[Context: On July 8, Encana (NYSE, TSX: ECA) disclosed selling its Arkoma Basin assets for $165 million in cash. Multiple private equity-backed players operate in the Arkoma. The buyer was unidentified but paid ~$1,110 per acre or $2,100 per flowing Mcfe. Further details, advisors and related links are below.]
Encana Signs Agreement to Sell its Arkoma Basin Natural Gas Assets
CALGARY, July 8, 2019 /CNW/ – Encana Corporation (NYSE, TSX: ECA) today announced that its wholly owned subsidiary, Newfield Exploration Mid-Continent Inc., signed an agreement to sell its natural gas assets in Oklahoma’s Arkoma Basin to an undisclosed buyer. Total cash consideration to Encana under the transaction is $165 million. The agreement is subject to ordinary closing conditions, regulatory approvals and other adjustments and is expected to close in the third quarter of 2019.
“Along with our recently announced agreement to exit China, this transaction shows our commitment to realize value from non-core assets. Proceeds from this sale will be directed to our balance sheet,” said Doug Suttles, Encana President & CEO.
Encana’s Arkoma assets include approximately 140,000 net acres of leasehold and current production of approximately 77 million cubic feet equivalent per day (98% natural gas).
CIBC Griffis & Small provided advisory services to Encana for the transaction. Davis, Graham & Stubbs LLP served as Encana’s external legal counsel.