Encana's balance sheet is not in bad shape, but it is not pristine either, and the FirstEnergy Capital analyst said the some investors had been concerned about the company outspending its cash flow over the next few years, too. The deal with PetroChina should allow Encana to accelerate development more than it could alone, while spending half of the capital.
Back of the envelope math suggests that PetroChina was paying roughly $8,000 per acre, FirstEnergy Capital's Dunn said.
Chesapeake Energy (CHK) was the most recent energy company to sign a shale deal with the Chinese, when it announced in January a joint venture with CNOOC (CEO). CNOOC already had a joint venture with Chesapeake before the January announcement.
The Encana assets are in what is referred to as the Montney Shale. Any deal in the North American shale plays will spark rumors of coming M&A action.The FirstEnergy Capital analyst said that among Canadian plays, names potentially to be linked to the Encana deal in speculative trading action would include Progress Energy Resources (PRQ), Painted Pony, Daylight Energy (DAY), Advantage Oil & Gas (AAV), Birchcliff Energy (BIR) and Celtic Exploration (CLT). The Encana-PetroChina JV represents current daily production of about 255 million cubic feet equivalent per day (MMcfe/d), proved reserves of about 1 trillion cubic feet of natural gas equivalent (Tcfe), as at the end of 2010, and about 635,000 net acres of land straddling the British Columbia and Alberta boundary, Encana said in a statement. The Encana assets also include about 700 million cubic feet (MMcf) per day of processing capacity, about 3,400 kilometres of pipelines and a natural gas storage facility. -- Written by Eric Rosenbaum from New York.
>To contact the writer of this article, click here: Eric Rosenbaum. >To follow the writer on Twitter, go to Eric Rosenbaum. >To submit a news tip, send an email to: email@example.com.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV