Encana to sell Haynesville gas assets for $850 millionStaff writer ▼ | August 25, 2015
Encana Corporation's wholly-owned subsidiary, Encana Oil & Gas (USA) has reached an agreement to sell its Haynesville natural gas assets in northern Louisiana, to GEP Haynesville, a joint venture formed by GeoSouthern Haynesville and funds managed by GSO Capital Partners.
Selling Encana will reduce its gathering and midstream commitments
In addition, through the transfer of current and future obligations, Encana will reduce its gathering and midstream commitments, which will be substantially complete through 2020, by approximately $480 million on an undiscounted basis.
Further, Encana will transport and market GeoSouthern's Haynesville production on a fee for service basis for the next five years.
Encana will use the total cash consideration to reduce its net debt, further strengthening its balance sheet.
Consistent with its strategy, Encana remains focused on growing high margin production.
More than 80 percent of 2015 capital will be invested in the company's four most strategic assets in the Permian, Eagle Ford, Duvernay and Montney.
During the first half of 2015, Encana's Haynesville assets produced an average 217 mmcf/d, contributed approximately 9 percent to companywide production and less than 2.5 percent to Encana's first half operating cash flow, excluding hedges. ■