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Encana sells Wyoming gas assets for $1.8-billion

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.

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"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.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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