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 the capture and development of long-life North American natural gas and in-situ oilsands resource plays.
EnCana's natural gas storage business is located in key gas producing and consuming regions and is linked to major North American gas transmission pipelines. EnCana Gas Storage has approximately 174 billion cubic feet (Bcf) of working gas capacity at five facilities in Alberta, California and Oklahoma. EnCana will retain the Hythe (10 Bcf) gas storage facility in northwest Alberta for its own use as this facility is integrated with EnCana's upstream operations.
Gas storage interests being divested: - AECO Hub - Suffield facility (85 Bcf), Alberta - Countess facility (40 Bcf), Alberta - Wild Goose facility (24 Bcf), California - Salt Plains facility (15 Bcf), Oklahoma - Starks facility (27 Bcf in development), Louisiana
RBC Capital Markets and UBS served as advisors to EnCana on this transaction.
In addition to the gas storage divestiture, EnCana is in the process of concluding the $350 million sale of the Chinook oil discovery offshore Brazil to Hydro. It has also sold its Entrega Pipeline in Colorado to Kinder Morgan Energy Partners L.P. and Sempra Pipelines & Storage for approximately $240 million. Including EnCana's recent $1.42 billion sale of its Ecuador interests, EnCana expects to realize net proceeds, after cash taxes, of approximately $3.3 billion from these four asset sales. The company plans to use these proceeds to pay down debt and purchase shares under its Normal Course Issuer Bid.
With an enterprise value of approximately US$45 billion, EnCana is one of North America's leading natural gas producers, is among the largest holders of gas and oil resource lands onshore North America and is a technical and cost leader in the in-situ recovery of oilsands bitumen. EnCana delivers predictable, reliable, profitable growth from its portfolio of long- life resource plays situated in Canada and the United States. Contained in unconventional reservoirs, resource plays are large contiguous accumulations of hydrocarbons, located in thick or areally extensive deposits, that typically have lower geological and commercial development risk, lower average decline rates and very long producing lives compared to conventional plays. The application of technology to unlock the huge resource potential of these plays typically results in continuous increases in production and reserves and decreases in costs over multiple decades of resource play life.
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