Encana Corporation announced today that it has reached an agreement with Ember Resources Inc. (Ember) to sell the majority of its Clearwater assets, located in southern and central Alberta, for approximately C$605 million, although much of the assets in the Drumheller area will remain in with Encana.
The sale includes about 1.2 million net acres of land and over 6,800 producing wells with second quarter average production of approximately 180 million cubic feet equivalent per day (mmcfe/d) of natural gas.
“This divestiture continues to advance our strategy. We are unlocking additional value from non-core dry gas assets as we focus on liquids rich growth areas. Our growth portfolio now includes the top two resource plays in Canada, the Montney and the Duvernay, and the top two resource plays in the United States, the Eagle Ford and, by year-end, the Permian Basin,” says Doug Suttles, Encana President & CEO. “Through this transaction, Ember is acquiring a high-quality asset along with a tremendously talented team.”
“This acquisition establishes Ember as the leading producer of coalbed methane in Canada,” says Doug Dafoe, Ember President & CEO. “This is an exciting time for our company and we look forward to working with the talented team that has made Encana successful in this area for so many years.”
Encana retains approximately 1.1 million net acres in Clearwater, including around 480,000 net acres along the eastern edge of the Horseshoe Canyon Fairway.
Encana operations will continue in the Rosebud, Rockyford, Standard area, as well as in Crossfield and on Siksika lands.
This sale is subject to the satisfaction of normal closing conditions and is expected to close in the first quarter of 2015.
Ember, together with its shareholder Brookfield Capital Partners, has recently through several acquisitions, consolidated a significant land and production base in the Horseshoe Canyon CBM fairway in Alberta. With this acquisition Ember will own interests in 2.2 million net acres of lands, with combined gross production of 290 mmcfe/d of natural gas. Coalbed methane production is characterized as a low-cost, long-life natural gas resource.
Encana is a leading North American energy producer that is focused on developing its strong portfolio of resource plays, held directly and indirectly through its subsidiaries, producing natural gas, oil and natural gas liquids (NGLs). By partnering with employees, community organizations and other businesses, Encana contributes to the strength and sustainability of the communities where it operates. Encana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.