Calgary energy producer Encana sells Bighorn assets for US$1.8 billion
CALGARY - Encana Corp. is selling its Alberta-based Bighorn natural gas properties to Jupiter Resources for about US$1.8 billion, as the Calgary energy producer puts its focus on specific regions for growth.
Encana said Friday that it hasn't been putting a lot of investment in its Bighorn assets this year.
"This transaction advances our strategy by unlocking value from our portfolio as we focus on developing our core growth plays and extracting additional value from our base assets," CEO and president Doug Suttles said in a news release.
"Bighorn is a high quality asset that has not been receiving significant investment in 2014. Going forward, it should serve as an excellent foundational asset for Jupiter Resources," Suttles said.
The sale to Jupiter Resources includes about 360,000 net acres of land along with Encana's working interests in all pipelines and other facilities.
In May, Encana spent US$3.1 billion to enter the oil-rich Eagle Ford shale district in Texas, tilting the company more towards oil.
Encana has honed in on core areas: the Montney and Duvernay in Western Canada; the DJ Basin in Colorado; the San Juan Basin in New Mexico and the Tuscaloosa Marine Shale in the southeastern United States. The Eagle Ford becomes a sixth.
Encana could focus on up to eight core areas, Suttles has said.
The company also recently sold dry gas assets in Wyoming and East Texas, which are less attractive than ones that produce oil and natural gas liquids.
Last fall, Suttles unveiled a new strategy for Encana, which had for years struggled with low natural gas prices, and juggled operations in dozens of different regions.
Encana (TSX:ECA) also cut 20 per cent of its staff and spun off some of its Alberta land holdings into a separate publicly traded business called PrairieSky Royalty Ltd.
Jupiter Resources is a private oil and gas exploration and production company focused on natural gas properties in Western Canada and is also headquartered in Calgary.
"We are very excited about the opportunity to actively develop the Bighorn assets, one of North Americaâ€™s premier liquids-rich natural gas projects in an area that has generated some of Canadaâ€™s most prolific well results in recent years," CEO Simon Bregazzi said in a statement.
The deal is expected to close later this year.
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