FORT ST. JOHN, B.C. – Encana Corporation announced today that it has sold its Gordondale assets in northwestern Alberta to Birchcliff Energy Ltd for a total of C$625 million.
54,200 net acres of land and associated infrastructure were sold as part of the deal.
Encana also says that through current and future obligations, they are reducing midstream as well as downstream commitments by more than C$100 million. They also said no drilling was to take place and no completions capital was spent in 2016.
After the sale is complete, Encana’s Montney assets will have over 9,000 potential drilling locations with two thirds of those drilling locations in the condensate-rich part of the play.
President and CEO Doug Suttles says the company is shifting focus to other areas that could be of benefit.
“We are tightening our portfolio and sharpening our focus in the Montney where we expect to grow liquids production to 50,000 barrels per day by the end of 2018. This transaction further strengthens our balance sheet and gives us greater financial flexibility as we look to the future.”
The Gordondale assets produced around 25,200 barrels of oil a day.
The sale of the assets will go through once normal closing details have been worked out. There will also be regulatory approvals and post-closing conditions.
The deal is expected to close this summer and the effective date will be January 1st 2016.