Canada's Encana to buy Athlon Energy for $5.93 billion
(Reuters) - Encana Corp, Canada's largest natural gas producer, said it would buy Athlon Energy Inc for $5.93 billion in cash, excluding debt, as it accelerates its plan to focus on more-lucrative oil and natural-gas liquids (NGLs).
The deal, which includes about 140,000 net acres owned by Athlon in the oil-rich Permian Basin in Texas, adds another core region to the six shale fields where Encana is concentrating its spending.
With the deal, Encana said it now expected to achieve 75 percent of operating cash flow from liquids production in 2015, two years ahead of its earlier projection.
Athlon, based in Fort Worth, Texas, produces about 30,000 barrels of oil equivalent per day (ob/ed).
The Canadian company will also assume Athlon $1.15 billion of senior notes.
The offer price of $58.50 per share represents a premium of 25 percent to Athlon Energy's closing price on Friday.
Athlon shares were trading just below the offer price at $58 before the opening bell. Encana New York-listed shares were untraced.
Encana shares, which have risen 32 percent in the past year, closed at C$23.59 on the Toronto Stock Exchange on Friday.
Up to Friday's close, Athlon shares had risen 48 percent this year.
(Reporting by Ashutosh Pandey in Bangalore; Editing by Simon Jennings and Ted Kerr)
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