day (MMcf/d) of natural gas and 2,178 barrels per day (bbls/d) of liquids in the first quarter of 2017.
Piceance Basin is a geologic structural basin in northwestern Colorado. The basin includes reserves of coal, natural gas, and oil shale.