Encana Corp.’s US subsidiary will divest its Fort Worth basin Barnett shale producing and midstream assets by early 2012.
The assets have strong potential for future development, the company said. They produced 125 MMcfd of gas equivalent and include processing and pipeline facilities on 52,000 net acres in the basin. The company has begun to position itself to take more advantage of higher-value liquids plays (OGJ Online, June 2, 2011).
Encana said the Barnett shale, which it entered through a corporate acquisition in 2004, provided the company with foundational knowledge it has applied across its newer US and Canadian resource plays. The knowledge will continue to provide the company with operating expertise, said Jeff Wojahn, executive vice-president of Encana and president of its USA Division.
“Alongside developing this strong asset, over the years we built a suite of high-growth, early-life resource plays in the Midcontinent, led by about 295,000 net acres of land in the Haynesville shale play, where our production is now more than 500 MMcfe/d. In East Texas, our production is about 250 MMcfe/d and our 240,000 net acres hold strong growth potential. Our Mid-Continent resource play teams and operations, based in Dallas, will continue to be a leading contributor to Encana’s long-term growth strategy,” Wojahn said.
A sale of Encana’s North Texas assets would be subject to receiving an acceptable bid, the approval of the companies’ boards of directors, normal closing conditions as well as regulatory approvals.
Encana is divesting assets and expects to bring in a net $1-2 billion in 2011. The company and several parties are engaged in a competitive process to divest of midstream and producing assets in the US and Canada that no longer fit with its development plans. Encana is also in talks with potential partners looking to make third-party investments aimed at accelerating the value recognition of the enormous resource potential on Encana’s undeveloped lands.
Encana has about 7 million net acres of undeveloped land in North America that holds a 30-year supply of gas at the 2010 production rate based on an independent assessment.