Canadian energy firm Encana has signed a $3.1bn agreement to acquire Freeport-McMoRan Oil & Gas’ (FM O&G’s) Eagle Ford shale assets.
The Eagle Ford assets include all of FM O&G’s interests on around 45,500 net acres of land in the Karnes, Wilson and Atascosa counties of south Texas.
The assets had estimated net proved reserves totalling 59 million barrels of oil equivalents and estimated net proved and probable reserves of 69 million barrels of oil equivalents at the end of 2013.
Production from the field averaged 53,000 barrels of oil equivalents a day in the first quarter of 2014 and the acreage has an estimated drilling inventory of over 400 locations.
Encana recently agreed to sell natural gas properties in the Jonah field for approximately $1.8bn.
Encana president & CEO Doug Suttles said that the company is replacing natural gas production with high-margin oil and liquids production.
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By GlobalData"Overall, this acquisition fully aligns with our strategy announced last November; it will significantly boost our oil and liquids output, improve our ability to generate cash flow and enhance our portfolio of world-class resource plays," Suttles added.
The transaction is expected to be completed by the end of the second quarter this year.
Image: Encana president and CEO Doug Suttles. Photo: courtesy of Encana Corporation.
