| Encana to Sell Denver Julesburg Basin Properties for $900M | |
| | |
|
Encana Oil & Gas (USA) Inc, the wholly owned affiliate of upstream energy firm Encana Corporation ECA, has entered into a deal to divest its oil and gas resources in Denver Julesburg Basin for a total consideration of $900 million. These assets, located in Colorado, will be sold to a new joint venture, in which 95% is held by the Canada Pension Plan Investment Board. The remaining 5% is owned by The Broe Group, a private-equity firm in Denver.
Following the news, Encana rose more than 6% on NYSE.
The oil and gas properties to be sold cover roughly 51,000 net acres in the DJ Basin. During the first half of 2015, the assets’ daily production was 14,800 barrels of liquids and 52 million cubic feet of natural gas.
Encana added that the proceeds from the divestment will primarily be utilized for strengthening its balance sheet mainly by reducing debt. It is to be noted that including the prior asset sale, $2.7 billion has come to the company’s pocket from the divestiture program this year. Most importantly, by the end of 2015, Encana is now anticipating to lower its net debt by roughly $3 billion.
Investors should note that the Colorado asset divestment is in line with management’s plan of streamlining its portfolio. Encana is now focusing on its four strategic assets that include Texas-based, oil-rich Eagle Ford and Permian shale basins and Western Canada-located natural gas liquids rich Duvernay and Montney basins.
Encana has one of the largest natural gas resource portfolios in North America. The company provides a diverse and high quality inventory of reserves. However, being a firm in the upstream industry, its financials are affected by the weakness in commodity prices.
Currently, Encana carries a Zacks Rank #3 (Hold).
Meanwhile, some better-ranked players in the energy sector are Matrix Service Company MTRX, Rice Midstream Partners LP Comm RMP and Northern Tier Energy LP NTI. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MATRIX SERVICE (MTRX): Free Stock Analysis Report ENCANA CORP (ECA): Free Stock Analysis Report NORTHERN TIER (NTI): Free Stock Analysis Report RICE MIDSTREAM (RMP): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
|
|
|
Encana Corporation
|
|
EXPLORATION STAGE |
CODE : ECA.TO |
ISIN : CA2925051047 |
|
| |
ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Encana is a oil and natural gas producing company based in Canada. Encana holds various exploration projects in Canada. Its main exploration property is BUFFALO HILLS in Canada. Encana is listed in Canada and in Germany. Its market capitalisation is CA$ 4.8 billions as of today (US$ 3.7 billions, € 3.3 billions). Its stock quote reached its highest recent level on November 23, 2018 at CA$ 9.99, and its lowest recent point on January 24, 2020 at CA$ 4.96. Encana has 973 120 000 shares outstanding. |