Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corporation, has initiated a process to divest of its North Texas natural gas producing assets in the Fort Worth Basin located in the Barnett Shale play.
“The initiation of the process to sell Encana’s North Texas assets is a continuation of the company’s ongoing divestiture program, which is well underway and is targeting net divestitures of between US$1 billion and US$ 2 billion for 2011.” said Jeff Wojahn, Encana’s Executive Vice-President & President, USA Division.
The company’s Barnett Shale assets currently produce about 125 million cubic feet equivalent per day and include the associated processing and pipeline facilities on about 52,000 net acres of land in the Fort Worth Basin.
The company plan to retain its mid-continent assets including 295,000 acres of land in the Haynesville Shale, where production is now more than 500 million ft3 equivalent per day. In East Texas, production is about 250 million ft3 equivalent per day and the company’s 240,000 net acres hold strong growth potential. These assets will be retained as they are part of Encana’s long-term growth strategy
Encana is also actively engaged with a number of parties in a competitive process to divest of midstream and producing assets in the U.S. and Canada that no longer fit with its development plans. The company is also in discussions with a number of potential partners looking to make third-party investments aimed at accelerating the value recognition of Encana’s enormous resource potential on its undeveloped lands. Proceeds from these transactions are expected to supplement cash flow generation and strengthen the company’s balance sheet, providing financial flexibility going into 2012.