Encana Corp to sell North Texas gas assets to EnerVest for $975 million

Encana Corp, one of the world's largest natural gas producers today said that it would sell its North Texas natural gas producing properties to partnerships managed by EnerVest Ltd, for approximately $975 million.

The sale of this asset, plus other non-core asset sales, Calgary, Alberta-based Encana expects to have net divestitures of about $1.7 billion by year-end, which is well within the company's 2011 target of between $1 billion and $2 billion.

The North Texas assets in the Barnett Shale currently produce about 125 million cubic feet of natural gas equivalent per day (MMcfe/d) and include the related gathering pipelines on about 50,000 net acres of land in the Fort Worth Basin.

Encana had planned to sell between $1 billion and $2 billion of non-core assets to cut on spending due to low natural gas prices in the US and focus on high return projects.

It recently completed the sale of a portion of its Piceance Basin midstream assets for around $590 million.

It also plans to allot a greater portion of money to grow its oil and natural gas liquids production from the more than 2 million net acres that it holds on liquids-rich lands across North America.

Encana said proceeds from the sale of the North Texas assets are expected to supplement its cash flow generation, strengthen its balance sheet and provide more financial flexibility.