Encana's wholly owned subsidiary, Encana Oil & Gas (USA) Inc., has completed the announced acquisition of approximately 45,500 net acres located in Karnes, Wilson and Atascosa counties of south Texas from Freeport-McMoRan.
Situated in the core of the prolific Eagle Ford shale, the acreage produced approximately 53,000 barrels of oil equivalent per day (boe/d) in the first quarter of 2014 and has an estimated drilling inventory of more than 400 locations. The deal, which Encana anticipates will be accretive to 2014 cash flow, approximately doubles the Company's current oil production and significantly enhances its continuing efforts to reposition to a more balanced commodity portfolio. This transaction has an effective date of April 1, 2014.
"This acquisition fully aligns with the strategy we announced last November; it will significantly boost our oil and liquids output, improve cash flow and enhance our portfolio of world class resource plays," says Doug Suttles, Encana President & CEO.
Encana Oil & Gas (USA) Inc. has also closed on the majority of the previously announced sale of certain properties located primarily in Leon and Robertson counties of East Texas, having received approximately $427 million of the total anticipated purchase price of approximately $530 million. The Company expects to close the balance of the transaction in the third quarter of 2014.
Encana plans to update its 2014 guidance, which will consider the impact of all completed transactions to date, in conjunction with the announcement of its second quarter earnings on July 24, 2014.
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