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EnCana raises $894 million from sales; more to come after Tom Brown takeover
Gary Park Petroleum News Calgary correspondent
EnCana has now locked up US$894 million in asset sales on its way over the next year to as much as US$1.5 billion.
It added Harvest Energy Trust to its list of buyers July 15 as the expansion-minded trust forked over US$395 billion for 19,000 barrels of oil equivalent per day, the bulk of it coming from medium and heavy crude in east central Alberta.
On July 20, it completed another US$219 million agreement, selling conventional natural gas assets producing 7,250 boe per day after royalties to a Calgary-based producer it did not identify.
The transaction covers gas properties in northeastern Alberta with proved reserves estimated at 66 billion cubic feet.
Paramount Energy Trust followed that release by announcing it was buying 8,000 boe per day from EnCana for C$208 million (US$158 million), replacing output it has lost through an Alberta Energy and Utilities Board gas shut-in in northeastern Alberta.
For EnCana, this week’s transactions came on top of two earlier sales that saw Magnum Hunter pay US$243 million for 3,900 boe per day of New Mexico production and a US$37 million sale of Sauer Drilling to Unit Corp. Deals followed Tom Brown takeover All of the deals have occurred since EnCana’s US$2.35 billion takeover of Tom Brown in April. Prior to that EnCana had divested another US$500 million in conventional, non-core properties in the first quarter of 2004.
With up to 60 prospective buyers attracted to EnCana’s offerings, the Canadian independent hopes to unload another 15,000 to 35,000 boe per day in the next year, to both reduce its borrowings and tighten its focus on longer-life gas properties.
From its round of acquisitions and divestitures, EnCana hopes to achieve production this year of 725,000-765,000 boe per day. At the midpoint between those two numbers of 745,000 boe per day it would post a 15 percent gain over 2003.
Harvest has been reaping its own gains this year, buying all the shares of Strom Energy in June for C$189 million, raising output by 27 percent to 19,000 boe per day from reserves of 47 million boe. EnCana’s volumes should boost those volumes to about 38,000 boe per day.
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