The sale of this non-core asset is part of EnCana's previously announced divestiture program. The company continues to focus on its industry-leading position in long-life North American natural gas and oilsands resource plays. Proceeds from the sale are expected to be directed to debt reduction and potentially the continuation of EnCana's share purchase program pursuant to EnCana's Normal Course Issuer Bid.
Natural Gas Liquids interests being divested: - Four NGL plants at Empress, Alberta - 60 percent interest in the EnCana Empress Plant - 33 percent interest in the BP E1 Plant - 8.333 percent interest in the Conoco Empress Plant - 12.4325 percent interest in the ATCO Plant - 100 percent interest in the EnCana Debutanizer - 50 percent interest in the Kerrobert Pipeline and Storage Facility - 18.267 percent interest in the Superior Storage Facility and the Depropanizer - Various percent interests in Sarnia fractionation and storage facilities - 49 percent interest in Marysville Underground Storage Terminal - 100 percent interest in Kinetic Resources, a marketer of natural gas liquids
EnCana will retain a 10 percent interest in the EnCana Empress Plant but has a put option to sell that interest to Provident for an additional amount of approximately US$12.6 million (C$15 million).
EnCana has also agreed to provide up to US$63 million (C$75 million) in support, via a gas sales contract, in the event that the commodity price relationship impacting the NGL business (frac spread) drops below historic averages over the next two-year period. EnCana has the opportunity to recover any support drawn over that two-year period plus one additional year.
TD Securities Inc. served as an advisor to EnCana on this transaction.
EnCana is continuing with the previously announced divestiture of its natural gas storage business in North America which is expected to be completed over the next six months.
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