CALGARY, June 21 (Reuters) - Encana Corp ECA.TO said on
Tuesday it reached an agreement to sell its Gordondale oil and
gas assets in northwestern Alberta to Birchcliff Energy Ltd
BIR.TO for C$625 million ($487.98 million).
The sale, which includes some 54,200 net acres of land and
associated infrastructure, is set to close in the summer of 2016
with an effective date of Jan. 1, 2016, pending regulatory
approvals.
Encana's sale of the Gordondale assets, which produced an
average of 25,200 barrels of oil equivalent per day in the first
quarter, comprises 65 percent natural gas and 35 percent
liquids. Estimated proved reserves are some 50 million barrels
of oil equivalent.
Encana said it is reducing midstream and downstream
commitments by more than C$100 million on an undiscounted basis.
No drilling or completions capital was planned for the area in
2016, it said.
Following the sale, Encana's Montney play will comprise of
over 9,000 potential drilling locations with two-thirds of those
wells located in the condensate-rich part of the play, it added.
"We are tightening our portfolio and sharpening our focus in
the Montney where we expect to grow liquids production to 50,000
barrels per day by the end of 2018," Doug Suttles, the company's
president and chief executive, said in a statement.
RBC Capital Markets advised Encana on the transaction, it
said.
($1 = 1.2808 Canadian dollars)