Encana to sell DJ basin assets for $900 million

CALGARY, Alberta -- Encana’s wholly owned subsidiary, Encana Oil & Gas (USA), has reached an agreement to sell its Denver Julesburg (DJ) basin assets in Colorado to a new entity 95% owned by Canada Pension Plan Investment Board and 5% by The Broe Group. The total consideration to Encana under the transaction is about $900 million.

The transaction includes all of Encana's DJ basin acreage comprising 51,000 net acres. During the first half of 2015, Encana's DJ basin assets produced an average of 52 MMcfgd and 14,800 bpd of crude oil and NGLs. Based on Encana's development plan at year-end 2014, estimated proved reserves were 96.8 MMboe (over 40% natural gas).

The sale of Encana's DJ basin assets is expected to close in the fourth quarter of 2015, with an effective date of April 1, 2015.

"As we advance our strategy, we continue to focus our portfolio and capital on our four most strategic assets, the Permian, Eagle Ford, Duvernay and Montney," said Doug Suttles, Encana president and CEO. "Our efforts to transform our portfolio, improve efficiency and grow margins are increasing returns and strengthening our balance sheet, positioning Encana for success throughout the commodity cycle."