Canadian firm Encana’s wholly owned subsidiary Newfield Exploration Mid-Continent has signed a $165m agreement to sell its natural gas assets in Arkoma Basin, US.
Under the agreement, the Oklahoma-based assets will be sold to an undisclosed buyer.
Encana president and CEO Doug Suttles said: “Along with our recently announced agreement to exit China, this transaction shows our commitment to realise value from non-core assets. Proceeds from this sale will be directed to our balance sheet.”
The company’s Arkoma assets consist of approximately 140,000 net acres of leasehold and current production of approximately 77mcf/d, 98% of it being natural gas.
Expected to close in the third quarter of this year, the agreement is subject to ordinary closing conditions and other regulatory approvals.
CIBC Griffis & Small provided advisory services and Davis, Graham and Stubbs served as external legal counsel to Encana for the transaction.
Encana is an energy producer focussed on the production of natural gas, oil and natural gas liquids.
This February, the company acquired US-based Newfield Exploration Company in an all-stock transaction worth C$7.7bn ($5.81bn).
The agreement for the transaction was signed by the parties last November.
As part of a five-year plan to enhance production by more than 60%, the company is targeting liquids-rich production from the Montney basin in Canada and the Permian basin in the US.
The company intends to implement its previously announced C$1.25bn ($944.67m) share buyback programme this year once the required regulatory approvals are obtained.
