Canadian energy company Encana says it sold off some of its holdings in Alberta for cash considerations. Photo courtesy of Encana Corp.
CALGARY, Alberta, June 22 (UPI) -- The sale of more than 50,000 acres of land in the resource-rich northern parts of Alberta is part of an effort to streamline the portfolio of Encana Corp., the company said.
Encana said it reached a deal to sell 54,200 acres of land, as well as the associated infrastructure, in the Gordondale area of northwestern Alberta for about $490 million in cash. As no drilling was planned for the area this year, the company said the sale was in line with a strategy to make its holdings more efficient.
"This transaction further strengthens our balance sheet and gives us greater financial flexibility as we look to the future," Encana President and CEO Doug Suttles said in a statement.
The company estimates the area in question holds an estimated 50 million barrels of oil equivalent.
The company entered 2016 by saying it was revising its spending plan for the year in order to strengthen its balance sheet with minor impacts on production. "Virtually all" of the spending would focus on its North American shale portfolio.
From the Permian and Eagle Ford shale basins in the United States, and the Duvernay and Montney plays in Canada, the company said the spending plan will have a minimal impact on full-year 2016 output. The company said it expects to produce between 340,000 and 360,000 barrels of oil equivalent per day this year.
"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," Suttles said.
For Birchcliff Energy, which purchased the Gordondale assets from Encana, the deal is transformational.
"The acquisition further strengthens Birchcliff's business model and creates one of the largest concentrations of high quality, low-cost production in the area," it said in a statement.
