EnCana Moves Ahead with Conventional Asset Sales

EnCana is providing an update on its planned divestiture of conventional oil and gas assets in Western Canada, the Gulf of Mexico, Ecuador and some natural gas gathering and processing facilities in the U.S. Rocky Mountain states.

"These divestiture plans are consistent with EnCana's sharpened focus on our North American resource play holdings in Western Canada, the U.S. Rocky Mountain states and Texas. Last year we divested of conventional properties with production of about 76,000 barrels of oil equivalent per day for total proceeds of approximately US$3.5 billion. Our remaining conventional oil and gas properties are attracting substantial interest from potential buyers," said Gwyn Morgan, EnCana's President & Chief Executive Officer. "The sale of these conventional assets is expected to further strengthen our position as the industry leader in North American natural gas and in-situ oilsands resource plays."

Western Canadian non-core property divestitures on track
EnCana has retained Waterous & Co. to coordinate the divestiture of 15 conventional properties primarily located in central and southern Alberta. Collectively, the properties produce approximately 17,700 barrels per day of oil and natural gas liquids and about 27 million cubic feet per day of natural gas for a total of about 22,000 barrels of oil equivalent per day. Bids are due February 8, 2005. Inquiries on these properties can be directed to Waterous & Co.

Gulf of Mexico offshore discoveries and exploration prospects for sale
EnCana has retained Morgan Stanley and Randall & Dewey to coordinate the divestiture of its Gulf of Mexico assets. EnCana is divesting of an average 40 percent working interest in 239 gross blocks comprising about 1.4 million acres. Included is a 25 percent working interest in the ChevronTexaco operated Tahiti discovery, one of the largest discoveries in the deepwater Gulf of Mexico to date. Recently completed production tests of the Tahiti discovery well produced at a restricted rate of 15,000 barrels per day; rate and pressure analysis indicate that the well is capable of sustained flow of as much as 30,000 barrels per day. Also included are five other significant non-operated discoveries currently under appraisal - Tonga, Jack, St. Malo, Sturgis and Sawtooth - plus a large inventory of exploration prospects. Offers are expected in April.

Ecuador producing about 78,000 barrels of oil per day from five blocks
EnCana has retained Harrison Lovegrove & Co. Limited to coordinate the divestiture of its Ecuador assets which include interests in five Oriente Basin blocks plus an interest in the OCP Pipeline. EnCana's Ecuador assets are producing about 78,000 barrels of oil per day. At year-end 2003, proved reserves were about 162 million barrels. The interests include:

  • 100 percent interest in Tarapoa Block, production: about 42,000 barrels of oil per day

  • 40 percent economic interest in Block 15, production: about 31,000 barrels of oil per day

  • Interests in Block 14 (75 percent), Block 17 (70 percent) and Shiripuno Block (100 percent), production from three blocks: about 5,000 barrels of oil per day

  • 36.3 percent interest in OCP Pipeline, about 500 kilometers in length, capacity of about 450,000 barrels of oil per day

    USA gathering and processing assets
    In addition, EnCana Corporation subsidiary EnCana Oil & Gas (USA) Inc. plans to sell three natural gas gathering and processing properties in the Rocky Mountain states - Fort Lupton and Dragon Trail in Colorado, Lisbon in Utah. The gas plants have a total processing capacity of 210 million cubic feet per day and each one has extensive gas gathering pipelines.

    The Fort Lupton plant, located in the Wattenberg Field about 20 miles northeast of Denver, processes up to 90 million cubic feet of gas per day. The Dragon Trail plant, located in the Piceance Basin in northwest Colorado, processes about 60 million cubic feet of gas per day. The Lisbon facility, located in western Paradox Basin, Utah, has processing capacity of 60 million cubic feet of gas per day.