EnCana to Sell Conventional O&G Properties for C$404 Million
EnCana has reached agreement to sell conventional oil and gas assets producing approximately 6,400 barrels of oil equivalent per day, after royalties, (6,750 barrels of oil equivalent per day before royalties) to StarPoint Energy Trust for approximately C$404 million (US$326 million) before adjustments. The transaction, which is expected to close on or about June 30, 2005, includes properties in central and southern Alberta. Production from the assets is about 86 percent oil and natural gas liquids. All dollar figures are U.S. dollars unless otherwise noted.
Since the start of 2004 and including this divestiture, EnCana has divested of approximately 84,000 barrels of oil equivalent per day of conventional production, generating proceeds of about $6 billion. This planned sale to StarPoint is EnCana's third substantial divestiture of Western Canadian conventional oil and gas assets in the past year and it is part of EnCana's planned disposition of 20,000, plus or minus, barrels of oil equivalent per day of Canadian conventional assets in 2005.
"Together with the 2004 sale of our U.K. North Sea assets and our recent agreement for the $2 billion sale of our Gulf of Mexico interests, EnCana is continuing to sharpen its focus on long-life North America resource plays where we expect to achieve reliable, profitable growth in reserves and production from unconventional gas and oil reservoirs," said Gwyn Morgan, EnCana's President & Chief Executive Officer.
The planned sale to StarPoint has an effective date of May 1, 2005 and is
subject to typical closing adjustments. EnCana plans to use the proceeds to
pay down debt and purchase shares pursuant to the company's Normal Course
Issuer Bid program. Waterous & Co. served as an advisor to EnCana on this
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