EnCana Closes First Phase of Natural Gas Storage Sale
EnCana Corporation and certain affiliates have closed the first phase of the sale of their natural gas storage business interests to the Carlyle/Riverstone Global Energy and Power Fund, an energy private equity fund managed by Riverstone Holdings LLC and The Carlyle Group. The initial phase of the sale includes EnCana's Alberta, Oklahoma and Louisiana storage assets, which generated proceeds of approximately US$1.3 billion. As previously announced, the second and final phase of the sale, involving the Wild Goose storage facility in California, is not expected to close until later this year because it requires approval of the California Public Utilities Commission (CPUC).
On March 6, 2006, EnCana announced that it agreed to sell substantially all of its natural gas storage business for approximately US$1.5 billion, subject to post-closing adjustments. An after-tax earnings gain of approximately US$835 million is expected on the total sale.
Gas storage interests being divested:
- AECO Hub
- Suffield facility, Alberta
- Countess facility, Alberta
- Wild Goose facility, California (sale closure expected later this year subject to CPUC approval)
- Salt Plains facility, Oklahoma
- Starks project, Louisiana
2006 divestitures generate US$3.3 billion
In 2006, EnCana expects to realize net proceeds, after cash taxes, of approximately $3.3 billion from four asset sales: gas storage business for about $1.5 billion (first phase closed), Ecuador assets for $1.42 billion (closed), the Chinook oil discovery offshore Brazil for about $350 million (closure expected mid year) and the Entrega Pipeline for $244 million (closed). The company plans to use those sales proceeds to purchase shares under its Normal Course Issuer Bid and pay down debt.
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