Shale gas deal in Canada dissolves

June 23, 2011 at 5:52 AM

CALGARY, Alberta, June 23 (UPI) -- Calgary energy company Encana said it wasn't able to reach an agreement with PetroChina on the Cutbank Ridge shale gas play in Canada after nearly a year.

Encana in February said it would sell a 50 percent share in Cutbank Ridge assets in western Canada to PetroChina for $5.4 billion.

The shale gas play is estimated to hold around 1 trillion cubic feet of natural gas. Encana had said it would boost production there at a rate of around 14 percent per year but scaled that back to 10 percent after releasing first quarter financial results in April.

"After close to a year of exclusive negotiations with PetroChina, we were unable to reach alignment on the planned transaction," Encana Chief Executive Officer Randy Eresman said in a statement.

Sources close to the deal told the Platts news service the Chinese were disappointed with Encana's forecasts on production targets through 2015.

PetroChina has said the collapse of the Encana deal wouldn't sway it from investing in unconventional natural resources like shale in North America, however.

The company said it aims to produce close to 1.5 million barrels of oil equivalent from projects overseas by 2015.

Like Us on Facebook for more stories from UPI.com  
Latest Headlines
Top Stories
Ford recalls 432,000 North American vehicles over software bug
Compact cannon for British armored vehicles
New Zealand military receives medium heavy military trucks
Volvo unveils new child seat concept
BBC to lay off 1,000 people to make up for $234M in lost revenue