UPDATE 2-Encana to sell assets in Wyoming natural gas field for $1.8 billion
* Assets located in Wyoming's Jonah field
* Estimated proved reserves 1,493 bln cubic feet equivalent
* Sale also includes over 100,000 undeveloped acres (Adds details on production and background of properties sold, joint-venture lands; updates shares)
CALGARY, Alberta March 31 (Reuters) - Encana Corp, Canada's largest natural gas producer, said on Monday it was selling its properties in Wyoming's Jonah natural gas field to an arm of private equity firm TPG Capital for $1.8 billion, as part of a plan to shed assets and concentrate its operations.
The sale includes properties producing about 323 million cubic feet of gas per day, about 12 percent of Encana's natural gas output in 2013, 1.5 trillion cubic feet of reserves, 24,000 acres of developed lands and 100,000 acres of exploration lands near the Jonah field called the Normally Pressured Lance area.
The sale is Encana's latest under Chief Executive Doug Suttles, who is restructuring the company to cut its dependence on low-value natural gas and focus on five shale fields with reserves high in oil and valuable natural-gas liquids.
"With the divestment of Jonah, we are unlocking value from a mature, high-quality asset and allowing our teams to focus on our five core growth areas and continue with execution of our new strategy," Suttles said in a statement.
The company said proceeds will be used for normal corporate purposes, including debt reduction, acquisitions and capital investment.
Part of Encana's Jonah lands were included in a $250 million joint-venture agreement signed in 2011 with Northwest Natural Gas Co, a Portland, Oregon-based gas distributor. Northwest said in a statement it has renegotiated its agreement with Encana and will retain ownership of some Jonah reserves.
Northwest will no longer drill wells in the field but has the right to participate in some future wells with TPG under a joint operating agreement.
Encana is focusing on five shale fields - Montney in British Columbia, Duvernay in Alberta, the DJ Basin in Colorado, the San Juan Basin in U.S. Southwest, and the Tuscaloosa Marine Shale in U.S. South.
Evercore and Davis Graham & Stubbs LLP advised Encana on the deal, while Vinson & Elkins LLP was TPG's adviser.
Encana's shares were down 13 Canadian cents to C$23.57 by late morning on the Toronto Stock Exchange. (Additional reporting by Swetha Gopinath in Bangalore; Editing by Paul Simao)
- Total CEO de Margerie killed in Moscow as jet hits snow plow |
- Sweden gets two new sightings, as hunt for undersea intruder goes on
- Pistorius starts five-year term for killing Reeva Steenkamp
- U.S. to funnel travelers from Ebola-hit region through five airports
- Ebola crisis turns a corner as U.S. issues new treatment protocols