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In this March 29, 2013 file photo, workers tend to a well head during a hydraulic fracturing operation at an Encana gas well.

Brennan Linsley/THE ASSOCIATED PRESS

Encana Corp. sold a large swath of land in Western Canada for roughly $1.8-billion (U.S.) as the energy company continues to shift its attention to oil plays.

Encana on Friday announced a deal to sell its Bighorn asset, consisting of 360,000 acres of land – as well the company's stake in the related pipeline, facilities, and service arrangements – to Jupiter Resources Inc. The buyer is a private Alberta energy firm, founded by Apollo Global Management LLC, which dubs itself as an "alternative investment manager" with a focus on contrarian bets in private equity, credit and real estate.

While the sale means Encana's chief executive Doug Suttles continues his streak of streamlining the company's assets, the price left observers dissatisfied. But, at the same time, experts believe investors will still applaud the Bighorn sale as Mr. Suttles further puts his stamp on the company.

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"This transaction advances our strategy by unlocking value from our portfolio as we focus on developing our core growth plays and extracting additional value from our base assets," Mr. Suttles said in a statement. "Bighorn is a high quality asset that has not been receiving significant investment in 2014."

Phil Skolnick, an analyst covering energy for Canaccord Genuity, called $1.8-billion price "disappointing" in a research note. Randy Ollenberger, an analyst at Bank of Montreal, said the price was at the low end of his expectations, which were between $1.9-billion and $2.5-billion. However, Mr. Ollenberger believes the market will react "favourably." Encana shares dipped slightly Friday. The BMO analyst noted the deal and price was previously telegraphed in the press, which may have muted the response to the news.

The Bighorn asset is located in west central Alberta and hosts about 1,100 billion cubic feet of natural gas and oil equivalent, with natural gas representing about three-quarters of those reserves. The Bighorn deal is effective May 1, and expected to close by the end of the third quarter, Encana said.

Mr. Suttles is jettisoning assets outside the company's six pillars: the Montney in northeast British Columbia and northwest Alberta; the Duvernay in west central Alberta; the DJ Basin liquids play in Colorado; San Juan oil zone in northwest New Mexico; the Tuscaloosa marine shale in Mississippi and Louisiana; and the Eagle Ford zone in Texas, which was added to the mix after a $3.1-billion acquisition in May.

The CEO's most prominent – and profitable – move has been to spin off roughly 5.2 million acres on which it holds the mineral rights. The new company, PrairieSky Royalty Ltd., was a hit. Its initial public offering was the fourth-largest in Canadian history, putting about $1.67-billion into Encana's coffers, while still holding on to the majority of the shares. The IPO was priced at $28 per share at the end of May and the stock closed at $38.57 Friday.

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About the Author

Carrie Tait joined the Globe in January, 2011, mainly reporting on energy from the Calgary bureau. Previously, she spent six years working for the National Post in both Calgary and Toronto. She has a master’s degree in journalism from the University of Western Ontario and a bachelor’s degree in political studies from the University of Saskatchewan. More

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