Randy Eresman, president and CEO of Encana.TODD KOROL/Reuters
Major natural gas producer Encana Corp. has reached an agreement to sell its North Texas natural gas properties for about $975-million (U.S.).
The Calgary-based company says it has struck a deal through its U.S subsidiary to transfer the assets to partnerships managed by EnerVest Ltd. of Houston, Tex.
Encana says proceeds from the transaction will help strengthen its balance sheet and provide financial flexibility going into 2012.
The transaction is expected to close before the end of the year, pending certain approvals.
Since it spun off its oil assets into Cenovus Energy Inc. two years ago, Encana has been focused exclusively on developing natural gas. Its pure-play status has made the current period of low natural gas prices particularly challenging.
The company expects that by year's end it will have divested about $1.7-billion of assets, which puts it within Encana's targets.
"As we look to 2012, we continue to focus on our highest return projects and we plan to direct a greater portion of our capital investment to grow our oil and natural gas liquids production," Encana president and chief executive officer Randy Eresman said.
"The sale of this North Texas asset in the Barnett Shale is part of Encana's ongoing portfolio optimization aimed at enhancing the long-term value of the company's vast resource potential," Mr. Eresman said in a release.
Encana said the North Texas assets produce the equivalent of about 125 million cubic feet of gas per day, and the transaction will include related pipelines that run about 50,000 net acres of land in the Fort Worth Basin.