Encana to buy Athlon EnergyStaff writer ▼ | September 30, 2014
Encana Corporation will acquire all of the issued and outstanding shares of common stock of Athlon Energy by means of an all-cash tender offer for $5.93 billion ($58.50 per share).
Acquisition $5.93 billion worth transaction
The acquisition will add Athlon's land position of approximately 140,000 net acres focused solely in the heart of the oil-rich Midland Basin to Encana's portfolio, giving the company a seventh growth area.
Encana expects that the transaction will add current production of about 30,000 barrels of oil equivalent per day (boe/d) based on Athlon's current estimated production including recent acquisitions. Encana sees the potential for approximately 5,000 horizontal well locations with potential recoverable resource of approximately 3 billion barrels of oil equivalent.
In 2015, Encana intends to invest at least $1 billion of capital in the play and ramp up from three to at least seven horizontal rigs by year-end 2015. The Permian will play an important part within Encana's growth portfolio, contributing significantly to company-wide projected total liquids production of around 250,000 barrels per day (bbls/d) by 2017.
Following this oil-rich acquisition, Encana now expects to achieve its initial 2017 target to reach 75 percent of operating cash flow from liquids production in 2015, marking a major strategic milestone. In the past year, the company has significantly realigned its portfolio through divestitures of natural gas-weighted assets and the acquisition and development of higher-margin oil and natural gas liquids (NGLs) opportunities. ■