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.
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?”