Encana Corporation (TSE:ECA, Mkt cap 9.25B, P/E – , Div/yield 0.09/3.36, EPS -0.14, Shares 842.50M) has announced the sale of all of its oil and gas assets in Colorado’s Denver Julesburg Basin to a joint venture owned by Canada Pension Plan Investment Board (CPPIB) and Denver-based private firm Broe Group.
The Calgary-based firm said the decision was taken in order to balance the books and “create greater flexibility in this market environment”.
The deal is said to be worth somewhere in the region of US$900 million, with 95% of the entity to be owned by CPPIB and the remaining 5% held by Broe Group.
The sale of the 51,000 net acres of the Denver Julesburg field, located in northeast Colorado, streamlines Encana’s oil and gas ventures to four regions.
“As we advance our strategy we continue to focus our portfolio and capital on our four most strategic assets, the Permian, Eagle Ford, Duvernay and Montney,” said Encana chief executive Doug Suttles.
“Our efforts to transform our portfolio, improve efficiency and grow margins are increasing returns and strengthening our balance sheet, positioning Encana for success throughout the commodity cycle. The new entity is acquiring a quality asset along with a highly talented team.”
Encana highlighted how it has netted a profit of approximately $2.7 billion this year from combined sales of assets, while it aims to have reduced its debt by around $3 billion by the end of the year.
This latest announcement comes only two months after Encana agreed to sell $850-million worth of its natural gas assets in northern Louisiana.
The deal is expected to close in the fourth quarter of 2015, subject to regulatory approvals.
Encana Corporation is a Calgary, Alberta based company engaged in the exploration, development, production and marketing of natural gas, oil and natural gas liquids. Encana operates 3 business segments: Canadian Operations, which includes the exploration for, development of, and production of natural gas oil and NGLs and other related activities within Canada; USA Operations, which includes the exploration for, development of, and production of natural gas oil and NGLs and other related activities within the United States and Market Optimization, which includes third-party purchases and sales of products that provide operational flexibility for transportation commitments, product type, delivery points and customer diversification. Market Optimization sells all of the Company’s upstream production to third-party customers. More from Reuters »
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