Oct 8 (Reuters) - Encana Corp said it would sell some of its natural gas assets in southern and central Alberta for about C$605 million ($541 million) as it focuses on more lucrative oil and natural gas liquids.
The sale of a majority of the Clearwater assets to Ember Resources Inc includes about 1.2 million net acres of land and over 6,800 wells with average natural gas production of about 180 million cubic feet equivalent per day in the second quarter.
Encana, Canada’s largest natural gas producer, said it would retain about 1.1 million net acres in Clearwater, including around 480,000 net acres along the eastern edge of the Horseshoe Canyon Fairway.
This is Encana’s latest asset sale under Chief Executive Doug Suttles, who plans to transform the company into a major oil producer by concentrating spending on regions rich in high-value gas liquids and oil and selling off natural gas assets.
The Canadian company has said it expects to achieve 75 percent of operating cash flow from liquids production in 2015.
The Clearwater deal comes just days after Encana agreed to buy Athlon Energy Inc for $5.93 billion to gain control of its oil-rich lands in Texas’s Permian Basin.
Encana is now focusing on seven shale fields - Montney in British Columbia, Duvernay in Alberta, the Eagle Ford and the Permian Basin in Texas, the DJ Basin in Colorado, the San Juan Basin in the U.S. Southwest and the Tuscaloosa Marine Shale in southern United States.
Encana’s Toronto-listed shares, which have risen by a third in the past 12 months, closed at C$23.71 on Tuesday. ($1 = C$1.1180) (Reporting by Ashutosh Pandey in Bangalore; Editing by Savio D‘Souza and Saumyadeb Chakrabarty)