uploads///ECA Gordondale Areas of Operations

Encana’s Selling Its Gordondale Assets, But at What Price?

By

Jun. 24 2016, Published 6:10 p.m. ET

Encana’s Gordondale assets divestiture

On June 21, 2016, natural gas (UNG) producer Encana (ECA) announced an agreement to sell its Gordondale assets in northwestern Alberta to Birchcliff Energy. The key highlights of this divestiture include the following:

  • Encana will receive Canadian dollar 625 million in cash.
  • The sale includes ~54,200 net acres of land and associated infrastructure.
  • Encana will transfer the current and future midstream and downstream obligations, associated with Gordondale assets, to Birchcliff Energy. This will result in an additional saving of Canadian dollar 100 million for Encana.
  • The Gordondale assets sale is expected to close in the summer of 2016, pending customary closing conditions. The transaction will have an effective date of January 1, 2016.

Article continues below advertisement

Encana’s Gordondale assets

Encana’s Gordondale assets are located in the Montney resource play. Encana considers Montney as one of the core plays of the company along with Eagle Ford Shale and Permian Basin in the USA and Duvernay in Canada. Commenting on the Gordondale assets sale, Encana’s President and Chief Executive Officer, Doug Suttles, stated, “We are tightening our portfolio and sharpening our focus in the Montney where we expect to grow liquids production to 50,000 barrels per day by the end of 2018.”

To know more about Encana’s plans for Montney resource play, check out Market Realist’s “What Are Encana’s Plans for the Montney Resource Play?”

Other upstream players

Many upstream companies have recently completed divestitures to strengthen their balance sheets. Last week, Devon Energy (DVN) sold its Midland assets for ~$858 million. Southwestern Energy (SWN) and Chesapeake Energy (CHK) also recently completed divestitures in order to increase its liquidity.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.