CALGARY – Encana Corp. has reached a deal to sell natural gas properties in Wyoming to a private equity firm for US$1.8-billion, as the Canadian company looks to pare down its portfolio.
The deal Monday with TPG Capital involves about 1,500 active wells in the Jonah field in Wyoming’s Sublette County over some 9,700 hectares. The lands have proved reserves equivalent to about 1.5 billion cubic feet of natural gas.
CEO Doug Suttles, who took the helm of Encana last June, said the sale fits the company’s new strategy.
“With the divestment of Jonah, we are unlocking value from a mature, high-quality asset and allowing our teams to focus on our five core growth areas and continue with execution of our new strategy,” he said in a statement.
Suttles has said he aims to make Encana a smaller, but more profitable and better focused, company.
Instead of investing in dozens of projects North America, Encana is now focused on five core areas: the Montney and Duvernay formations in Western Canada, the DJ Basin in Colorado, the San Juan Basin in New Mexico and the Tuscaloosa Marine Shale in Mississippi and Louisiana.
The strategic overhaul announced last year also saw Encana cut 20 per cent of its workforce.
Encana’s current employees in Wyoming are expected to stay on with TPG Capital, which has offices around the world.
TPG expects to continue investing in the Jonah field and nearby acreage.
“We look forward to working with the talented Encana team that has made Jonah a successful operation for many years,” says Craig Manaugh, president and chief operating officer of TPG’s newly formed oil and gas business.
“We are also pleased to announce that we will be maintaining the Jonah field office near Pinedale, Wyoming and opening a Denver office as a result of the transaction.”
The proposed deal requires regulatory approvals and is expected to close in the second quarter.