Encana's wholly owned subsidiary, Encana Oil & Gas (USA) Inc., has completed the previously announced acquisition of approximately 45 500 net acres located in Karnes, Wilson and Atascosa counties of south Texas from Freeport-McMoRan.
Situated in the core of the prolific Eagle Ford shale, the acreage produced approximately 53 000 bbls of oil equivalent per day in Q1 of 2014 and has an estimated drilling inventory of more than 400 locations. The deal, which Encana anticipates will be accretive to 2014 cash flow, approximately doubles the Company's current oil production and significantly enhances its continuing efforts to reposition to a more balanced commodity portfolio. This transaction has an effective date of 1 April, 2014.
"This acquisition fully aligns with the strategy we announced last November; it will significantly boost our oil and liquids output, improve cash flow and enhance our portfolio of world class resource plays," says Doug Suttles, Encana President & Chief Executive Officer.
Encana Oil & Gas (USA) Inc. has also closed on the majority of the previously announced sale of certain properties located primarily in Leon and Robertson counties of East Texas, having received approximately US$ 427 million of the total anticipated purchase price of approximately US$ 530 million. The company expects to close the balance of the transaction in Q3 of 2014.
Encana plans to update its 2014 guidance, which will consider the impact of all completed transactions to date, in conjunction with the announcement of its second quarter earnings on 24 July, 2014.
Encana Corporation Encana is a leading North American energy producer that is focused on growing its strong portfolio of diverse resource plays, held directly and indirectly through its subsidiaries, producing natural gas, oil and natural gas liquids. By partnering with employees, community organisations and other businesses, Encana contributes to the strength and sustainability of the communities where it operates. Encana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.
Adapted from press release by Hannah Priestley-Eaton
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