EnCana selling next round of N.A. properties to tighten focus

Canadian independent EnCana has announced the next round of its housecleaning as its turns to North American resource gas plays and Alberta’s oil sands as the core of its business.

It said Feb. 2 that Gulf of Mexico assets, 15 conventional properties concentrated in central and southern Alberta and its troublesome Ecuador holdings, which some have estimated are worth US$1.5 billion, are on the block.

Chief Executive Officer Gwyn Morgan said his company’s remaining conventional oil and gas have attracted “substantial interest from potential buyers.”

EnCana started unloading assets in a big way last year by divesting 76,000 barrels of oil equivalent per day of production for US$3.5 billion, including the sale of its United Kingdom North Sea assets to cross-town rival Nexen for US$2.1 billion.

The new round includes:

• An average 40 percent working interest in 1.4 million gross acres in the Gulf of Mexico, including a 25 percent working interest in the ChevronTexaco operated Tahiti discovery.

• A Feb. 8 deadline for bids on the 15 Alberta properties that produce a combined 17,700 bpd of oil and natural gas liquids and 27 million cubic feet per day of gas.

• Three natural gas gathering and processing plants with capacity of 210 million cubic feet per day in Colorado and Utah.

• Five blocks in Ecuador’s Oriente Basin that produce 78,000 bpd and close to a one-third stake in the 450,000 bpd, 300-mile OCP pipeline to Ecuador’s coast.

Ecuador has been a growing burr under EnCana’s saddle over the last year, with Morgan conceding last year that operating in the South American country was “constantly a roller-coaster.”

It has been embroiled in two fights with the government of Ecuador, taking one claim for US$120 million in a wrangle over value-added taxes on exported oil to an international tribunal in London.

Major attention has been focused on India’s Oil and Natural Gas Corp. and China National Petroleum Corp., both of them desperate to lock in long-term international oil supplies, as likely bidders for the Ecuador holdings.

—Gary Park