File photo of Doug Suttles, Encana chief executive officer.Todd Korol/Reuters
Encana Corp. is selling its natural gas assets in Wyoming's Jonah field to an affiliate of U.S. private investment firm TPG Capital for about $1.8-billion (U.S.).
The sale of one of the largest natural gas fields in the United States is part of Calgary-based Encana's strategy to pare assets in order to focus on liquids-rich natural gas and oil, which have been selling at higher prices than those for dry gas.
A deal to sell the Jonah field had reportedly been in the works, but to private equity firms Carlyle Group and NGP Energy Capital Management LLC and not TPG.
"This transaction is consistent with our strategy," Encana president and chief executive officer Doug Suttles said on Monday.
"With this divestment of Jonah, we are unlocking value from a mature, high-quality asset and allowing our teams to focus on our five core growth areas and continue with execution of our new strategy."
The Jonah field has a total productive area of about 24,000 acres. Estimated year-end 2013 proved reserves stood at about 1.5 billion cubic feet, the company says.
The deal with TPG – formerly Texas Pacific Group – includes more than 100,000 undeveloped acres adjacent to Jonah known as the Normally Pressured Lance area.
"The Jonah field is a world-class, low-risk resource with long reserve life and future drilling opportunities that will be a strong platform to continue to grow a portfolio of cash flow-producing assets," said Tom Hart, CEO of the new oil and gas platform created by TPG to manage the investment.
Bertrand Marotte