Canadian-based Encana’s wholly owned subsidiary Encana Oil & Gas (USA) has agreed to sell its Piceance natural gas assets in north-western Colorado to Denver-based Caerus Oil and Gas for $735m.
Encana has also indicated that it will reduce its midstream commitments by approximately $430m, and market Caerus' production associated with the assets.
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Encana president and CEO Doug Suttles said: "This transaction advances our strategy, makes the company more efficient and delivers significant proceeds that we will use to further strengthen our balance sheet.”
Comprising around 550,000 net acres of leasehold and about 3,100 operated wells, the Piceance assets, on average, produced 240 million cubic feet of natural gas per day and 2,178 barrels of liquids per day through the first quarter of this year.
The estimated proved reserves were 814 billion cubic feet equivalent (bcfe) in 2016.
The transaction is scheduled to be completed during the third quarter of this year and is subject to the fulfilment of closing conditions, regulatory approvals, closing and other adjustments.
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By GlobalDataBMO Capital Markets acted as Encana's financial advisor for the transaction.
Encana has core assets in Permian Basin, Eagle Ford, Duvernay, and Montney, while Caerus Oil and Gas invests in upstream oil and gas assets.
