Exclusive: Encana seeks partner for several gas liquids plays

Thu Mar 29, 2012 6:45pm EDT
 
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By Luke Pachymuthu

SINGAPORE (Reuters) - Encana Corp ECA.TO is launching a formal search for a partner to help develop a number of properties in the United States and Canada with potential for lucrative oil and liquids-rich natural gas, as the company struggles with chronically depressed prices for dry gas, its chief executive said on Thursday.

Encana -- Canada's largest natural gas producer and one of the biggest in North America -- is looking for a single partner for a package of assets that could include positions in the Collingwood shale, the Tuscaloosa Marine shale, the Mississippi Lime and the Eaglebine shale in the United States, CEO Randy Eresman told Reuters at a conference in Singapore.

All have natural gas liquids or oil potential and are in the early stages of exploration and development.

"One of the things we have been trying to do is to get more liquids, particularly oil, in our portfolio," Eresman said. "But because of the high initial cost on that, we think it might be best to reduce our risk so to accelerate that point of commercialization by bringing in another party."

Eresman compared the possible partnership with Devon Energy Corp's DVN.N recent deal with China's Sinopec 0386.HK, in which the U.S. energy company gave up a third of its interest in five developing fields for $2.2 billion.

He said the process could launch "in the next weeks to a month."

The company's position in Canada's Duvernay shale, an early stage gas liquids prospect in Alberta, may also be part of the offering, he said.

"We are not really sure if there is an appetite in the financial marketplace for cross-border deals, or (if) there would be separate kinds of transactions ... but in either case we are open to discussions on both of them," Eresman said.   Continued...

 
Randy Eresman, president and CEO of Encana, addresses shareholders at the company's annual general meeting in Calgary, Alberta, April 20, 2011. REUTERS/Todd Korol