Recently, EnCana reached agreement to sell New Mexico assets, representing production of about 3,900 barrels of oil equivalent, after royalties, to Magnum Hunter Resources, Inc. for approximately US$243 million. In addition, EnCana reached agreement to sell Sauer Drilling Company of Casper, Wyoming to Unit Corporation for US$37 million. These assets, which were part of Tom Brown, were deemed to be non-core to EnCana. Both deals are expected to close by July 30, 2004.
Total proceeds from these three divestitures are anticipated to be about US$675 million.
When EnCana announced its acquisition of Tom Brown in April, it also announced that it planned to sell between 40,000 and 60,000 barrels of oil equivalent of daily production, which is expected to generate between US$1 billion and US$1.5 billion. The divestitures announced to date are part of a first tranche that includes additional sales currently under negotiation with prospective buyers. A second tranche of divestitures, representing another 15,000 to 35,000 barrels of oil equivalent of daily production, is being assembled and is expected to be marketed over the course of the next year.
The sale of assets to Harvest is subject to typical post-closing adjustments. Tristone Capital Inc. served as a financial advisor to EnCana on this transaction.
Most Popular Articles