EnCana pulling out of Alaska

Alaska joins Gulf of Mexico, Ecuador and UK on the chopping block as independent prepares to put its North Slope oil and gas properties up for sale

Kay Cashman

Petroleum News Publisher & Managing Editor

In a move that EnCana Chief Executive Officer Gwyn Morgan recently referred to as going “back to our roots” the Calgary independent has added its Alaska properties to the list of worldwide conventional oil and gas assets it’s selling in order to focus attention on what Morgan says EnCana does best – develop and produce unconventional oil and gas assets in North America.

EnCana, which first entered Alaska in 2000 as Alberta Energy, is just beginning the process of preparing for the sale of its Alaska acreage, Paul Myers told Petroleum News in mid-December.

Myers, who is EnCana’s vice president for the Gulf of Mexico and Alaska, was interviewed by PN in late October when the company dropped its leases in the National Petroleum Reserve-Alaska. At that time Myers said there was “one area” in Alaska that EnCana was “most interested in,” and the NPR-A leases weren’t in it, he said, declining to identify the area.

On Dec. 13 Myers said the “OCS has been our main focus in Alaska. It’s the area we picked and have been working on evaluating prospects from G&G to get them drilled. … The majority of our technical work has been in the OCS.”

The U.S. Minerals Management Service said EnCana has 24 leases on Alaska’s Outer Continental Shelf, encompassing some 52,265 acres in the Beaufort Sea.

“We also have a significant presence in the (Brooks Range) Foothills. … We were sitting and waiting on gas line issues to be resolved,” Myers said, the biggest issue being timing and the second access for explorers.

However, Myers said the North Slope natural gas pipeline issues had nothing to do with EnCana’s decision to pull out of Alaska.

“We were quite keen on the OCS. It’s just that EnCana’s focus is not going to be on that type of play,” he said.

In a Dec. 10 interview Tom Homza, a geologist and manager of EnCana’s Alaska office, said the company believes Alaska has huge conventional oil and gas resource potential. “We appreciate all that the state and MMS and other companies have done for us while we have been here.”

As a result of its strategic focusing EnCana has sold its UK assets and announced similar intentions for Ecuador and the Gulf of Mexico.

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2004

• Nov. 21 EnCana looks to rein in growth

• Nov. 7 EnCana gets a makeover

• Oct. 31 EnCana surrenders its five NPR-A leases

2003

• Sept. 28 MMS sale draws $10M

• Aug. 17 ‘Tis the season for drilling

• June 15 McCovey unit set to expire

• May 18 North Slope winter work completed

• May 11 Picking up pieces

• May 4 EnCana, Lynx Enterprises receive MMS awards

• March 16 It’s a bust: ConocoPhillips takes dry hole costs for McCovey

• March 2 Alaska remains EnCana priority

• Feb. 16 EnCana plugs, abandons McCovey

• Jan. 26 EnCana to file second season exploration plan for McCovey

2002

• Nov. 3 Bidders appear to be filling in around the edges at Oct. 24 state lease sales

• Oct. 27 State takes in $2.7 million at North Slope, Beaufort Sea lease sales

• Sept. 1 Phillips, EnCana take opposite sides on gas pipeline issues

• Aug. 25 Winter work to include new pads for Phillips, infield drilling for BP

• Aug. 4 The SDC makes 600 mile journey to McCovey prospect in 12 days

• June 16 NPR-A lease sale allows exploration momentum to continue westward

• June 9 Bidding to win

• May 26 Foothills gets thumbs up

• May 5 North Slope Foothills bidders set record for acres leased in state sale

• March 3 AEC investing $32M in Alaska in 2002

• Feb. 24 Alberta Energy boss refuses to play winners and losers in EnCana deal