The San Juan asset in New Mexico comprises around 182

Encana subsidiary Encana Oil & Gas (USA) has completed the $480m divestment of its San Juan asset in New Mexico to exploration and production company DJR Energy.

At the signing of the asset sale agreement last October, Encana noted that the deal is aligned with its strategy of maximising the value of its assets and disciplined allocation of capital.

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According to the agreement, DJR Energy acquired 182,000 net acres. The San Juan asset produced 5,400 barrels of oil equivalent a day, including 3,900 barrels a day of liquids, in 2017.

During the signing of the agreement , DJR Energy president and CEO Dave Lehman said: “We are now poised to become a dominant player in the San Juan Basin as we combine their asset with our existing footprint and focus our efforts on further developing our acreage.”

“We are now poised to become a dominant player in the San Juan Basin.”

Encana will use the proceeds from the transaction to enhance its financial strength and support its $1.25bn share buyback programme and a 25% increase to the dividend this year.

The company intends to complete the share buyback programme this year following the closure of the $5.5bn acquisition of Newfield Exploration Company.

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Announced last November, the all-stock Newfield transaction will provide Encana with significant positions in three major North American oil and liquids-weighted plays, namely the Permian, STACK/SCOOP and Montney.

The share buyback is subject to the fulfilment of certain conditions, including receipt of regulatory approvals, stock exchange rules and securities laws.

Encana president and CEO Doug Suttles stated that the transaction is a continuation of the company’s efforts to unlock value from non-core assets.

In June 2017, Encana Oil & Gas (USA) agreed to sell its Piceance natural gas assets in northwestern Colorado to Caerus Oil and Gas for $735m.