Encana on selling spree

Encana has come close to US$2 billion in a flurry of pre-Christmas asset sales to strengthen its balance sheet and partly offset the collapse earlier this year of its US$5.4 billion joint venture with PetroChina.

In a final dash to the finish line, the big gas producer has wrapped up the major components of its 2011 divestiture program which Chief Executive Officer Randy Eresman estimated will result in proceeds for the year of US$3.5 billion.

Andrew Potter, an analyst with CIBC World Markets, said Encana has now “largely alleviated any liquidity concerns,” although Phil Skolnick with Canaccord Genuity, said Encana’s debt metrics still rank among the worst of the Calgary-based senior oil and gas producers.

Topping the deals, Encana sold dry gas producing North Texas shale properties which it held for seven years to EnerVest for US$975 million.

The properties currently produce 125 million cubic feet per day and include gathering pipelines on 50,000 acres of land in the Fort Worth basin.

Next, pipeline and gas systems operator Veresen agreed to pay C$920 million for a gas gathering and processing complex that serves the Cutbank Ridge region of Alberta and British Columbia.

The two plants have combined capacity of 516 million cubic feet per day and 230 miles of pipelines.

Calgary-based Veresen said it had struck a C$303 million bought-deal financing to help pay for the acquisition.

Finally, Direct Energy, a subsidiary of British energy giant Centrica, agreed to a C$58 million cash purchase of Encana’s Carrot Creek gas play in west-central Alberta, adding 6.2 million cubic feet per day of production to its current 163 million cubic feet per day, in return for a gas-producing property and related infrastructure in southeastern Alberta.

—Gary Park