Encana To Sell Nat Gas Assets To TPG Capital For $1.8B
March 31 (Reuters) - Encana Corp said it would sell some natural gas assets in Wyoming's Jonah field to a TPG Capital affiliate for about $1.8 billion, as it focuses on regions rich in oil and natural gas liquids.
Encana, which is in the middle of a restructuring launched by new Chief Executive Doug Suttles, is looking to cut production of low-value natural gas and boost liquids output by 30 percent in 2014.
"With the divestment of Jonah, we are unlocking value from a mature, high-quality asset and allowing our teams to focus on our five core growth areas and continue with execution of our new strategy," Suttles said in a statement on Monday.
Encana, Canada's largest natural gas producer, is focusing on five shale fields - Montney in British Columbia, Duvernay in Alberta, the DJ Basin in Colorado, the San Juan Basin in U.S. Southwest, and the Tuscaloosa Marine Shale in U.S. South.
The company has more than 1,500 active wells spanning over 24,000 acres in the Jonah field.
The assets had estimated proved reserves of 1,493 billion cubic feet equivalent at the end of 2013.
The sale, expected to close in the second quarter, includes over 100,000 undeveloped acres adjacent to the field.
Private equity firm TPG formed Maverick American Natural Gas in late 2011 to buy and run conventional natural gas-producing assets in North America.
Evercore and Davis Graham & Stubbs LLP advised Encana on the deal, while Vinson & Elkins LLP was TPG's adviser.
Encana's shares closed at C$23.70 on the Toronto Stock Exchange on Friday. The stock has risen nearly 24 percent this year.
(Reporting by Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty and Kirti Pandey)
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